ASSET PURCHASE AGREEMENT
THIS AGREEMENT made as of the 12th day of November, 0000
XXXXXXX:
XXXXXXXXX XXXXXX ULC, a corporation organized and
existing under the laws of Nova Scotia and
extraprovincially registered in British Columbia
(the "Vendor")OF THE FIRST PART
AND:
WESTBEACH SPORTS INC., a corporation organized and
existing under the laws of British Columbia
(the "Purchaser")
OF THE SECOND PART
WHEREAS:
A. The Vendor operates a wholesale ski and snowboard apparel
manufacturing and a retail ski and snowboard equipment apparel and accessories
business in the Province of British Columbia and in Austria;
B. The Vendor owns and desires to sell as a going concern the
undertaking and interest in all the property and assets used for such business
upon and subject to the terms and conditions hereinafter set forth;
C. The Purchaser wishes to purchase the undertaking and interest in
all the property and assets used for such business upon and subject to the terms
and conditions hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged by each of the
parties hereto) the parties make the agreements and acknowledgements hereinafter
set forth:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS - Whenever used in this Agreement, unless there is something
in the subject matter or context inconsistent therewith, the following words and
terms shall have the respective meanings ascribed to them as follows:
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(a) "ACCOUNTS RECEIVABLE" means all accounts receivable, trade
accounts, book debts, bills of exchange, promissory notes and
notes receivable owned by or due or accruing due to the Vendor in
respect of the Purchased Business and the full benefit of all
securities, if any, for such accounts, notes or debts;
(b) "AGREEMENT" means this Asset Purchase Agreement and all
instruments supplemental hereto or in amendment or confirmation;
hereof, "hereof", "hereto", and "hereunder" and similar
expressions mean and refer to this Agreement and not to any
particular Article or Section; "Article", "Section", "paragraph"
or "clause" means and refers to the specified article, section,
paragraph or clause of this Agreement;
(c) "CLOSING" means the completion of all of the transactions
contemplated by this Agreement;
(d) "CLOSING DATE" means November 12, 1999 or such other date as the
parties hereto may agree as the date upon which the Closing shall
take place;
(e) "CLOSING TIME" means 9:00 p.m. (Vancouver time) on the Closing
Date or such other time on the Closing Date as the parties hereto
may agree as the time on the Closing Date which the Closing shall
take place;
(f) "CONFIDENTIAL INFORMATION" means all:
(i) financial, business and personal data relating to
customers and employees of the Purchased Business;
(ii) business and marketing plans, strategies and methods
which are not standard industry practice, or which
are not generally known in the industry and are used
in connection with the Purchased Business; and
(iii) studies, customer lists, charts, plans and tables
acquired or prepared by and used solely in
connection with the Purchased Business;
(g) "CONTRACTS" includes all contracts, agreements, indentures,
commitments, or other instruments whether written or oral and of
any nature and kind whatsoever, as more fully described in
paragraph 2.1(f);
(h) "FINANCIAL STATEMENTS" means the unaudited financial statements
for the Purchased Business as at and for the financial years ended
December 26, 1998 and December 27, 1997, and the interim unaudited
financial statements for the Purchased Business for the nine
months ended September 25, 1999;
(i) "HOLDBACK AMOUNT" has the meaning set forth in paragraph 2.6(b);
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(j) "HOLDBACK PERIOD" has the meaning set forth in Section 2.8;
(k) "INVENTORIES" means all inventories of every kind and nature and
wheresoever situate owned by the Vendor and used in connection
with the Retail Business including, without limiting the
generality of the foregoing, all inventory listed on Schedule
1.1(k) hereto and related accessories and all other materials and
supplies on hand for the Vancouver Store and the Whistler Store;
(l) "LEASES" means all leases or agreements in the nature of a lease
and any interest therein, whether of real or personal property, to
which the Vendor is a party, whether as lessors or lessees,
relating to the Purchased Business;
(m) "LICENCES" shall mean all licenses in the possession, control, or
name of the Vendor with respect to the Purchased Assets;
(n) "PERMITS" shall mean all of the necessary licences and permits
required for the conduct and operation of the present and intended
use of the Purchased Assets issued by any government, statutory,
or other authority having jurisdiction over the Purchased Assets;
(o) "PREMISES" means the premises occupied by the Vendor at each of
the the Vancouver Store, the Whistler Store and the Vancouver
Wholesale Location;
(p) "PREPAIDS" includes all prepaid expenses, deposits and lease
payments;
(q) "PURCHASE PRICE" has the meaning set forth in Section 2.2;
(r) "PURCHASED ASSETS" means the undertaking, property and assets
referred to in Section 2.1;
(s) "RETAIL BUSINESS" means the retail ski and snowboard equipment,
apparel and accessories business now being carried on by the
Vendor;
(t) "PURCHASED BUSINESS" means the Retail Business and the Wholesale
Business;
(u) "RECORDS" means all personnel records of employees being offered
employment by the Purchaser, all inspection records and all other
records and books, documents and data relating to the Purchased
Assets;
(v) "SURCHARGE" means the surcharge in the amount of $46,102.41 owing
to the landlord by the Vendor under the Lease for the Whistler
Store;
(w) "TRADEMARKS" means the registrations ("Registrations") and
applications for registration ("Applications") referred to in
Schedule 1.1(w), on an "as is, where is"
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basis;
(x) "VANCOUVER STORE" means the retail store located at 0000 Xxxx
0xx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx;
(y) "VANCOUVER WHOLESALE LOCATION" means the premises located at
0000 XX Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx;
(z) "WARRANTIES" shall mean all outstanding guarantees, warranties,
and indemnities obtained for the benefit of the Vendor relative to
the Purchased Assets;
(aa) "WHISTLER STORE" means the retail store located at 117 & 119 -
0000 Xxxxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx;
(ab) "WHOLESALE BUSINESS" means the wholesale ski and snowboard apparel
manufacturing business;
(ac) "WORKING CAPITAL ADJUSTMENT" means the adjustment to the Purchase
Price calculated by:
(i) adding to Purchase Price the amount by which the
book value of the Inventories on the Closing Date
exceeds the amount of CDN$1,393,064, or subtracting
from the Purchase Price the amount by which the
amount of CDN$1,393,064 exceeds the book value of
the Inventories on the Closing Date, as the case may
be; and
(ii) adding to Purchase Price the amount by which the sum
of CDN$1,177,629 plus US$9,861 exceeds the accounts
payable on the Closing Date, or subtracting from the
Purchase Price the amount by which the accounts
payable on the Closing Date exceeds the sum of
CDN$1,177,629 plus US$9,861, as the case may be.
1.2 HEADINGS - The division of this Agreement into Articles and Sections and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement.
1.3 NUMBER - In this Agreement and unless the context otherwise requires,
words importing the singular number only shall include the plural and vice
versa, words importing the neuter gender shall include the masculine and
feminine genders and vice versa and words importing persons shall include
individuals, partnerships, associations, trusts, unincorporated organizations
and corporations and vice versa.
1.4 CURRENCY - All references herein to currency are to United States dollars
unless otherwise expressly stipulated herein.
1.5 SCHEDULES - The following are the Schedules annexed hereto and
incorporated by reference and deemed to be part thereof:
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Schedule 1.1(k) - List of Inventory
Schedule 1.1(w) - Trademarks
Schedule 2.3 - Allocation of Purchase Price
Schedule 3.1(f) - Financial Statements
Schedule 3.1(g) - Other Liabilities
Schedule 3.1(i) - Encumbrances
Schedule 3.1(j) - Equipment
Schedule 3.1(k) - Conditional Sales Contracts, Title
Retention Documents and Licences
Schedule 3.1(l) - Leases
Schedule 3.1(n) - Employees
Schedule 3.1(r) - Litigation
Schedule 3.1(x) - Other Contracts, Agreements and
Documents
ARTICLE 2
PURCHASE AND SALE AND PURCHASE PRICE
2.1 ASSETS TO BE PURCHASED AND SOLD - Subject to the terms and conditions
hereof, the Vendor hereby absolutely sells, assigns, transfers and sets over to
the Purchaser and the Purchaser hereby accepts such sale, assignment and
transfer from the Vendor as, at and from the Closing Time, as a going concern,
the undertaking and all of the right, title and interest of the Vendor in and to
the property and assets owned by the Vendor or to which the Vendor is entitled
and belonging to and used in the Purchased Business of every kind and
description, including, without limiting the generality of the foregoing:
(a) all equipment, computer equipment, computer software, furniture,
furnishings, kiosks, accessories and supplies of all kinds owned
by the Vendor and used in connection with the Purchased Business,
including, without limiting the generality of the foregoing, the
equipment and software described in Schedule 3.1(l);
(b) all Inventories;
(c) all Leases;
(d) all leasehold improvements, fixtures, counters, racks and displays
in the Premises;
(e) all Trademarks;
(f) the full benefit of all contracts, agreements, indentures,
commitments or other instruments to which the Vendor is entitled
in connection with the Purchased Business, whether written or oral
and of any nature or kind whatsoever, including but not limited to
all the right, title and interest of the Vendor in, to and under
the
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further agreements and contracts described in Schedule 3.1(x);
(g) all licences, sublicences, customer lists and business know-how
pertaining to the Purchased Business and owned by the Vendor and
used in connection with the Purchased Business;
(h) the goodwill of the Purchased Business including, without limiting
the generality of the foregoing, the exclusive right to the
Purchaser to represent itself as carrying on business in
continuation of and in succession to the Vendor and the right to
use any words indicating that the Purchased Business is so carried
on, except as otherwise expressly set out herein;
(i) all refundable sales taxes, excise taxes, municipal taxes and
other like taxes and interest thereon refundable to the Vendor in
respect of the period commencing at the Closing Time;
(j) all other property and assets of the Purchased Business, moveable
and immoveable, real and personal, tangible or intangible, of
every kind and description and wheresoever situate including,
without limitation, the full benefit of all representations,
warranties, guarantees, indemnities, undertakings, certificates,
covenants, agreements and all security therefor received by the
Vendor on the purchase or other acquisition of any part of the
Purchased Assets; and
(k) the telephone numbers for the Vancouver Store, the Whistler Store
and the Vancouver Wholesale Location and the Vendor's e-mail
address and website;
but specifically excluding Accounts Receivable for the Purchased Business and
cash on hand as of the Closing Date.
2.2 PURCHASE PRICE - Subject to adjustment pursuant to Sections 2.7 and 2.8,
the purchase price payable to the Vendor for the Purchased Assets (the "Purchase
Price") shall be the sum of $2,450,000, to be paid according to the provisions
of Section 2.6.
2.3 ALLOCATION OF PURCHASE PRICE - The Vendor and the Purchaser agree that
the adjusted Purchase Price shall be allocated, for all purposes, among the
Purchased Assets in accordance with the provisions of Schedule 2.3.
2.4 TRANSFER TAXES - The Purchaser shall be liable for and shall pay all
sales and transfer taxes, federal taxes and all other taxes, duties or other
like charges payable upon and in connection with the conveyance and transfer of
the Purchased Assets by the Vendor to the Purchaser save and except any income,
capital or corporation taxes payable by the Vendor.
2.5 ASSUMPTION OF LIABILITIES AND EMPLOYEES
(a) The Purchaser agrees to discharge, assume, fulfil and perform (and
indemnify
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the Vendor in respect thereof) only the obligations accruing after
the Closing Time in respect of:
(i) customer deposits;
(ii) those Purchased Assets referred to in Subsections
2.1(c), 2.1(f) and 2.1(g); and
(iii) all accounts payable for the Retail Business.
(b) For greater certainty and without limiting the Vendor's
obligations, the following debts and liabilities incurred prior to
the Closing Date shall remain the responsibility of the Vendor:
(i) liabilities for sales, income, corporation, excise
or other taxes;
(ii) liabilities to shareholders of the Vendor or to any
person, firm or corporation not dealing at arm's
length (as defined in the Income Tax Act (Canada))
with any of the foregoing;
(iii) accrued wages, vacation pay and sick pay;
(iv) liabilities to any employees who are not hired by
the Purchaser;
(v) liabilities in respect of any obligations not
expressly assumed by the Purchaser hereunder;
(vi) any liabilities of the Vendor incurred in connection
with the conduct of any business of the Vendor other
than the Purchased Business; and
(vii) liabilities to any bank or other lender.
(c) The Purchaser agrees to offer to employ the employees of the
Vendor employed in the Purchased Business listed in
Schedule 3.1(n), including employees on maternity leave (excluding
permanently disabled employees and those employees who are on
short term disability as of the Closing Date), on terms and
conditions not less favourable than as are presently enjoyed by
such employees including, without limiting the generality of the
foregoing, rates of pay and benefits and recognition of years of
service.
2.6 PAYMENT OF PURCHASE PRICE - The Purchase Price shall be payable on the
Closing Date as follows:
(a) by delivery to the Vendor of a certified cheque, a solicitor's
trust cheque or a wire transfer of immediately available funds in
the amount of $2,100,000; and
(b) by delivery to Wyndcrest Partners, Ltd. of a certified cheque, a
solicitor's trust
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cheque or a wire transfer of immediately available funds in the
amount of $250,000; and
(c) by the delivery to the Vendor's counsel of a certified cheque, a
solicitor's trust cheque or a wire transfer of immediately
available funds in the amount of $100,000 (the "Holdback Amount"),
which Holdback Amount shall bear interest for the account of the
Vendor from and after the Closing Date and which the Vendor's
counsel shall hold and disburse in accordance with Section 2.8.
2.7 WORKING CAPITAL ADJUSTMENT - Within five (5) business days of the Closing
Date, the Purchaser and Vendor shall cooperate to carry out the Working Capital
Adjustment, and any amount payable by one party hereto to the other pursuant to
the Working Capital Adjustment shall be paid forthwith upon the determination of
such amount.
2.8 HOLDBACK/FINAL ADJUSTMENT - The Vendor's legal counsel shall hold the
Holdback Amount in trust for a period of ninety (90) days from the Closing Date
(the "Holdback Period"). Upon the expiry of the Holdback Period, the Purchaser
and the Vendor shall agree on a final settlement of amounts owing by one party
to the other in respect of amounts payable under this Agreement, including (i)
adjustment of Prepaids; and (ii) outstanding claims for sales tax, capital tax,
property tax, workers' compensation premiums or assessments, and any other taxes
or assessments of a like nature.
2.9 ARBITRATION - If under the provisions of Sections 2.7 or 2.8 the
Purchaser and the Vendor have failed to agree as to a final settlement of
amounts owing, such determination shall be referred to arbitration in
accordance with the provisions of the COMMERCIAL ARBITRATION ACT of British
Columbia. The arbitration shall be conducted according to the rules specified
in such legislation, failing which it shall be conducted according to such rules
as the parties shall mutually and reasonably agree upon, failing which it shall
be conducted according to such rules as the arbitrator or arbitrators shall
specify or mutually and reasonably agree upon. Arbitration shall be before a
single independent arbitrator or, if the parties cannot reasonably agree upon a
single arbitrator, then before a board of three (3) independent arbitrators, one
appointed by each party and the third appointed by the other two arbitrators so
appointed, and the decision of the arbitrator or the majority of the board of
arbitrators, as the case may be, shall be final and binding upon the parties,
and judgment upon the award may be entered and enforced in the same manner as a
judgment or order of the Court to the same effect. Arbitration proceedings
shall be held in the City of Vancouver, unless mutually and reasonably agreed
upon by the parties, and the arbitrator or arbitrators, as the case may be,
shall have jurisdiction to award costs, including costs as between a solicitor
and its own client.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
3.1 The Vendor hereby covenants, represents and warrants to the Purchaser
that:
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(a) ORGANIZATION AND GOOD STANDING OF THE VENDOR - The Vendor is a
corporation duly incorporated, duly organized, validly existing,
in good standing and is up to date in all material filings and
registrations required under the laws of Nova Scotia and has all
necessary corporate power, authority and capacity to own or lease
its property and assets and to carry on the Purchased Business as
presently conducted by it.
(b) NO OPTIONS - No person, firm or corporation now has or at the
Closing Time will have any right, option, agreement or arrangement
capable of becoming an agreement for the acquisition, mortgage,
pledge, charge, assignment or encumbrance of any of the Purchased
Assets or any interest therein from the Vendor, other than
pursuant to customer orders accepted by the Vendor in the ordinary
and usual course of business.
(c) DUE AUTHORIZATION, ETC. - The Vendor has all necessary corporate
power, authority and capacity to enter into this Agreement and the
other instruments contemplated herein and to perform its
obligations hereunder and thereunder. The execution and delivery
of this Agreement and the other instruments contemplated herein
and the consummation of the transactions contemplated hereunder
have been duly authorized by all necessary corporate or other
action on the part of the Vendor.
(d) VALID AND BINDING OBLIGATION - This Agreement constitutes and the
other instruments contemplated herein when executed will
constitute valid and binding obligations of the Vendor,
enforceable against the Vendor in accordance with the terms hereof
and thereof subject, however, to limitations with respect to
enforcement imposed by law in connection with bankruptcy or
similar proceedings affecting the rights of creditors generally
and to the extent that equitable remedies such as specific
performance and injunction are in the discretion of the court from
which they are sought.
(e) NO VIOLATION - The disposition of the Purchased Assets and the
entering into and performance of this Agreement and the agreements
and other instruments contemplated herein will not violate,
contravene, breach or offend against or result in any default
under any security agreement, indenture, mortgage, lease, order,
undertaking, licence, permit, agreement, instrument, charter or
by-law provision, resolution of shareholders or directors,
statute, regulation, judgment, decree or law to which the Vendor
is a party or by which it may be bound or affected.
(f) FINANCIAL STATEMENTS - The Financial Statements, copies of which
are attached as Schedule 3.1(f), have been prepared in accordance
with Canadian generally accepted accounting principles
consistently applied.
(g) ABSENCE OF UNDISCLOSED LIABILITIES - Except as disclosed in
Schedule 3.1(g) or elsewhere in this Agreement (including the
Schedules hereto) and except for
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unsecured current obligations and liabilities incurred in the
ordinary and usual course of the Purchased Business and which
are not materially adverse to the nature and manner of
conducting the Purchased Business, or the operations, assets,
properties, future and prospects or financial condition of the
Purchased Business, the Vendor does not have any outstanding
indebtedness or any liabilities or obligations (whether
accrued, determinable, absolute, contingent or otherwise) in
respect of which the Purchaser may be liable on or after the
completion of the transactions contemplated by this Agreement.
(h) BUSINESS CARRIED ON IN ORDINARY COURSE - The Purchased Business
has been carried on in the ordinary and usual course since the
date of the Financial Statements and there has been no material
change in the affairs, business, prospects, operations or
condition of the Purchased Business, financial or otherwise, or
arising as a result of any legislative or regulatory change,
revocation of any licence or right to do business, fire,
explosion, accident, labour problem or otherwise, except changes
occurring in the ordinary and usual course of business and which,
in the aggregate, have not materially adversely affected and will
not materially adversely affect the nature and manner of
conducting the Purchased Business, or the operations, assets,
properties, future prospects or financial condition of the
Purchased Business.
(i) TITLE TO AND USE OF PROPERTIES - The Vendor is the owner of the
Purchased Assets with good and marketable title thereto free and
clear of all mortgages, security interests, charges, adverse
claims, rights of others, pledges, demands, liens, title retention
agreements, or other encumbrances of any nature or kind except as
shown in Schedule 3.1(i) hereto. The uses to which the Premises
have been put are not in breach or violation in any respect of any
statute, by-law, ordinance, regulation, covenant, governmental
restriction or official plan, municipal or otherwise. No notice
of a public taking has been given regarding the Premises. During
the period of occupation of the Premises used in connection with
the Purchased Business (including leasehold properties) there has
been no handling or discharge of any hazardous substance, waste or
pollutant not in compliance with applicable laws or regulations.
There are no applicable laws or regulations (whether of an
environmental nature or otherwise) which would require that any
condition regarding the Premises to be remedied or cleaned up.
(j) CONDITION AND DESCRIPTION OF THE VENDOR'S ASSETS - All facilities
and equipment owned and used by the Vendor in connection with the
Purchased Business are and will be on the Closing Date properly
maintained, in working condition, reasonable wear and tear
excepted, and are in compliance with all applicable laws,
regulations, by-laws, ordinances and orders. A Schedule of Fixed
Asset Rollforward for the month ended October 30, 1999 in respect
of all equipment used in connection with the Purchased Business is
attached as Schedule 3.1(j).
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(k) TANGIBLE AND INTANGIBLE PROPERTIES - The Vendor is entitled to use
in connection with the Purchased Business all equipment, other
personal property and fixtures in the possession or custody of the
Vendor which, as of the date hereof, are acquired under a
conditional sales contract or other title retention document, or
are held under licence or similar arrangement, a list of which and
of the conditional sales contracts, title retention documents,
licences, agreements or other document relating thereto is set
forth in Schedule 3.1(k) and are used solely in the Purchased
Business.
(l) LEASES OF REAL AND PERSONAL PROPERTY - The Vendor is a party to
the Leases referred to in Schedule 3.1(l) (in which is specified
the parties, the date of execution and expiry date, any option to
renew, the location of the leased lands, chattels or premises and
the rental payments thereunder) and all interests held by the
Vendor as lessee under such Leases are free and clear of any and
all mortgages, security interests, charges, adverse claims,
rights, pledges, demands, liens, title retention agreements and
other encumbrances of any nature or kind whatsoever. Except for
the Surcharge, all rental and other payments required to be paid
by the Vendor pursuant to such Leases have been duly paid and the
Vendor is not otherwise in default in meeting its obligations
under any such Leases. There does not exist under any such Leases
any right of offset or any adverse claim and the completion of the
transactions contemplated by this Agreement will not afford any of
the parties thereto (other than the Vendor) the right to terminate
such Leases. There are no events or circumstances which could
give rise to such parties claiming default by the Vendor under
such Leases except as specified in Schedule 3.1(l). No consent of
any parties to such Leases (other than the Vendor) is required by
reason of the transactions contemplated hereby except as specified
in Schedule 3.1(l) nor will such transactions impose any more
onerous obligations on the Purchaser under such Leases.
(m) COMPLIANCE WITH CONTRACTS - Except as otherwise specified herein,
the Vendor is not in default under any contract, lease, licence,
agreement, indenture, commitment or other instrument, whether
written or oral, (including, without limitation, those referred to
in the Schedules hereto) to which it is a party or by which it is
bound, and there exists no state of facts which after notice or
lapse of time or both would constitute such a default and all such
contracts, leases, agreements, indentures, commitments or other
instruments are now in good standing and in full force and effect
and the Vendor is entitled to all rights and benefits thereunder.
(n) EMPLOYEES - There are set forth in Schedule 3.1(n) hereto the
names and titles of all personnel employed or engaged in the
Purchased Business to whom the Purchaser has agreed to offer
employment, together with particulars of the material terms and
conditions of employment or engagement of such persons, including
rates of remuneration, benefits and positions held.
(o) EMPLOYMENT CONTRACTS - The Vendor does not have any written
contracts of employment entered into with any employees employed
by the Vendor, any oral
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contracts of employment which are not terminable on the giving
of reasonable notice in accordance with applicable law, any
management or service agreement (other than service agreements
which can be cancelled on not more than thirty (30) days'
notice) or any union or collective bargaining agreement.
(p) UNION RIGHTS AND EMPLOYEE TERMINATION - No trade union, council of
trade unions, employee bargaining agency or affiliated bargaining
agent:
(i) holds bargaining rights with respect to any of the
Vendor's employees, whether employed in connection
with the Purchased Business or otherwise, by way of
certification, interim certification, voluntary
recognition, designation or successor rights;
(ii) to the best knowledge, information and belief of the
Vendor have applied to be certified as the
bargaining agent of any of the Vendor's employees,
whether employed in connection with the Purchased
Business or otherwise; or
(iii) to the best knowledge, information and belief of the
Vendor have applied to have the Vendor declared a
related employer pursuant to applicable labour
legislation.
The Vendor has no knowledge of any current union organizing
activity among the employees of the Purchased Business or any
other business owned or operated by the Vendor.
(q) ACCURACY OF BOOKS AND RECORDS - The books and records of the
Vendor, financial and otherwise, fairly and correctly set out and
disclose in all material respects the financial position of the
Vendor in respect of the Purchased Business and all material
financial and other transactions of the Vendor relating to the
Purchased Business have been accurately recorded in such books and
records.
(r) LITIGATION AND CLAIMS - Except as disclosed in Schedule 3.1(r):
(i) there is no suit, action, litigation, labour
grievance or complaint, investigation (including,
without limitation, investigations under human
rights or health and safety legislation) or
administrative, governmental, arbitration or other
proceeding (whether or not purportedly on behalf of
the Vendor), including without limitation appeals
and applications for review, in progress, pending
or, to the best of the knowledge, information and
belief of the Vendor (after due enquiry) threatened
against or relating to the Purchased Business, or
affecting the right of the Vendor to enter into this
Agreement or perform the Vendor's obligations
hereunder;
(ii) The Vendor is not aware (after due enquiry) of any
existing grounds upon which any suit, action,
litigation, labour grievance or complaint,
investigation or proceeding referred to in
clause (i) above might be
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commenced with any reasonable likelihood of success;
(iii) there is not presently outstanding against the
Vendor any judgment, decree, injunction, rule, order
or award of any court, governmental department,
commission, board, bureau, agency, instrumentality
or arbitrator or any settlement agreement binding
upon it affecting the Purchased Business; and
(iv) there are no open files, notices of violation or
outstanding work orders relating to the equipment,
building or realty owned or used by the Vendor in
relation to the Purchased Business from or required
by any police, fire department, sanitation, health,
worker safety or factory authorities or any federal,
provincial or municipal authority, or any matters
under discussion with any such authority or
department relating to open files, notice of
violation or work orders. No order affecting the
Purchased Business has been issued or is expected to
be issued by any government ministry, agency or
authority.
(s) COMPLIANCE WITH APPLICABLE LAWS, ETC. - The Vendor is conducting
the Purchased Business in compliance in all material respects with
all applicable laws, rules, regulations, by-laws and ordinances of
the jurisdictions in which the Purchased Business is carried on
and is not in breach of any such laws, rules, regulations, by-laws
and ordinances. Without limiting the foregoing, the Vendor has
obtained all licences, permits or other governmental
authorizations necessary to the ownership of its assets and
properties or the conduct of the Purchased Business where a
failure to obtain same might adversely affect the Purchased
Business, operations, assets or condition (financial or otherwise)
of the Vendor.
(t) RESIDENCE OF THE VENDOR - The Vendor is not a non-resident of
Canada for the purposes of Section 116 of the INCOME TAX ACT
(Canada).
(u) INVENTORIES - The Vendor has Inventories substantially all of
which:
(i) consist solely of items of tangible personal
property of the kind and quality regularly used or
produced in the Purchased Business by the Vendor and
which are of marketable quality; and
(ii) are saleable in the ordinary and usual course of the
Purchased Business for the purpose for which they
were intended.
(v) COPIES OF AGREEMENTS, ETC. - True, correct and complete copies of
all leases, agreements, instruments and other documents listed in
the Schedules hereto have been delivered to the Purchaser.
- 16 -
(w) ABSENCE OF UNUSUAL TRANSACTIONS - Since the date of the Financial
Statements and without limiting anything elsewhere contained in
this Agreement, the Vendor has not:
(i) transferred, assigned, sold or otherwise disposed of
any of the assets related to the Purchased Business
or cancelled any debts or claims except in each case
in the ordinary and usual course of the Purchased
Business;
(ii) incurred or assumed any indebtedness, obligation or
liability (whether accrued, determinable, absolute,
contingent or otherwise), except those listed in
Schedule 3.1(g) and except those which are not
materially adverse to the nature and manner of
conducting the Purchased Business, or the
operations, assets, properties, future prospects or
financial condition of the Purchased Business;
(iii) suffered an operating loss or any extraordinary
loss, or waived any rights of substantial value, or
entered into any commitment or transaction not in
the ordinary and usual course of the Purchased
Business where such loss, rights, commitment or
transaction materially adversely affects or which
will materially adversely affect the nature and
manner of conducting the Purchased Business, or the
operations, assets, properties, future prospects or
financial condition of the Vendor;
(iv) made or made a commitment to make any general wage
or salary increases in respect of personnel of the
Purchased Business; or
(v) except as disclosed in Schedule 3.1(i), mortgaged,
pledged, charged, subjected to an adverse claim,
granted to others rights in, subjected to a demand,
subjected to a title retention agreement, subjected
to lien, granted a security interest in or otherwise
encumbered any of the Purchased Assets, whether
tangible or intangible.
(x) OTHER MATERIAL CONTRACTS - The Vendor has no outstanding material
contract, lease, licence, agreement, indenture, engagement,
commitment or other instrument, whether written or oral, of any
nature or kind whatsoever (including, without limitation, all
tenders, quotations and orders open for acceptance) in connection
with the Purchased Business except as otherwise disclosed in this
Agreement or in Schedule 3.1(x).
(y) TRADEMARKS - The Vendor is the legal and beneficial owner of the
Trademarks and except as disclosed in Schedule 1.1(w):
(i) the Vendor has not granted any rights or licences to
use any of the Trademarks to any persons;
(ii) the Vendor has not granted to any Person any
security interest in any of
- 17 -
the Trademarks, except Permitted Encumbrances and
Encumbrances that will be discharged upon Closing
and no such Permitted Encumbrances or Encumbrances
have been recorded or registered against any of the
Registrations or Applications;
(iii) to the best of the Vendor's knowledge, no Person has
commenced or threatened to commence litigation
proceedings which call into question the validity of
or the Vendor's title and right to use any of the
Trademarks or which allege any infringement by the
Vendor of any trademark or trade name rights of any
other Person;
(iv) the Vendor is not aware of any activity or conduct
by any other Person which infringes any rights of
the Vendor in and to the Trademarks;
(v) the Vendor has used the trademarks referred to in
the Applications and Registrations which are
material to the Business in the form in which such
trademarks are registered;
(vi) to the best of the Vendor's knowledge, all of the
Registrations and Applications disclosed in
Schedule 1.1(w) are subsisting, were validly
obtained and are in good standing;
(vii) to the best of the Vendor's knowledge, no
proceedings are pending or have been threatened,
under section 45 of the TRADEMARKS ACT (Canada) with
respect to any of the Canadian Registrations under
any similar provision of any comparable legislation
of any other jurisdiction with respect to any of the
Registrations made in such other jurisdictions; and
(viii) the Trademarks include all trademark applications
filed and pending and registrations obtained
worldwide to the Closing Date.
To the best of the Vendor's knowledge, no Person has made a claim
of any infringement or breach of any industrial or intellectual
property rights by the Vendor, nor has the Vendor received any
notice that the conduct of the Business infringes upon or breaches
any trademarks, patents, copyrights (including software protected
by copyright), service marks, trade names, industrial designs,
trade secrets or other industrial or intellectual property rights,
domestic or foreign, of any other Person and the conduct of the
Business does not infringe upon any trademarks, patents,
copyrights, service marks, trade names, industrial designs, trade
secrets or other industrial or intellectual property rights,
domestic or foreign, of any other Person. The Purchased Assets
include all trademarks, patents, copyrights (including software
protected by copyright), service marks, trade names, industrial
designs, trade secrets or other industrial or intellectual
property rights, domestic or foreign, owned by the Vendor and used
in connection with the
- 18 -
Business.
(z) NO JOINT ASSETS - All of the property and assets of the Purchased
Business are used solely for the Purchased Business and for no
other purpose.
(aa) YEAR 2000 - The Vendor makes no warranty as to the suitability of
the Purchased Assets for use prior to, during and after the
calendar year 2000 A.D. or as to operation during each such time
period without error relating to date data, specifically including
any error relating to, or the product of date data, which
represents or references different centuries or any leap year.
(ab) FULL DISCLOSURE - None of the foregoing representations and
statements of fact contains any untrue statement of material fact
or omits to state any material fact necessary to make any such
statements or representation not misleading to a prospective
purchaser of the Purchased Business seeking full information as to
the Vendor and the Purchased Business. Subject to the
qualification as to the information, knowledge or belief of the
Vendor, where stated, the Vendor has no information or knowledge
of any facts relating to the Purchased Business which the Vendor
has not disclosed to the Purchaser and which are not within the
public domain and which in the aggregate would have a material
adverse effect on the financial condition or prospects of the
Purchased Business.
3.2 RELIANCE - The Vendor hereby expressly acknowledges that the Purchaser is
relying upon the covenants, representations and warranties of the Vendor
contained in this Agreement or in any agreement, certificate or other document
delivered pursuant hereto in connection with the purchase of the Purchased
Business hereunder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 The Purchaser hereby covenants, represents and warrants to the Vendor
that:
(a) ORGANIZATION AND GOOD STANDING - The Purchaser is a corporation
duly incorporated and organized, validly existing, in good
standing, and is up to date in all of the filings and
registrations required under the laws of British Columbia.
(b) DUE AUTHORIZATION, ETC. - The Purchaser has all necessary
corporate power, authority and capacity to enter into this
Agreement and the other instruments contemplated herein and to
perform its obligations hereunder and thereunder. The execution
and delivery of this Agreement and the other instruments
contemplated herein and the performance of the transactions
contemplated hereunder and thereunder have been duly authorized by
all necessary corporate action on the part of the Purchaser.
(c) VALID AND BINDING OBLIGATION - This Agreement constitutes and the
other instruments contemplated herein when executed will
constitute valid and binding
- 19 -
obligations of the Purchaser enforceable against the Purchaser
in accordance with the terms hereof and thereof subject to
limitation with respect to enforcement imposed by law in
connection with bankruptcy or similar proceedings affecting the
rights of creditors generally and to the extent that equitable
remedies such as specific performance and injunction are in the
discretion of the court from which they are sought.
(d) NO VIOLATION - The Purchaser is not a party to, bound by or
subject to any indenture, mortgage, lease, agreement, instrument,
charter or by-law provision, statute, regulation, order, judgment,
decree or law which would be violated, contravened or breached by,
or under which any default would occur as a result of the
execution and delivery by the Purchaser of this Agreement or the
performance by the Purchaser of any of the terms hereof.
4.2 RELIANCE - The Purchaser hereby expressly acknowledges that the Vendor is
relying upon the covenants, representations and warranties of the
Purchaser contained in this Agreement or in any agreement, certificate or
other document delivered pursuant hereto in connection with the sale of
the Purchased Business hereunder.
ARTICLE 5
NO BROKER
5.1 NO BROKER - Each of the parties hereto represents and warrants to the
others that all negotiations relating to this Agreement and the transactions
contemplated hereby have been carried on between them directly and without the
intervention of any other party in such manner as to give rise to any valid
claim against any of the parties hereto for a brokerage commission, finder's fee
or other like payment.
ARTICLE 6
CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE PURCHASER
AND THE VENDOR OF THEIR OBLIGATIONS UNDER THIS AGREEMENT
6.1 PURCHASER'S CLOSING CONDITIONS - The obligation of the Purchaser to
complete the purchase of the Purchased Business hereunder shall be subject to
the satisfaction of, or compliance with, at or before the Closing Time, each of
the following conditions precedent, each of which is hereby acknowledged to be
inserted for the exclusive benefit of the Purchaser and may be waived by the
Purchaser in whole or in part:
(a) TRUTH AND ACCURACY OF REPRESENTATIONS OF THE VENDOR AT CLOSING
TIME - All of the representations and warranties of the Vendor
made in or pursuant to this Agreement (including the Schedules
hereto) or in agreements, certificates or other documents
delivered or given pursuant to this Agreement, including, without
limitation, the representations and warranties set forth in
Article 3, shall be true and correct in all material respects as
at the Closing Time.
- 20 -
(b) PERFORMANCE OF OBLIGATIONS - The Vendor shall have complied with
and performed in all respects its obligations, covenants and
agreements herein.
(c) CONSENTS, AUTHORIZATIONS AND REGISTRATIONS - All consents,
approvals, orders and authorizations of any persons or
governmental or administrative authorities (or registrations,
declarations, filings or recordings with any such authorities), in
form and on terms satisfactory to the Purchaser, acting
reasonably, and compliance with any conditions thereof required in
connection with the completion of any of the transactions
contemplated by this Agreement, the execution of this Agreement,
the Closing or the performance of any of the terms and conditions
hereof shall have been obtained on or before the Closing Time.
(d) NO ACTIONS TAKEN RESTRICTING SALE - No action or proceeding by law
or in equity shall be pending or threatened by any person, firm,
corporation, government, governmental authority, regulatory body
or agency to enjoin, restrict or prohibit:
(i) the purchase and sale of the Purchased Assets
contemplated hereby; or
(ii) the right of the Purchaser to conduct the Purchased
Business.
(e) NO DAMAGE - No substantial damage by fire or other hazard to the
Purchased Assets shall have occurred from the date hereof to the
Closing Time.
(f) NO MATERIAL ADVERSE CLAIMS - From the date hereof to the Closing
Time, no action, suit, proceeding or investigation shall have been
commenced or threatened against the Vendor, which, if successful,
would have a materially adverse effect on the Purchased Business
or the Purchased Assets.
(g) SOFTWARE - The licences of all software for the Purchased Business
shall have been transferred to the Purchaser on terms satisfactory
to the Purchaser, acting reasonably.
(h) EMPLOYEES - The Vendor shall have terminated the employment of all
employees employed by the Vendor in the Purchased Business, and
shall have provided evidence of termination satisfactory to the
Purchaser, acting reasonably.
6.2 VENDOR'S CONDITIONS - The obligation of the Vendor to complete the sale
of the Purchased Business hereunder shall be subject to the satisfaction of or
compliance with, at or before the Closing Time, each of the following conditions
precedent (each of which is hereby acknowledged to be inserted for the exclusive
benefit of the Vendor and may be waived by the Vendor, or either of them, in
whole or in part):
(a) TRUTH AND ACCURACY OF REPRESENTATIONS OF THE PURCHASER AT CLOSING
TIME - All of the representations and warranties of the Purchaser
made in or pursuant to this
- 21 -
Agreement (including the Schedule hereto) or in any agreement,
certificate or other document delivered or given pursuant to
this Agreement, including without limitation the
representations and warranties set forth in Article 3, shall be
true and correct in all material respects as at the Closing
Time and with the same effect as if made at and as of the
Closing Time.
(b) PERFORMANCE OF OBLIGATIONS - The Purchaser shall have complied
with and performed in all respects all its obligations, covenants
and agreements herein.
6.3 NON-PERFORMANCE OF CONDITIONS FOR THE BENEFIT OF THE PURCHASER - In the
event that any of the conditions set forth in Section 6.1 shall not be fulfilled
and/or performed at or before the time stipulated therein, the Purchaser may
terminate this Agreement by notice in writing to the Vendor, and the Purchaser
shall thereupon be released from all obligations under this Agreement.
6.4 NON-PERFORMANCE OF CONDITIONS FOR THE BENEFIT OF THE VENDOR - In the
event that any of the conditions set forth in Section 6.2 shall not be fulfilled
and/or performed at or before the Closing Time, the Vendor may terminate this
Agreement by notice in writing to the Purchaser, and the Vendor shall thereupon
be released from all obligations under this Agreement.
ARTICLE 7
COVENANTS OF THE VENDOR AND THE PURCHASER
7.1 ACCESS TO BOOKS AND RECORDS - During the period of thirty (30) days
following the Closing Date, the Purchaser shall have unrestricted access to make
copies of any or all of the books, records, books of account, lists of suppliers
and customers of the Vendor and all other documents, files, records and other
data, relating to the Purchased Business and the Purchased Assets, including
financial records. Following such period, the Purchaser shall continue to have
access to such documents, books and records upon providing reasonable advance
notice of its requirements. Such documents, books and records shall remain the
property of the Vendor.
7.2 LICENCE TO USE NAME - For the period of six (6) months following the
Closing Date, the Purchaser shall and hereby does grant to the Vendor a
non-transferable, worldwide, royalty-free license to use the name "Westbeach"
solely in connection with the remittance of accounts payable which remain the
responsibility of the Vendor and the collection of Accounts Receivable and for
such other purposes as the Purchaser may approve in writing in advance, such
approval not to be unreasonably withheld or delayed. In connection with the
foregoing, the Vendor shall conduct itself as it has to date in the ordinary
course of its business and shall not do anything whatsoever outside the ordinary
course of business which would have the effect of damaging or diminishing the
goodwill of the Purchased Business.
7.3 CONFIDENTIALITY - In the event of the termination of this Agreement
without consummation of the transactions contemplated hereby, the Purchaser will
use its best efforts to keep confidential any information (unless in the public
domain) obtained from the Vendor. If this Agreement is so terminated, promptly
after such termination, all documents, working papers and other written material
obtained from one party in connection with this Agreement and not
- 22 -
theretofore made public (including all copies thereof), shall be returned to
the party which provided such material.
7.4 NON-WAIVER - No investigations made by or on behalf of the Purchaser at
any time shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation, warranty or covenant made by the Vendor herein or
in any agreement, certificate or any other document delivered or given pursuant
hereto.
7.5 COVENANTS OF THE VENDOR - Without limiting anything elsewhere herein
contained, the Vendor covenants and agrees that it shall do the following:
(a) DELIVERY OF CLOSING DOCUMENTS - At the Closing Time, the Vendor
shall deliver to the Purchaser all necessary assurances,
assignments and consents, and any other documents necessary or
reasonably required to effectively transfer the Purchased Assets
to the Purchaser with a good and marketable title, free and clear
of all mortgages, liens, demands, charges, pledges, adverse
claims, rights, title, retention agreements, security interests or
other encumbrances of any nature of kind whatsoever.
(b) EMPLOYEES - The Vendor shall terminate the employment of the
employees employed by the Vendor in the Purchased Business.
(c) ACTUAL POSSESSION - At the Closing Time, the Vendor shall deliver
actual possession of the Purchased Assets to the Purchaser.
(d) LIMITATION ON DISPOSITIONS - The Vendor shall not sell or
otherwise dispose of any assets related to the Purchased Business,
without the prior written consent of the Purchaser, other than in
the ordinary course of business and consistent with past practice.
(e) NAME CHANGE - No later than six (6) months following the Closing
Date, the Vendor shall discontinue all use of the name "Westbeach"
and thereafter never use such name or any confusingly similar
names or variations thereof for any purpose, whether as, or as
part of, a trade xxxx, trade name or corporate name.
(f) PAYMENT OF SURCHARGE - The Vendor shall pay the Surcharge within
two business days of the Closing Date.
7.6 COVENANTS OF THE PURCHASER - Without limiting anything elsewhere herein
contained, the Purchaser covenants and agrees that the Purchaser shall do the
following:
(a) CORRECTNESS OF REPRESENTATIONS AND WARRANTIES - The Purchaser
shall cause each of the covenants, representations and warranties
of the Purchaser contained herein, including, without limitation,
Article 4, to remain true and correct until and at the Closing
Time.
(b) EMPLOYEES - The Purchaser shall indemnify and save harmless the
Vendor of
- 23 -
and from any claim by an employee of the Purchased Business who
accepts an offer of employment given by the Purchaser to such
employee in compliance with Section 2.5(c).
ARTICLE 8
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE VENDOR AND THE PURCHASER
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE VENDOR - The
representations, warranties and covenants of the Vendor contained in this
Agreement or in any agreement, certificate or any other document delivered or
given pursuant to this Agreement shall survive the completion of the
transactions contemplated by this Agreement and, notwithstanding such completion
or any investigation made by or on behalf of the Purchaser, shall continue in
full force and effect for the benefit of the Purchaser, provided, however, that
subject to Article 9:
(a) the covenants, representations and warranties of the Vendor other
than those described in sub-paragraph (b) below shall terminate at
the expiration of six (6) months from the Closing Date; and
(b) those covenants, representations and warranties of the Vendor
relating to title to or ownership of the Purchased Assets shall
survive indefinitely.
8.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER -
The covenants, representations and warranties of the Purchaser contained in this
Agreement or in any agreement, certificate or any other document delivered or
given pursuant to this Agreement shall survive the completion of the
transactions contemplated by this Agreement and, notwithstanding such completion
or any investigation made by or on behalf of the Vendor, shall continue in full
force and effect for the benefit of the Vendor until the expiration of the
period referred to in paragraph 8.1(a).
ARTICLE 9
INDEMNIFICATION
9.1 THE VENDOR TO INDEMNIFY - Subject to the limitations hereinafter provided
in this Article 9, the Vendor covenants and agrees to indemnify and save
harmless the Purchaser of and from:
(a) the failure of the Vendor to pay, satisfy, discharge, perform and
fulfil any obligations or liabilities, contingent or otherwise, of
the Vendor except those to be expressly assumed by the Purchaser
pursuant to this Agreement;
- 24 -
(b) any claim by any employee of the Purchased Business who refuses to
accept an offer of employment given by the Purchaser to such
employee in compliance with paragraph 2.5(c) or any claim by any
employee of the Purchased Business to whom the Purchaser does not
offer employment provided that the indemnity contained in this
paragraph 9.1(b) will not apply to any claim by such employee
which relates solely to an event occurring after the Closing Time;
(c) any loss suffered by the Purchaser as a result of any breach of
any representation, warranty or covenant of the Vendor contained
in this Agreement or in any agreement, certificate or other
document delivered or given pursuant to this Agreement; and
(d) all claims, actions, causes of action, damages, losses,
liabilities, demands, costs and expenses (including legal expenses
on a solicitor-client basis) in respect of the foregoing or those
listed in Schedule 3.1(r).
Subject to the limitations hereinafter provided in this Article 9, the liability
of the Vendor under this Section 9.1 shall cease upon the expiration of the
respective limitation periods set out in Article 8 unless the Vendor shall have
been given notice by the Purchaser of any claim hereunder pursuant to this
Section 9.1 prior to such date in which event the limitation period shall not
apply with respect to such claim.
9.2 NOTIFICATION TO THE VENDOR - The Purchaser shall forthwith notify the
Vendor of any amounts for which the Vendor may be liable under Section 9.1 and
the Vendor shall have the right to participate in any negotiations with respect
thereto.
9.3 NO LIMITATION - Nothing contained in this Agreement shall limit the
liability of the Vendor to the Purchaser by reason of any fraudulent breach of
representation or warranty contained in this Agreement or in any agreement,
certificate or other document delivered or given pursuant to this Agreement, or
limit the time within which a claim hereunder on account of such fraudulent
breach may be made.
ARTICLE 10
CLOSING
10.1 CLOSING DATE AND TRANSFER OF POSSESSION - Subject to compliance with the
terms and conditions hereof, the transfer of possession of the Purchased
Business shall be deemed to take effect as at the Closing Time. The Vendor
covenants and agrees that all acts and proceedings taken by the Vendor in the
management and operation of the Purchased Business from the date hereof shall be
subject to the prior approval of the Purchaser, which approval shall not be
unreasonably withheld.
10.2 CLOSING - The sale and purchase of the Purchased Business hereunder shall
be completed at the Closing Time following the exchange in advance by fax, mail
or courier of closing documentation or, alternatively, at such location as may
be mutually agreed upon by the
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parties hereto.
ARTICLE 11
GENERAL
11.1 PUBLIC NOTICES - The parties hereto hereby agree that all notices to
third parties and all other publicity concerning the transactions contemplated
by this Agreement shall be jointly planned and coordinated.
11.2 TIME - Time shall be of the essence of this Agreement and of every part
hereof and no extension or variation of this Agreement shall operate as a waiver
of this provision.
11.3 NOTICES - All payments and communications which may be or are required to
be given by either party to the other herein, shall (in the absence of any
specific provision to the contrary) be in writing and delivered or sent by
prepaid registered mail or telecopier to the parties at their following
respective addresses:
For the Vendor, to: 0000 Xxxxxxx Xxxx XX
Xxxxx, Xxxxxx
00000
Attn: Xxxxx Xxxxxx
Fax No.: (000) 000-0000
With a copy to: Xxxxxxx & XxXxxxxx
2100 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attn: Xxxxx Xxxxxxxxxxx
Fax No.: (000) 000-0000
For the Purchaser, to: Westbeach Sports Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxx Point - Xxxx Xxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx
00000
Attn: Xxxx Xxxxxx
Fax No.: (000) 000-0000
With a copy to: MacKenzie Fujisawa Xxxxxx Xxxxxxxxx
1800 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attn: Xxxx Xxxxxxxx
Fax No.: (000) 000-0000
and if any such payment or communication is sent by prepaid registered mail, it
shall, subject to
- 26 -
the following sentence, be conclusively deemed to have been received on the
third Business Day following the mailing thereof and, if delivered or
telecopied, it shall be conclusively deemed to have been received at the time
of delivery or transmission.
11.4 GOVERNING LAW - This Agreement and the rights and obligations and
relations of the parties hereto shall be governed by and construed in accordance
with the laws of the Province of British Columbia and the federal laws of Canada
applicable therein (but without giving effect to any conflict of laws rules).
11.5 ENUREMENT - This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors (including any successor
by reason of amalgamation of any party hereto) and permitted assigns.
11.6 ENTIRE AGREEMENT - This Agreement including the Schedules hereto
constitutes the entire agreement of the parties and supersedes all prior
agreements, negotiations, representations and proposals, whether written or
oral. There are no conditions, covenants, representations or warranties,
express or implied, statutory or otherwise relating to the subject matter hereof
except as herein expressly provided.
11.7 FURTHER ASSURANCES - The parties hereto shall with reasonable diligence
do all such things and provide all such reasonable assurances as may be required
to consummate the transactions contemplated hereby, and each party hereto shall
provide such further documents or instruments required by the other party as may
be reasonably necessary or desirable to effect the purpose of this Agreement and
carry out its provisions whether before, at or after the Closing Time. Without
limiting the generality of the foregoing, the Purchaser shall execute all
documentation requested by and prepared at the expense of the Purchaser in
connection with the assignment of the Registrations and Applications.
11.8 AMENDMENT AND WAIVER - No amendment, waiver or modification of any
provision of this Agreement shall be binding on a party unless consented to in
writing by such party. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision, nor shall any waiver constitute a
continuing waiver unless otherwise expressly provided in writing.
11.9 EFFECTIVE DATE - There shall be no agreement, whether oral, written,
express, implied or otherwise notwithstanding any performance between the
parties concerning the subject matter of this document, including without
limitation by course of conduct, doctrine of part performance, or otherwise,
until each party set out herein has duly and validly executed and delivered two
copies of this document, at which time such document shall become a valid and
binding contract, which shall be referred to as this "Agreement".
11.10 ELECTION UNDER GST - The parties agree that the sale and purchase of the
Purchased Business is eligible for an election under subsection 167(1) of the
Excise Tax Act (Canada). The parties agree to complete and file such forms and
documents necessary to effect this election in compliance with the Excise Tax
Act (Canada).
IN WITNESS WHEREOF the parties hereto have hereunto duly executed this
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Agreement as of the day and year first above written.
WESTBEACH CANADA ULC
by: /s/Xxxxx Xxxxxx
----------------------------------
title: President
WESTBEACH SPORTS INC.
by: /s/Xxxx Xxxxxx
----------------------------------
title: President
SCHEDULE 1.1(k)
INVENTORY
Westbeach Canada - Retail
Inventory Summary C$
Accessories 195,424.71
Footwear 100,754.29
Retail Inhouse 10,114.00
Ladies Streetwear 50,129.30
Outerwear 98 3,261.75
Xxxxxxxxx X0X 268,962.34
Snowboard Gear 97 1,264.50
Snowboard Gear 98 13,131.41
Snowboard Gear 00 430,683.99
Skate Gear 25,711.28
Snowboard Gear (264.00)
Street Wear 108,809.66
Surf Gear 20,834.79
Westbeach Misc 19.48
Westbeach S/S 97 14.56
F/W 97 118.00
S/S 98 401.75
S/S 99 8,064.72
WB F/W Y2K 201,342.53
Unfinished Goods 14,263.36
Xxxxxx XX 98 3,608.17
WB F/W 98 2,414.10
Total 1,459,064.69
SCHEDULE 1.1(w)
TRADEMARKS
SCHEDULE A
XXXXXXXXX XXXXXXXXXXXXX/XXXXXXXXXXXX
XXXXX XXXXXXX
XXXXXX:
Registered:
WESTBEACH (word xxxx)
THREE SURFBOARDER LOGO (design)
WESTBEACH & THREE SURFBOARDER LOGO (design)
Pending:
WESTBEACH CLASSIC (word xxxx)
CIRCLE & MAPLE LEAF LOGO (design)
UNITED STATES:
Registered:
WESTBEACH (word xxxx)
WESTBEACH & THREE SNOWBOARDER LOGO (design) (trade xxxx & service xxxx)
Pending:
WESTBEACH CLASSIC (word xxxx)
EUROPE
AUSTRIA
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
BENELUX
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
CZECH REPUBLIC
Registered:
WESTBEACH (word xxxx)
DENMARK
Registered:
WESTBEACH (word xxxx)
EUROPEAN COMMUNITY
Registered:
WESTBEACH (word xxxx)
FRANCE
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
GERMANY
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
ITALY
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
NORWAY
Registered:
WESTBEACH (word xxxx)
SPAIN
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
SWEDEN
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
SWITZERLAND
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
UNITED KINGDOM
Registered:
WESTBEACH (word xxxx)
THREE SNOWBOARDER LOGO (design)
ASIA AND SOUTH PACIFIC
AUSTRALIA
Registered:
WESTBEACH (word xxxx
THREE SNOWBOARDER LOGO (design)
CHINA
Registered:
WESTBEACH (word xxxx) [* in certain classes only]
JAPAN
Registered:
WESTBEACH (word xxxx) [* in certain classes only]
THREE SNOWBOARDER LOGO (design)
WESTBEACH & THREE SNOWBOARDER LOGO
KOREA
Registered:
WESTBEACH (word xxxx) [* in certain classes only]
NEW ZEALAND
Registered:
WESTBEACH (word xxxx)
N.B. The original applicant for many of the WESTBEACH marks was Westbeach Surf
Company, a federally incorporated company which subsequently changed its
name to Westbeach Snowboard Canada Ltd. and extraprovincially registered
in the province of British Columbia. The company then continued into the
province of Nova Scotia as Westbeach Snowboards Canada Limited where it
amalgamated with Xxxxxx Snowboards ULC and Xxxxxx Westbeach Limited to
form Xxxxxx Westbeach Canada ULC. Xxxxxx Westbeach Canada ULC later
changed its name to Westbeach Canada ULC.
All these name changes have been duly recorded for the Canadian
applications and registrations. Duly-executed requests were filed in the
U.S.P.T.O. on September 2, 1999 to record the name change from Xxxxxx
Westbeach Canada ULC to Westbeach Canada ULC. for the U.S. registrations.
The WESTBEACH CLASSIC xxxx is being filed in the name of Westbeach Canada
ULC.
None of the name recordals for the other registrations and applications
are current.
A. NORTH AMERICA
1. CANADA
WESTBEACH (word xxxx)
Status: Registered
Registration date: August 12, 1988
Registration no.: TMA343,815
Description: Men's, women's and children's clothing, namely,
t-shirts, shirts, pants, shorts, sweatshirts, tank tops,
overalls, skirts, blouses and belts; bathing suits,
jackets, jumpsuits, headbands, gloves, mitts and hats;
watchbands, towels, sunglasses, wallets and key chains;
board bags, sports bags and packs; surfboards, leashes,
banners, board waxes, scrapers and decals (wares);
operation of retail outlets selling clothing, sports
equipment and accessories (services)
Renewal/expiry date: August 12, 2003
Remarks: The registration is in the name of Westbeach
Canada ULC
Associated xxxx: TMA344,461 (WESTBEACH &
Design)
Trade xxxx agents: Boughton Xxxxxxxx Xxxx Xxxxxxxx
1000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Contact: Xxxxxxx Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxx@xxxx.xxx
WESTBEACH & DESIGN
Status: Registered
Registration date: September 9, 1988
Registration no.: TMA344,461
Description: Same as above
Renewal/expiry date: September 9, 2003
Remarks: The registration is in the name of Westbeach
Canada ULC
Associated xxxx: TMA343,815 (WESTBEACH)
Trade xxxx agents: Boughton Xxxxxxxx Xxxx Xxxxxxxx
1000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Contact: Xxxxxxx Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxx@xxxx.xxx
THREE SURFBOARDER LOGO (design)
Status: Registered
Registration date: June 23, 1989
Registration no.: TMA357,606
Description: Same as above
Renewal/expiry date: November 3, 2004
Remarks: The registration is in the name of Westbeach
Canada ULC
Associated xxxx: TMA344,461 (WESTBEACH &
Design)
Trade xxxx agents: Boughton Xxxxxxxx Xxxx Xxxxxxxx
1000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Contact: Xxxxxxx Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxx@xxxx.xxx
CIRCLE & MAPLE LEAF LOGO (design)
Status: Pending - Advertised
Filing date: November 28, 1997
Application no.: 862,974
Description: Men's, women's and children's clothing, namely,
t-shirts, pants, shorts, sweatshirts, tank tops, blouses,
jackets, pants, gloves, mitts, neck warmers and hats;
watchbands, wallets and key chains; snowboard carrying
bags, sports bags and packs; briefcases; leashes, banners,
board waxes, scrapers and decals; snowboard locks and
snowboard tools
Remarks: The application is in the name of Westbeach
Canada ULC
Trade xxxx agents: Boughton Xxxxxxxx Xxxx Xxxxxxxx
1000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Contact: Xxxxxxx Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxx@xxxx.xxx
WESTBEACH CLASSIC (word xxxx)
Status: Pending - Advertised
Filing date: January 15, 1998
Application no.: 866,789
Description: Proposed use for the sponsorship, organization
and promotion of snowboarding competitions
Remarks: The application is in the name of Westbeach
Canada ULC. Associated marks: TMA343,815 (WESTBEACH)
TMA344,461 (WESTBEACH & Design)
Trade xxxx agents: Boughton Xxxxxxxx Xxxx Xxxxxxxx
1000 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
X0X 0X0
Contact: Xxxxxxx Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxx@xxxx.xxx
2. UNITED STATES
WESTBEACH (word xxxx)
Status: Registered
Registration date: August 8, 1995
Registration no.: 1,909,709
Classes: 6, 14, 18, 20, 25, 28
Declaration period: August 8, 2000-August 7, 2001
Renewal/expiry date: August 8, 2005
Remarks: The registrations are in the name of Xxxxxx
Westbeach Canada ULC. A request to record the name change
to Westbeach Canada ULC was filed on September 2, 1999.
Trade xxxx agents: Xxxxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx Center
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
U.S.A.
Contact: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxx.xxx
THREE SNOWBOARDER LOGO (design/service xxxx)
Status: Registered
Registration date: November 12, 1996
Registration no.: 2,016,009
Class: 42
Declaration period: November 12, 2001-November 12, 2002
Renewal/expiry date: November 12, 2006
Remarks: The registration is in the name of Xxxxxx
Westbeach Canada ULC. A request to record the name
change to Westbeach Canada ULC was filed on
September 2, 1999.
Trade xxxx agents: Xxxxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx Center
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
U.S.A.
Contact: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 00000000
Email: xxxxxx@xxxxxxxxxxxx.xxx
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: August 8, 1995
Registration no.: 1,909,709
Classes: 6, 14, 18, 20, 25, 28
Declaration period: 8 & 15 declaration filed May 18, 1999
Renewal/expiry date: August 8, 2005
Remarks: The registration is in the name of Xxxxxx
Westbeach Canada ULC. A request to record the name change
to Westbeach Canada ULC was filed on September 2, 1999.
Trade xxxx agents: Xxxxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx Center
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
U.S.A.
Contact: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxx@xxxxxxxxxxxx.xxx
WESTBEACH CLASSIC (word xxxx)
Status: In the process of refiling
Filing date: November __, 1999
Application no.: Not yet available
Class: 35
Remarks: The application will be in the name of
Westbeach Canada ULC
Trade xxxx agents: Xxxxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
U.S.A.
Contact: Xxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxx@xxxxxxxxxxx.xxx
B. EUROPE
1. AUSTRIA
WESTBEACH (word xxxx)
Status: Registered
Registration date: N/A
Registration no.: 126,322
Classes: 18, 25
Renewal/expiry date: August 31, 1999
Remarks: The registration can be renewed within six
months of the expiry date (i.e. by February 28, 1999) by
payment of a fine of 9,500ATS. The recorded owner is still
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Xx. Xxxxxx X. Xxxxxxx
Xxxxxxxxxxxxx 0x
Xxxxxx X-0000 Xxxxxxx
Tel: 00 0 000 0000
Fax: 00 0 000 0000
Email: x.xxxxxxx@xxxxxx.xx
THREE SNOWBOARDERS LOGO
Status: Registered
Registration date: n/a
Registration no.: 147,702
Classes: 14 & 28
Renewal/expiry date: June 23, 2003
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Patentanwalte Puchberger
Xxxxxxxxxxxxx 00
X-0000 Xxxx
Xxxxxxx
Tel: 00 0 000 0000
Fax: 00 0 000 0000
Email: xxxxxx@xxxxxxxxxx.xx.xx
2. BENELUX (BELGIUM, LUXEMBOURG & THE NETHERLANDS)
WESTBEACH (word xxxx)
Status: Registered/Renewed
Registration date: March 16, 1989
Registration no.: 457928
Classes: 18, 25
Renewal/expiry date: March 16, 2009
Remarks: The registration is in the name of Xxxxxx
Westbeach Canada ULC.
Trade xxxx agents: Vereenigde Octrooibureaux
Sietse U. Ottevangers
Xxxxxx Xxxxxxxx 00
Xxx Xxxxx 0000XX
Xxx Xxxxxxxxxxx
Tel: 00 00 000 0000
Fax: 00 00 000 0000
Email: xxxxxxxxx@xxxxxx.xx
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: July 15, 1993
Registration no.: 534413
Classes: 14, 18, 25
Renewal/expiry date: July 15, 2003
*
Registration date: September 13, 1994
Registration no. 556385
Class: 28
Renewal/expiry date: September 13, 2004
*
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Xx Xxxxx, Xxx Xxxxx & Lagae
Xxx Xxxxxxxxx 00
X-0000 Xxxxxxxx
Xxxxxxx
Tel: 00-0 000 00 00
Fax: 00-0 000 00 00
3. CZECH REPUBLIC
WESTBEACH (word xxxx)
Status: Registered
Registration date: April 28, 1998
Registration no.: 208.872
Classes: 18, 25, 28
Renewal/expiry date: June 5, 2005
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Associated Law Offices
Xxxxxxxx & Partners
Xxxxxxx 0
000 00 Xxxxxx 0
Xxxxx Xxxxxxxx
Tel: 00 00 00 00 00
Fax: 00 00 00 00 00
4. DENMARK
WESTBEACH (word xxxx)
Status: Registered
Registration date: September 28, 1990
Registration no. 6401-1990
Classes: 18, 25
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Renewal/expiry date: September 28, 2000
Trade xxxx agents: Plougmann Vingtoft & Partners A/S
Sankt Xxxxx Xxxxx 00
Xxx 0000
XX-0000 Xxxxxxxxxx X
Denmark
Tel: 00 00 00 00 00
Fax: 00 00 00 00 00
Email: xx@xx.xxx
5. EUROPEAN COMMUNITY
WESTBEACH (word xxxx)
Status: Registered
Registration date: January 8, 1999
Registration no.: 473774
Classes: 16, 18, 25, 41
Renewal/Expiry: April 10, 2006
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Contact: Xxxxxxx Xxxxxx
Tel: 00 000 000 0000
Fax: 00 000 000 0000
6. FRANCE
WESTBEACH (word xxxx)
Status: Registration renewed
Registration date: November 19, 1997
Registration no.: 1436421
Class: 25
Renewal/expiry date: November 19, 2007
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: Xxxxx 0, 0000
Xxxxxxxxxxxx no.: 93458422
Classes: 14, 18, 25, 28
Renewal/expiry date: March 7, 2003.
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Tel: 00 000 000 0000
Fax: 00 000 000 0000
7. GERMANY
WESTBEACH (word xxxx)
Status: Registration renewed
Registration date: December 23, 1988
Registration no.: 1132456
Class: 25
Renewal/expiry date: November 20, 2007
Remarks: The registration is in the name of Westbeach
Surf Company Ltd.
Trade xxxx agents: Xxxxxxx & Xxxxxxxxx-Xxxxxxx
80331 Munchen
Xxxxxxxxxxxx 0, Xxxxxxx
Tel: (089) 210 38-0
Fax: (000) 000 00-000
WESTBEACH (word xxxx)
Status: Registered
Registration date: October 16, 1989
Registration no.: W 38969
Class: 18
Renewal/expiry date: February 2, 1999
Remarks: The registration is in the name of Westbeach
Surf Company Ltd.
Trade xxxx agents: Patentwalt Dipl.-Ing. Xxxx Xxxxxxx
Xxxxxxxxxxxxxxxxxxxx 00
X-00000 Xxxxxx, Xxxxxxx
Tel: 00 00 00 00 00
Fax: 00 00 00 00
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: September 23, 1993
Registration no.: 2045595
Classes: 14, 18, 25, 28
Renewal/Expiry date: January 5, 2003
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Patentwalt Dipl.-Ing. Xxxx Xxxxxxx
Xxxxxxxxxxxxxxxxxxx 00
X-00000 Xxxxxx, Xxxxxxx
Tel: 00 00 00 00 00
Fax: 00 00 00 00
8. ITALY
WESTBEACH (word xxxx)
Status: Registration renewed
Registration date: June 13, 1989
Registration no.: 510 394
Class: 25
Renewal/expiry date: Not yet available
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Ing. Barzano & Zanardo Roma X.X.X.
00, Xxx Xxxxxxxx-00000
Xxxx, Xxxxx
Tel: 00 0 00 00 000
Fax: 00 0 00 00 000
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: February 17, 1993
Registration no.: RM93C/000461
Classes: 14, 18, 25, 28
Renewal/expiry date: February 17, 2003
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Ing. Barzano & Zanardo Roma X.X.X
00 Xxx Xxxxxxxx-00000
Xxxx, Xxxxx
Tel: 00 0 00 00 000
Fax: 00 0 00 00 000
9. NORWAY
WESTBEACH (word xxxx)
Status: Registered
Registration date: October 25, 1990(?)
Registration no.: 143 228
Classes: 18 and 25
Renewal/expiry date: October 25, 2000
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Bryns Xxxxxxxxxxxx X/X
XX Xxx 000 Xxxxxxx
X-0000 Xxxx, Xxxxxx
Tel: 00 00 00 00 00
Fax: 00 00 00 00 00
10. SPAIN
WESTBEACH (word xxxx)
Status: Registered
Registration date: May 8, 1989
Registration nos.: 1322348 (18)
1322349 (25)
Classes: 18, 25
Remarks: Quinquennial taxes due October 5, 2000 and May
6, 2001. The registrations are in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Roeb & Co. X.X.
Xxxxxxxx Xxxxxx Xx. 000
00000 Xxxxxx, Xxxxx
Tel: 000 000 0000
Fax: 000 000 0000
THREE SNOWBOARDER LOGO
Status: Registered
Registration date: January 27, 1993(?)
Registration No. 1741411 (14)
1741412 (18)
1741413 (25)
1741414 (28)
Classes: 14, 18, 25, 28
Expiry date: January 27, 2003
Remarks: Quinquennial tax paid on March 6, 1998. The
registrations are in the name of Westbeach Snowboard Canada
Ltd.
Trade xxxx agents: Xxxxxxxx
Xxxxxx Xxxxx, 00
00000 Xxxxxx
Xxxxx
Tel: 000 000 00 00
Fax: 000 000 00 00
Email: xxxxxxxx@xxxxxxx.xxx
11. SWEDEN
WESTBEACH (word xxxx)
Status: Registered
Registration date: March 21, 1991
Registration no.: 222 027
Classes: 18, 25
Renewal/expiry date: March 21, 2001
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Nihlmarks Xxxxxxxxxxx XX
Xxx 0000
X-00000
Xxxxxxxxx, Xxxxxx
Tel: 00 0 00 00 00
Fax: 00 0 00 00 00
THREE SNOWBOARDER LOGO
Status: Registered
Registration date: November 5, 1993
Registration no.: 253 160
Classes: 14, 18, 25, 28
Renewal/expiry date: November 5, 2003
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxxxx & Leman
Xxxxxxxxxxx 0X
Xxx 0000
X-00000 Xxxxxxxxx
Xxxxxx
Tel: 00 0 000 00 00
Fax: 00 0 000 00 00
12. SWITZERLAND
WESTBEACH (word xxxx)
Status: Registered
Registration date: March 16, 1989(?)
Registration no.: 371 372
Classes: 18 and 25
Renewal/expiry date: March 16, 2009
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: X. X. Xxxx & Co.
Xxxxxxxxxxxxxx 0
Xxxxxx XX 0000
Xxxxxxxxxxx
Tel: 00 0 000 00 00
Fax: 00 0 000 00 00
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: January 4, 1993
Registration no.: 403 276
Classes: 14, 18, 25, 28
Renewal/expiry date: January 4, 2013
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Novamark S.A.
0 xxx xx Xxxxxx
0000 Xxxxxx
Xxxxxxxxxxx
Tel: 00 00 000 0000
Fax: 00 00 000 0000
13. UNITED KINGDOM
WESTBEACH (word xxxx)
Status: Registered
Registration date: May 22, 2004
Registration no.: 1327554
Class: 25
Renewal/expiry date: May 22, 2008
Remarks: The registration is in the name of Westbeach
Snowboard Canada
Ltd.
Trade xxxx agents: Page White & Xxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Tel: 00 000 000 0000
Fax: 00 000 000 0000
Website: xxxxxxxxx.xx.xx
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: December 24, 1992
Registration nos.: 1522633 (14)
1522634 (18)
1522636 (25)
1522635 (28)
Classes: 14, 18, 25, 28
Renewal/expiry date: December 24, 1999
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Tel: 00 000 000 0000
Fax: 00 000 000 0000
Website: xxxx://xxx.xxxxxxxxxxxxxx.xxx
C. ASIA AND SOUTH PACIFIC
1. AUSTRALIA
WESTBEACH (word xxxx)
Status: Registered
Registration date: May 10, 1989
Registration nos: A510416 (25)
A510417 (18)
Classes: 18, 25
Renewal/expiry date: May 10, 2006
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxx Xxxxx & Xxxxxx
XX Xxx 000
Xxxxxxxxxx
Xxxxxxxx 0000
Xxxxxxxxx
Tel: 00 0 0000 0000
Fax: 00 0 0000 0000
email: xxxxxx@xxx.xxx.xx
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: April 30, 1993
Registration nos: A601592 (14)
A601593 (18)
A601594 (25)
A601595 (28)
Classes: 14, 18, 25, 28
Renewal/expiry date: April 30, 2003
Remarks: Registrations are in the name of Xxxxxx
Westbeach Canada ULC.
Trade xxxx agents: Xxxxxxxx Xxxx
XXX Xxx 0000
Xxxxxx XXX 0000
Xxxxxxxxx
Contact: Xxxx Xxxxx
Tel: 000 0000 0000
Fax: 000 0000 0000
email: xxxx.xxxxx@xxxxxxxxxxxx.xxx.xx
2. PEOPLE'S REPUBLIC OF CHINA
WESTBEACH (word xxxx)
Status: Registered
Registration date: September 21, 1997
Registration nos.: 1106204 (18)
1100170 (25)
Classes: 18, 25
Renewal/expiry date: September 20, 2007
*
Status: Registered
Registration date: November 14, 1997
Registration no.: 1126823
Class: 28
Renewal/expiry date: November 13, 2007
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Shanghai Patent & Trademark Agency
000 Xxxxxxx Xxxx
Xxxxxxxxx Xx-Xxxx Xxxx
Xxxxxxxx 000000
Xxxxx
Tel: 00 00 00000000
Fax: 00 00 00000000
3. JAPAN
WESTBEACH (word xxxx)
Status: Registered
Registration date: September 30, 1991
Registration no. 2334876
Class: J21 (Japanese)
Renewal/expiry date: September 30, 2001
Remarks: This registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: Sonderhoff & Xxxxxx
Xx. 00 Xxxx Xxxxxxxx
00xx Xxxxx
0-0 Xxxxx Xxxxxxxxx 0-xxxxx
Xxxxxx-xx, Xxxxx 000
Xxxxx
Tel: 00 0 0000 0000
Fax: 00 0 0000 0000
THREE SNOWBOARDER LOGO (design)
Status: Registered
Registration date: April 28, 1994
Registration no.: 2648294
Class: J24
*
Status: Registered
Registration date: July 31, 1996
Registration nos.: 3178899 (14)
3178900 (18)
Classes: 14, 18
*
Status: Registered
Registration date: August 30, 1996
Registration no.: 3189122
Class: 25
*
Status: Registered
Registration date: May 16, 1997
Registration no.: 3305900
Class: 28
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: c/o Kashiwagi Sogo Law Offices
Atago Toyo Xxxxxxxx
0-0 Xxxxx 0-Xxxxx
Xxxxxx-xx, Xxxxx 000
Xxxxx
Tel: 00 0 0000 0000
Fax: 00 0 0000 0000
WESTBEACH & THREE SNOWBOARDER LOGO
Status: Registered
Registration date: July 29, 1994
Registration no. 2686720
Class: J24
Renewal/expiry date: July 29, 2004
Remarks: The registration is in the name of Westbeach
Snowboard Canada Ltd.
Trade xxxx agents: c/o Kashiwagi Sogo Law Offices
Atago Toyo Xxxx.
0-0 Xxxxx 0-Xxxxx
Xxxxxx-xx, Xxxxx 000
Xxxxx
Tel: 00 0 0000 0000
Fax: 00 0 0000 0000
4. KOREA
WESTBEACH (word xxxx)
Status: Registered
Registration date: December 13, 1997
Registration nos.: 386328 (K25)
386329 (K43)
Classes: X00, X00
Xxxxxxx/xxxxxx date: December 12, 2007
*
Status: Registered
Registration date: December 29, 1997
Registration no.: 388848
Class: K45
Renewal/Expiry: December 29, 2007
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Xxx, Xxx & Xxx
Xxxx-A Xxxx.
00-0, Xxxxxxxx-Xxxx
Xxxxx-xx
Xxxxx 000-000
Xxxxx
Tel: 00 0 000 0000
Fax: 00 0 000 0000
5. NEW ZEALAND
WESTBEACH (word xxxx)
Status: Registered
Registration date: June 15, 1995
Registration nos.: 250170 (18)
250171 (25)
Renewal/expiry date: June 15, 2002
Remarks: These registrations are in the name of
Westbeach Snowboard Canada Ltd.
Trade xxxx agents: Xxxxxxx Son & Xxxxx
Xxxxx 00
XXX Xxxxx
000 Xxxxxxx Xxxx
XX Xxx 000
Xxxxxxxxxx, Xxx Xxxxxxx
Tel: 00 0 000 0000
Fax: 00 0 000 0000
Email: xxxxx@xxxxxx.xxxxxxxx.xx.xx
SCHEDULE 2.3
ALLOCATION OF PURCHASE PRICE
Fixed Assets $234,697.25
Inventories $999,235.42
Accounts Payable ($902,670.15)
Trademarks $79,531.81
-------------
Net Assets Value $410,794.33
Goodwill $2,039,205.67
-------------
Purchase Price $2,450,000.00
SCHEDULE 3.1(f)
FINANCIAL STATEMENTS
WESTBEACH CANADA ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE 9 MONTHS ENDING
SEPTEMBER 25, 1999
CANADA RETAIL ADJ CDN.CON US - RETAIL
------------------------------------------------------------------------------------
CASH 28,376 1,850 -- 30,226 5,642
ACCOUNTS RECEIVABLE - NET 957,976 -- 957,976 --
ACCTS. REC. - OTHER 276,518 -- 276,518 --
INVENTORY 580,018 1,097,099 (27,217) 1,649,900 210,535
INVENTORY - OTHER 8,991 -- 8,991 --
RECEIVABLE INCOME TAX 78,000 -- 78,000 --
PREPAID 1,013,549 2,473 1,016,022 --
------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,943,428 1,101,422 (27,217) 4,017,633 216,177
FURNITURE & EQUIPMENT 181,388 43,864 225,252 12,520
COMPUTER EQUIPMENT 253,735 63,766 317,501 24,585
AUTOMOBILE 8,063 8,063 16,126 --
LEASEHOLD IMPROVEMENTS 4,935 242,918 247,853 16,037
ACCUMULATED DEPREC (364,913) (204,575) (569,488) (33,883)
TRADEMARKS 118,060 -- 118,060 --
------------------------------------------------------------------------------------
TOTAL FIXED ASSETS 201,268 154,036 -- 355,304 19,259
DEFERRED REFINANCING -- --
WB - U.K (117,898) (117,898)
WB- U.K. - INVESTMENT 215 215
WB - EUROPE 548,642 548,642
WB- EUROPE - INVESTMENT 61,500 61,500
WB - RETAIL (1,618,093) -- 1,618,093 --
WB - USA - SALEM 82,120 82,120
WB - USA 1,458,667 1,458,667
WB - USA - INVESTMENT 133 133
------------------------------------------------------------------------------------
TOTAL ASSETS 3,559,982 1,255,458 1,590,876 6,406,316 235,436
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
DUE FROM WB US -- -- 989,554
DUE FROM WB US - SALEM -- --
DUE FROM WB RETAIL -- (1,618,093) 1,618,093 --
DUE FROM WB GmbH
DUE FROM WB U.K --
BANK LOAN - SCOTIA BANK -- -- -- -- --
ACCOUNTS PAYABLE 841,492 1,128,447 1,969,939 150,409
ACCRUED PAYABLES 268,756 83,508 352,264 8,609
INCOME TAX PAYABLE 29,232 -- 29,232 --
UNEARNED REVENUE -- --
SHORT TERM LOAN -- --
CAP LEASE/LOAN - CURRENT -- -- --
------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,139,480 (406,138) 1,618,093 2,351,435 1,148,572
DEFERRED TAX -- -- --
CAP. LEASE/LOAN - L.T -- -- -- --
LOAN FROM PARENT - XXXXXX 2,730,000 2,730,000 --
INTERCOMPANY - XXXXXX (96,257) -- (96,257) (575,311)
------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,773,223 (406,138) 1,618,093 4,985,178 573,261
EQUITY:
SHARE CAPITAL 174,340 174,340 100
CURRENCY TRANSLATION
OPENING RETAINED EARNINGS (810,164) 1,370,528 (73,299) 487,065 (148,378)
INCOME 422,583 291,068 46,082 759,733 (189,547)
------------------------------------------------------------------------------------
CLOSING RETAINED EARNINGS (387,581) 1,661,596 (27,217) 1,246,798 (337,925)
TOTAL EQUITY (213,241) 1,661,596 (27,217) 1,421,138 (337,825)
------------------------------------------------------------------------------------
TOTAL LIAB. & EQUITY 3,559,982 1,255,458 1,590,876 6,406,316 235,436
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
US - SALEM CDN. EQ. ADJ EUROPE CDN. EQ.
-----------------------------------------------------------------------------------------
CASH 2,441 11,916 773,373 86,386
ACCOUNTS RECEIVABLE - NET 115,257 169,912 2,419,271 270,233
ACCTS. REC. - OTHER (4,212) (6,209) 544,386 60,808
INVENTORY 78,907 426,695 (734) 3,228,360 360,608
INVENTORY - OTHER 4,212 6,209 206,745 23,093
RECEIVABLE INCOME TAX --
PREPAID 127,588 188,090 16,942 1,892
-----------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 324,193 796,613 (734) 7,189,077 803,020
FURNITURE & EQUIPMENT 16,752 682,620 76,249
COMPUTER EQUIPMENT 33,409 177,455 19,822
AUTOMOBILE 415,940 46,460
LEASEHOLD IMPROVEMENTS 22,243 20,177 2,254
ACCUMULATED DEPREC (47,229) (432,082) (48,264)
TRADEMARKS --
-----------------------------------------------------------------------------------------
TOTAL FIXED ASSETS -- 25,176 -- 864,110 96,521
DEFERRED REFINANCING
WB - U.K -- 2,128,314 237,733
WB- U.K. - INVESTMENT --
WB - EUROPE --
WB- EUROPE - INVESTMENT --
WB - RETAIL --
WB - USA - SALEM -- (82,120)
WB - USA -- (1,458,667)
WB - USA - INVESTMENT -- (133)
-----------------------------------------------------------------------------------------
TOTAL ASSETS 324,193 821,789 (1,541,654) 10,181,501 1,137,274
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
DUE FROM WB US -- 1,458,801 (1,458,801) --
DUE FROM WB US - SALEM 55,705 82,120 (82,120) --
DUE FROM WB RETAIL -- -- --
DUE FROM WB GmbH -- -- 4,911,744 548,642
DUE FROM WB U.K --
BANK LOAN - SCOTIA BANK -- -- -- --
ACCOUNTS PAYABLE 23,718 256,698 -- 1,636,208 182,764
ACCRUED PAYABLES 7,965 24,433 -- (41,110) (4,592)
INCOME TAX PAYABLE -- --
UNEARNED REVENUE --
SHORT TERM LOAN --
CAP LEASE/LOAN - CURRENT --
-----------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 87,388 1,822,052 (1,540,921) 6,506,842 726,814
DEFERRED TAX
CAP. LEASE/LOAN - L.T
LOAN FROM PARENT - XXXXXX -- -- -- -- --
INTERCOMPANY - XXXXXX 358,113 (320,193) -- 8,879,104 991,796
-----------------------------------------------------------------------------------------
TOTAL LIABILITIES 445,501 1,501,859 (1,540,921) 15,385,946 1,718,610
EQUITY:
SHARE CAPITAL -- 147 (147) 500,000 55,850
CURRENCY TRANSLATION -- (19,190) 148 -- 103,183
OPENING RETAINED EARNINGS -- (194,330) (2,064) (3,521,139) (461,672)
INCOME (121,308) (466,696) 1,330 (2,183,306) (278,697)
-----------------------------------------------------------------------------------------
CLOSING RETAINED EARNINGS (121,308) (661,027) (734) (5,704,445) (740,369)
TOTAL EQUITY (121,308) (680,069) (733) (5,204,445) (581,336)
-----------------------------------------------------------------------------------------
TOTAL LIAB. & EQUITY 324,193 821,790 (1,541,654) 10,181,501 1,137,274
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
ADJ- SALEM U.K. CDN. EQ. ADJ WB-CONS
------------------------------------------------------------------------------------
CASH -- 641 2,037 -- 130,565
ACCOUNTS RECEIVABLE - NET 3,472 8,409 -- 1,406,530
ACCTS. REC. - OTHER 33,784 81,825 -- 412,941
INVENTORY (1,393) -- -- -- 2,435,076
INVENTORY - OTHER -- -- 38,294
RECEIVABLE INCOME TAX -- -- 78,000
PREPAID 1,728 4,185 1,210,190
------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS (1,393) 39,825 96,456 -- 5,711,596
FURNITURE & EQUIPMENT -- -- 318,252
COMPUTER EQUIPMENT -- 370,732
AUTOMOBILE -- 62,586
LEASEHOLD IMPROVEMENTS -- 272,350
ACCUMULATED DEPREC -- (664,980)
TRADEMARKS -- -- -- 118,060
------------------------------------------------------------------------------------
TOTAL FIXED ASSETS -- -- -- -- 477,001
DEFERRED REFINANCING -- --
WB - U.K (237,733) 117,898 (0)
WB- U.K. - INVESTMENT -- (215) --
WB - EUROPE (548,642) --
WB- EUROPE - INVESTMENT (61,500) --
WB - RETAIL --
WB - USA - SALEM --
WB - USA --
WB - USA - INVESTMENT --
------------------------------------------------------------------------------------
TOTAL ASSETS (849,268) 39,825 96,456 117,683 6,188,596
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
DUE FROM WB US -- -- (0)
DUE FROM WB US - SALEM -- -- 0
DUE FROM WB RETAIL -- -- -- --
DUE FROM WB GmbH (786,330) 98,137 237,688 (0)
DUE FROM WB U.K -- (48,678) (117,898) 117,898 (0)
BANK LOAN - SCOTIA BANK -- -- -- -- --
ACCOUNTS PAYABLE -- 1,590 3,851 2,413,252
ACCRUED PAYABLES -- 18,728 45,359 417,465
INCOME TAX PAYABLE -- -- -- 29,232
UNEARNED REVENUE -- -- -- --
SHORT TERM LOAN --
CAP LEASE/LOAN - CURRENT -- --
------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES (786,330) 69,777 169,000 117,898 2,859,948
------------------------------------------------------------------------------------
DEFERRED TAX --
CAP. LEASE/LOAN - L.T --
LOAN FROM PARENT - XXXXXX -- 2,730,000
INTERCOMPANY - XXXXXX 41,494 100,498 675,844
------------------------------------------------------------------------------------
TOTAL LIABILITIES (786,330) 111,271 269,498 117,898 6,265,792
EQUITY:
SHARE CAPITAL (55,850) 100 242 (242) 174,340
CURRENCY TRANSLATION (5,695) -- 10,434 27 88,907
OPENING RETAINED EARNINGS (16,412) (18,359) (55,576) -- (242,991)
INCOME 15,019 (53,187) (128,142) -- (97,453)
------------------------------------------------------------------------------------
CLOSING RETAINED EARNINGS (1,393) (71,546) (183,718) -- (340,444)
TOTAL EQUITY (62,938) (71,446) (173,042) (215) (77,197)
------------------------------------------------------------------------------------
TOTAL LIAB. & EQUITY (849,268) 39,825 96,457 117,683 6,188,596
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
WESTBEACH CANADA ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE 9 MONTHS ENDING
SEPTEMBER 25, 1999
Currrent Month YTD or Sum
WB-CONS / of Current
AVG US Exchg Months In USD
--------------------------------------
CASH $ 88,566
ACCOUNTS RECEIVABLE - NET $ 954,097
ACCTS. REC. - OTHER $ 280,112
INVENTORY $ 1,651,795
INVENTORY - OTHER $ 25,976
RECEIVABLE INCOME TAX $ 52,910
PREPAID $ 820,913
--------------------------------------
TOTAL CURRENT ASSETS 3,874,370
FURNITURE & EQUIPMENT $ 215,881
COMPUTER EQUIPMENT $ 251,480
AUTOMOBILE $ 42,455
LEASEHOLD IMPROVEMENTS $ 184,744
ACCUMULATED DEPREC $ (451,079)
TRADEMARKS $ 80,084
--------------------------------------
TOTAL FIXED ASSETS 323,566
DEFERRED REFINANCING $ --
WB - U.K $ (0)
WB- U.K. - INVESTMENT $ --
WB - EUROPE $ --
WB- EUROPE - INVESTMENT $ --
WB - RETAIL $ --
WB - USA - SALEM $ --
WB - USA $ --
WB - USA - INVESTMENT $ --
$ --
--------------------------------------
TOTAL ASSETS 4,197,935
--------------------------------------
--------------------------------------
DUE FROM WB US $ (0)
DUE FROM WB US - SALEM $ 0
DUE FROM WB RETAIL $ --
DUE FROM WB GmbH $ (0)
DUE FROM WB U.K $ (0)
BANK LOAN - SCOTIA BANK $ --
ACCOUNTS PAYABLE $ 1,636,991
ACCRUED PAYABLES $ 283,180
INCOME TAX PAYABLE $ 19,829
UNEARNED REVENUE $ --
SHORT TERM LOAN $ --
CAP LEASE/LOAN - CURRENT $ --
--------------------------------------
TOTAL CURRENT LIABILITIES 1,940,000
DEFERRED TAX $ --
CAP. LEASE/LOAN - L.T $ --
LOAN FROM PARENT - XXXXXX $ 1,851,852
INTERCOMPANY - XXXXXX $ 458,448
--------------------------------------
TOTAL LIABILITIES 4,250,300
EQUITY:
SHARE CAPITAL $ 118,261
CURRENCY TRANSLATION $ 15,050
OPENING RETAINED EARNINGS $ (160,815)
INCOME $ (24,861)
--------------------------------------
CLOSING RETAINED EARNINGS (185,675)
TOTAL EQUITY (52,365)
--------------------------------------
TOTAL LIAB. & EQUITY 4,197,935
--------------------------------------
--------------------------------------
WESTBEACH CANADA ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE 9 MONTHS ENDING
SEPTEMBER 25, 0000
XXXXXX RETAIL ADJUSTMENTS CDN. CONSOLIDAU SD- RETAIL US - SALEM CDN. EQUIV.
-----------------------------------------------------------------------------------------------
NET SALES 3,465,527 3,126,324 (296,155) 6,295,696 363,508 116,849 717,784
COST OF GOODS SOLD 2,352,602 1,935,707 (342,237) 3,946,072 275,605 65,017 509,462
-----------------------------------------------------------------------------------------------
GROSS PROFIT 1,112,925 1,190,617 46,082 2,349,624 87,903 51,832 208,322
-----------------------------------------------------------------------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN 315,330 315,330 70,942 36,570 161,793
PRODUCT MANAGEMENT 66,622 -- 66,622 39,935 59,767
SALES 385,134 -- 385,134 42,977 63,970
MARKETING 44,286 66,133
RETAIL -- 904,359 904,359 170,148 -- 254,300
COMMISSIONS 167,855 167,855 8,764 12,987
DEPRECIATION 37,647 37,647 -- --
US EX. GAIN/LOSS ON CONS (1) (10) -- (11) (10) 1 2
-----------------------------------------------------------------------------------------------
TOTAL EXPENSES 972,587 904,349 -- 1,876,936 241,100 172,533 618,953
-----------------------------------------------------------------------------------------------
E.B.I.T 140,338 286,268 46,082 472,688 (153,197) (120,701) (410,631)
GAIN/LOSS ON DISPOSAL -- -- -- -- -- --
MISC EXP/OTHER INCOME (32,733) (4,130) (36,863) (7,746) -- (11,517)
GAIN/LOSS ON EXCHANGE (200,744) (670) (201,414) 44,096 607 67,582
BANK & DEBENTURE INTEREST -- -- -- -- -- --
CORPORATE INCOME TAX (48,768) -- (48,768) -- -- --
-----------------------------------------------------------------------------------------------
NET INCOME 422,583 291,068 46,082 759,733 (189,547) (121,308) (466,696)
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
EXCHANGE RATE: September 25/99 1.4742 USD
Average 1.4819
ADJUSTMENTS EUROPE CDN. EQUIV. ADJUSTMENTS U.K. CDN. EQUIV. ADJUSTMENTS CONSOLIDATION
--------------------------------------------------------------------------------------------------
NET SALES (73,970) 9,481,277 1,107,182 (432,992) 91,758 221,585 -- 7,835,285
COST OF GOODS SOLD (75,300) 5,723,942 671,295 (448,011) 60,596 145,643 -- 4,749,161
--------------------------------------------------------------------------------------------------
GROSS PROFIT 1,330 3,757,335 435,887 15,019 31,162 75,942 -- 3,086,123
--------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN 407,744 47,892 (3,827) (9,106) 515,909
PRODUCT MANAGEMENT -- -- -- 126,389
SALES 3,486,123 425,120 93,306 225,848 1,100,072
MARKETING 66,133
RETAIL -- -- -- 1,158,659
COMMISSIONS 465,481 53,620 7,009 17,071 251,533
DEPRECIATION 270,385 31,594 -- 69,241
US EX. GAIN/LOSS ON CONS -- -- -- -- -- -- (9)
--------------------------------------------------------------------------------------------------
TOTAL EXPENSES -- 4,629,733 558,225 -- 96,488 233,813 -- 3,287,928
--------------------------------------------------------------------------------------------------
E.B.I.T 1,330 (872,398) (122,339) 15,019 (65,326) (157,871) -- (201,804)
GAIN/LOSS ON DISPOSAL -- -- -- -- --
MISC EXP/OTHER INCOME -- -- -- -- (48,380)
GAIN/LOSS ON EXCHANGE 1,310,908 156,358 (12,139) (29,729) (7,202)
BANK & DEBENTURE INTEREST -- -- -- -- --
CORPORATE INCOME TAX -- -- -- -- (48,768)
--------------------------------------------------------------------------------------------------
NET INCOME 1,330 (2,183,306) (278,697) 15,019 (53,187) (128,142) -- (97,453)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
EXCHANGE RATE: 0.1117 ATS 2.4220 GBP
0.1129 2.3927
WESTBEACH CANADA ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE 9 MONTHS ENDING
SEPTEMBER 25, 1999
Sum of
Currrent Month Current
WB-CONS / Months
AVG US Exchg In USD
NET SALES $ 1,113,380 $ 5,241,404
COST OF GOODS SOLD $ 638,979 $ 3,176,177
----------------------------------
GROSS PROFIT 474,401 2,065,226
----------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN $ 15,124 $ 343,978
PRODUCT MANAGEMENT $ 25,049 $ 84,722
SALES $ 77,004 $ 732,163
MARKETING $ 20,514 $ 34,725
RETAIL $ 79,940 $ 749,481
COMMISSIONS $ 38,752 $ 168,488
DEPRECIATION $ 5,206 $ 46,364
US EX. GAIN/LOSS ON CONS $ -- $ 1
----------------------------------
TOTAL EXPENSES 261,589 2,159,920
----------------------------------
E.B.I.T $ 212,812 (94,694)
GAIN/LOSS ON DISPOSAL $ -- $ --
MISC EXP/OTHER INCOME $ 520 $ (32,742)
GAIN/LOSS ON EXCHANGE $ 11,067 $ (3,929)
BANK & DEBENTURE INTEREST $ -- $ --
CORPORATE INCOME TAX $ -- $ (33,163)
----------------------------------
NET INCOME 201,225 (24,861)
----------------------------------
----------------------------------
EXCHANGE RATE: 1.4742
1.4819
WESTBEACH CANADA ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE MONTH TO DATE ENDING
SEPTEMBER 25, 0000
XXXXXX RETAIL ADJUSTMENTS CDN. CONSOLIDATED US- RETAIL US - SALEM CDN. EQUIV.
------------------------------------------------------------------------------------------------
NET SALES 1,055,342 288,980 (53,604) 1,290,718 47,236 116,849 243,149
COST OF GOODS SOLD 667,759 166,412 (42,983) 791,188 33,708 65,017 146,296
----------------------------------------------------------------------------------------------
GROSS PROFIT 387,583 122,568 (10,621) 499,530 13,528 51,832 96,854
----------------------------------------------------------------------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN 25,678 25,678 (5,267) 18,358 19,399
PRODUCT MANAGEMENT 30,419 30,419 4,521 6,699
SALES 46,713 46,713 25,898 38,377
MARKETING -- 13,777 20,415
RETAIL -- 105,472 105,472 20,514 -- 30,399
COMMISSIONS 32,243 32,243 8,764 12,987
DEPRECIATION 4,183 4,183 --
US EX. GAIN/LOSS ON CONS. -- -- -- --
----------------------------------------------------------------------------------------------
TOTAL EXPENSES 139,236 105,472 -- 244,708 15,247 71,318 128,276
----------------------------------------------------------------------------------------------
E.B.I.T. 248,347 17,096 (10,621) 254,822 (1,719) (19,486) (31,423)
GAIN/LOSS ON DISPOSAL -- -- -- -- -- --
MISC EXP/OTHER INCOME (99) 870 771 -- -- --
GAIN/LOSS ON EXCHANGE (10,136) -- (10,136) 10,165 607 15,962
BANK & DEBENTURE INTEREST -- -- -- -- -- --
CORPORATE INCOME TAX -- -- -- -- -- --
----------------------------------------------------------------------------------------------
NET INCOME 258,582 16,226 (10,621) 264,187 (11,884) (20,093) (47,385)
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
EXCHANGE RATE: September 25/99 1.4742 USD
Average 1.4819
ADJUSTMENTS EUROPE CDN. EQUIV. ADJUSTMENTS U.K. CDN. EQUIV. ADJUSTMENTS CONSOLIDATION
-----------------------------------------------------------------------------------------------------
NET SALES (69,406) 2,230,584 251,721 (57,537) (3,671) (8,784) -- 1,649,863
COST OF GOODS SOLD (69,483) 1,255,458 141,678 (62,808) -- -- -- 946,871
---------------------------------------------------------------------------------------------------
GROSS PROFIT 77 975,126 110,043 5,271 (3,671) (8,784) -- 702,991
---------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN (33,134) (3,739) (7,910) (18,926) 22,411
PRODUCT MANAGEMENT -- -- 37,118
SALES 223,857 25,262 1,570 3,757 114,109
MARKETING -- -- 30,399
RETAIL -- -- 118,459
COMMISSIONS 108,524 12,247 (22) (53) 57,424
DEPRECIATION 31,294 3,532 -- 7,715
US EX. GAIN/LOSS ON CONS. -- -- -- -- --
---------------------------------------------------------------------------------------------------
TOTAL EXPENSES -- 330,541 37,302 -- (6,362) (15,222) -- 387,635
---------------------------------------------------------------------------------------------------
E.B.I.T. 77 644,585 72,741 5,271 2,691 6,439 -- 315,356
GAIN/LOSS ON DISPOSAL -- -- --
MISC EXP/OTHER INCOME -- -- 771
GAIN/LOSS ON EXCHANGE 193,064 21,787 (4,687) (11,215) 16,399
BANK & DEBENTURE INTEREST -- -- --
CORPORATE INCOME TAX -- -- --
---------------------------------------------------------------------------------------------------
NET INCOME 77 451,521 50,954 5,271 7,378 17,653 -- 298,186
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
EXCHANGE RATE: 0.1117 ATS 2.4220 GBP
0.1129 0.0000
XXXXXX XXXXXXXXX XXXXXX ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE MONTH ENDING
JANUARY 30, 0000
XXXXXX RETAIL ADJUSTMENTS CDN. CONSOLIDATE USE- RETAIL US - SALEM CDN. EQUIV.
--------------------------------------------------------------------------------------------
NET SALES 2,410,185 2,837,344 (242,551) 5,004,978 316,272 -- 474,634
COST OF GOODS SOLD 1,684,843 1,769,295 (299,254) 3,154,884 241,897 -- 363,167
--------------------------------------------------------------------------------------------
GROSS PROFIT 725,342 1,068,049 56,703 1,850,094 74,375 -- 111,468
--------------------------------------------------------------------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN 289,652 289,652 76,209 18,212 142,395
PRODUCT MANAGEMENT 36,203 36,203 35,414 53,068
SALES 338,421 338,421 17,079 25,593
MARKETING 30,509 45,718
RETAIL -- 798,887 798,887 149,634 -- 223,902
COMMISSIONS 135,612 135,612 -- --
DEPRECIATION 33,464 33,464 -- --
US EX. GAIN/LOSS ON CONS 2 (8) -- (6) 9 3 4
--------------------------------------------------------------------------------------------
TOTAL EXPENSES 833,354 798,879 -- 1,632,233 225,852 101,217 490,679
--------------------------------------------------------------------------------------------
E.B.I.T (108,012) 269,170 56,703 217,861 (151,477) (101,217) (379,211)
GAIN/LOSS ON DISPOSAL -- -- -- -- -- -- --
MISC EXP/OTHER INCOME (32,634) (5,000) -- (37,634) (7,746) -- (11,517)
GAIN/LOSS ON EXCHANGE (190,608) (670) -- (191,278) 33,931 -- 51,620
BANK & DEBENTURE INTEREST -- -- -- -- -- -- --
CORPORATE INCOME TAX (48,768) -- -- (48,768) -- -- --
--------------------------------------------------------------------------------------------
NET INCOME 163,998 274,840 56,703 495,541 (177,662) (101,217) (419,313)
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
EXCHANGE RATE: August 28/99 1.4895 USD
Average 1.4985
ADJUSTMENTS EUROPE CDN. EQUIV. ADJUSTMENTS U.K. CDN. EQUIV. ADJUSTMENTS CONSOLIDATION
-----------------------------------------------------------------------------------------------
NET SALES (4,564) 7,250,693 855,460 (375,455) 95,429 230,369 -- 6,185,422
COST OF GOODS SOLD (5,817) 4,468,484 529,616 (385,203) 60,596 145,643 -- 3,802,290
-----------------------------------------------------------------------------------------------
GROSS PROFIT 1,253 2,782,209 325,844 9,748 34,833 84,726 -- 2,383,132
-----------------------------------------------------------------------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN 440,878 51,631 4,083 9,820 493,498
PRODUCT MANAGEMENT -- -- 89,271
SALES 3,262,266 399,857 91,736 222,092 985,963
MARKETING 45,718
RETAIL -- -- -- 1,022,789
COMMISSIONS 356,957 41,373 7,031 17,124 194,109
DEPRECIATION 239,091 28,062 -- 61,526
US EX. GAIN/LOSS ON CONS -- (1) -- -- -- -- -- (2)
-----------------------------------------------------------------------------------------------
TOTAL EXPENSES -- 4,299,191 520,924 -- 102,850 249,036 -- 2,892,871
-----------------------------------------------------------------------------------------------
E.B.I.T 1,253 (1,516,982) (195,080) 9,748 (68,017) (164,310) -- (509,739)
GAIN/LOSS ON DISPOSAL -- -- -- -- -- --
MISC EXP/OTHER INCOME -- -- -- -- (49,151)
GAIN/LOSS ON EXCHANGE 1,117,844 134,571 (7,452) (18,514) (23,602)
BANK & DEBENTURE INTEREST -- -- -- -- --
CORPORATE INCOME TAX -- -- -- -- (48,768)
-----------------------------------------------------------------------------------------------
NET INCOME 1,253 (2,634,826) (329,651) 9,748 (60,565) (145,795) -- (388,218)
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
EXCHANGE RATE: 0.1140 ATS 2.3634 GBP
0.1156 0.0000
XXXXXX XXXXXXXXX XXXXXX ULC
CONSOLIDATED FINANCIAL STATEMENTS FOR THE MONTH ENDING
JANUARY 30, 1999
Sum of
Currrent Month Current
WB-CONS / Months
AVG US Exchg In USD
--------------------------------
NET SALES $ 474,246 $ 4,128,023
COST OF GOODS SOLD $ 319,644 $ 2,537,198
--------------------------------
GROSS PROFIT 154,603 1,590,825
--------------------------------
OPERATING EXPENSES:
ACCOUNTING / ADMIN $ 36,215 $ 328,854
PRODUCT MANAGEMENT $ 42,172 $ 59,674
SALES $ 63,071 $ 655,159
MARKETING $ 14,211 $ 14,211
RETAIL $ 57,582 $ 669,541
COMMISSIONS $ 13,102 $ 129,736
DEPRECIATION $ 5,171 $ 41,158
US EX. GAIN/LOSS ON CONS $ - $ 1
--------------------------------
TOTAL EXPENSES 231,524 1,898,332
--------------------------------
E.B.I.T $ (76,922) (307,507)
GAIN/LOSS ON DISPOSAL $ - $ -
MISC EXP/OTHER INCOME $ 12,113 $ (33,262)
GAIN/LOSS ON EXCHANGE $ 3,980 $ (14,995)
BANK & DEBENTURE INTEREST $ - $ -
CORPORATE INCOME TAX $ - $ (33,163)
--------------------------------
NET INCOME (93,015) (226,086)
--------------------------------
--------------------------------
EXCHANGE RATE: 1.4895
1.4985
WESTBEACH CANADA ULC
CONSOLIDATED BALANCE SHEET
SEPTEMBER 25, 1999
25-Sep-99 25-Sep-99 25-Sep-99
ACTUAL - C$ BUDGET - C$ VARIANCE - C$
--------------- -------------- ---------------
CASH $ 130,565 $ - $ 130,565
ACCOUNTS RECEIVABLE - NET 1,406,530 7,204,210 (5,797,680)
ACCTS. REC. - OTHER 412,941 - 412,941
INVENTORY 2,435,076 2,539,593 (104,517)
INVENTORY - OTHER 38,294 - 38,294
RECEIVABLE INCOME TAX 78,000 - 78,000
PREPAID 1,210,190 420,750 789,440
----------- ----------- -----------
TOTAL CURRENT ASSETS 5,711,596 10,164,553 (4,452,958)
FURNITURE & EQUIPMENT 318,252
COMPUTER EQUIPMENT 370,732
AUTOMOBILE 62,586
LEASEHOLD IMPROVEMENTS 272,350
ACCUMULATED DEPREC (664,980)
TRADEMARKS 118,060
----------- ----------- -----------
TOTAL FIXED ASSETS 477,001 499,820 $ (22,819)
----------- ----------- -----------
DEFERRED REFINANCING
----------- ----------- -----------
TOTAL ASSETS $ 6,188,596 $10,664,374 $(4,475,780)
----------- ----------- -----------
BANK LOAN - SCOTIA BANK $ - $ 3,769,037 $(3,769,037)
ACCOUNTS PAYABLE 2,413,252 1,794,626 618,627
ACCRUED PAYABLES 417,465 452,184 (34,719)
INCOME TAX PAYABLE 29,232 - 29,232
----------- ----------- -----------
TOTAL CURRENT LIABILITIES 2,859,948 6,015,847 (3,155,898)
LOAN FROM PARENT - XXXXXX 2,730,000 2,866,781 (136,781)
INTERCOMPANY - XXXXXX 675,844 454,410 221,434
----------- ----------- -----------
TOTAL LIABILITIES 6,265,792 9,337,038 (3,071,245)
EQUITY:
SHARE CAPITAL 174,340 238,804 (64,464)
CURRENCY TRANSLATION 88,907 - 88,907
OPENING RETAINED EARNINGS (242,991) -
INCOME (97,453) -
----------- ----------- -----------
CLOSING RETAINED EARNINGS (340,444) 1,088,532 (1,428,976)
TOTAL EQUITY (77,197) 1,327,336 (1,404,533)
----------- ----------- -----------
TOTAL LIAB. & EQUITY $ 6,188,596 $10,664,374 $(4,475,778)
----------- ----------- -----------
* budgeted US exchange rate used - 1.5300
Schedule 3.1(F) to Asset Pur K - Balance
WESTBEACH CANADA ULC
CONSOLIDATED INCOME STATEMENT
FOR THE 9 MONTHS ENDING SEPTEMBER 25, 1999
25-Sep-99 25-Sep-99 25-Sep-99
ACTUAL BUDGET VARIANCE
------------ ------------ ------------
NET SALES $ 7,835,285 $ 14,488,672 $ (6,653,387)
COST OF GOODS SOLD 4,749,161 8,916,793 (4,167,631)
------------ ------------ ------------
GROSS PROFIT 3,086,123 5,571,879 (2,485,756)
OPERATING EXPENSES:
ACCOUNTING / ADMIN 515,909 615,383 (99,474)
PRODUCT MANAGEMENT 126,389 165,661 (39,271)
SALES 1,100,072 1,151,152 (51,080)
MARKETING 66,133 134,221 (68,088)
RETAIL 1,158,659 1,096,084 62,575
COMMISSIONS 251,533 713,877 (462,343)
DEPRECIATION 69,241 114,804 (45,563)
US EX. GAIN/LOSS ON CONS (9) (9)
------------ ------------ ------------
TOTAL EXPENSES 3,287,928 3,991,181 (703,253)
------------ ------------ ------------
E.B.I.T (201,804) 1,580,698 (1,782,502)
GAIN/LOSS ON DISPOSAL - - -
MISC EXP/OTHER INCOME (48,380) - (48,380)
GAIN/LOSS ON EXCHANGE (7,202) - (7,202)
BANK & DEBENTURE INTEREST - 16,083 (16,083)
CORPORATE INCOME TAX (48,768) - (48,768)
------------ ------------ ------------
NET INCOME (LOSS) $ (97,453) $ 1,564,615 $ (1,662,068)
------------ ------------ ------------
------------ ------------ ------------
* budgeted US exchange rate used - 1.5300
Schedule 3.1(F) to Asset Pur K - Income
WESTBEACH CANADA ULC
CONSOLIDATED INCOME STATEMENT
FOR THE 9 MONTHS ENDING SEPTEMBER 25, 1999
25-Sep-99 25-Sep-99 25-Sep-99 25-Sep-99 25-Sep-99 25-Sep-99
MONTH MONTH MONTH Y-T-D Y-T-D Y-T-D
ACTUAL BUDGET VARIANCE ACTUAL BUDGET VARIANCE
------------ ------------ ------------ ------------ ------------ ------------
NET SALES $ 1,649,863 $ 3,495,832 $ (1,845,970) $ 7,835,285 $ 14,488,672 $ (6,653,387)
COST OF GOODS SOLD 946,871 2,093,961 (1,147,090) 4,749,161 8,916,793 (4,167,631)
------------ ------------ ------------ ------------ ------------ ------------
GROSS PROFIT 702,991 1,401,871 (698,880) 3,086,123 5,571,879 (2,485,756)
OPERATING EXPENSES:
ACCOUNTING / ADMIN 22,411 74,597 (52,185) 515,909 615,383 (99,474)
PRODUCT MANAGEMENT 37,118 71,238 (34,120) 126,389 165,661 (39,271)
SALES 114,109 107,434 6,675 1,100,072 1,151,152 (51,080)
MARKETING 30,399 73,350 (42,951) 66,133 134,221 (68,088)
RETAIL 118,459 118,072 387 1,158,659 1,096,084 62,575
COMMISSIONS 57,424 192,801 (135,377) 251,533 713,877 (462,343)
DEPRECIATION 7,715 11,416 (3,702) 69,241 114,804 (45,563)
US EX. GAIN/LOSS ON CONS - - - (9) (9)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES 387,635 648,908 (261,273) 3,287,928 3,991,181 (703,253)
------------ ------------ ------------ ------------ ------------ ------------
E.B.I.T 315,356 752,963 (437,607) (201,804) 1,580,698 (1,782,502)
GAIN/LOSS ON DISPOSAL - - - - - -
MISC EXP/OTHER INCOME 771 - 771 (48,380) - (48,380)
GAIN/LOSS ON EXCHANGE 16,399 - 16,399 (7,202) - (7,202)
BANK & DEBENTURE INTEREST - 6,140 (6,140) - 16,083 (16,083)
CORPORATE INCOME TAX - - - (48,768) - (48,768)
------------ ------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 298,186 $ 746,823 $ (448,637) $ (97,453) $ 1,564,615 $ (1,662,068)
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
* budgeted US exchange rate used - 1.5300
Schedule 3.1(F) to Asset Pur K - Month Income
GLOBAL CONSOLIDATED INCOME FORECAST
WESTBEACH ONLY
1999 TO 2000
USD 1999 Totals May-99 Jun-99 Jul-99 Aug-99
Projected Actual to Date Projected Projected Projected
--------- -------------- --------- --------- ---------
Wholesale Revenue 8,658,949 1,405,216 - - 2,055,119
Retail Revenue 4,223,516 1,568,940 163,987 249,150 229,739
------------------------------------------------------------------------
Combined Revenue 12,882,465 2,974,157 163,987 249,150 2,284,858
Cost of goods sold 7,749,840 1,935,120 102,114 161,025 1,368,602
------------------------------------------------------------------------
Gross Profit 5,132,625 1,039,036 61,873 88,125 916,256
Gross Profit Margin 39.8% 34.9% 37.7% 35.4% 40.1%
Commissions 466,585 116,075 - - 126,014
Selling & Distribution Costs 977,863 468,445 64,927 74,834 70,218
Marketing Expense 234,685 - - - 47,941
Product Management Exp 427,647 12,723 - - 46,561
Accounting Expense 572,387 246,399 15,241 22,741 48,756
Retail Operating Expense 1,074,111 394,498 71,574 88,950 77,171
------------------------------------------------------------------------
Total Operating Expense 3,753,277 1,238,140 151,741 186,524 416,661
------------------------------------------------------------------------
EBITDA 1,379,347 (199,104) (89,869) (98,399) 499,594
Interest income (expense) 14,793 - (653) (653) 4,013
Depreciation/amortization 97,418 45,187 7,462 7,462 7,462
Gain on Sale of Assets - -
------------------------------------------------------------------------
Net Income (loss) 1,267,137 (244,291) (96,677) (105,207) 488,119
------------------------------------------------------------------------
------------------------------------------------------------------------
Sep-99 Oct-99 Nov-99 Dec-99
Projected Projected Projected Projected
--------- --------- ---------- ---------
Wholesale Revenue 3,523,613 - - 1,675,000
Retail Revenue 273,954 304,902 476,405 956,438
--------------------------------------------------------
Combined Revenue 3,797,568 304,902 476,405 2,631,438
Cost of goods sold 2,261,108 187,601 288,842 1,445,426
--------------------------------------------------------
Gross Profit 1,536,460 117,301 187,563 1,186,012
Gross Profit Margin 40.5% 38.5% 39.4% 45.1%
Commissions 224,497 - - -
Selling & Distribution Costs 73,963 76,179 82,194 67,101
Marketing Expense 39,785 39,735 38,613 68,613
Product Management Exp 48,991 57,321 127,991 134,061
Accounting Expense 69,074 42,004 61,649 66,524
Retail Operating Expense 84,202 91,352 95,150 171,214
--------------------------------------------------------
Total Operating Expense 540,511 306,590 405,597 507,512
--------------------------------------------------------
EBITDA 995,949 (189,289) (218,034) 678,499
Interest income (expense) 7,805 4,013 455 (187)
Depreciation/amortization 7,462 7,462 7,462 7,462
Gain on Sale of Assets -
--------------------------------------------------------
Net Income (loss) 980,682 (200,764) (225,951) 671,225
--------------------------------------------------------
--------------------------------------------------------
Schedule 3.1(F) to Asset Pur K Covis Budget Income WS
US ASSETS
-------------------------------------------------------------------------------------------------
RATES: 1.326 1.4 1.4 1.36 1.35 1.42 1.55
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Year 1993 1994 1995 1996 1997 1998 1999
-------------------------------------------------------------------------------------------------
Furniture and Equipment 9931 387 1168 1034 0 0 0 12520 16,751.75
Fixed Assets 1535 3146 5758 19652 0 (5506) 0 24585 33,409.21
Depreciation (3893) (411) (2795) (6002) (7084) (3793) (3728) (27706) (38,541.10)
Leaseholds 4807 449 2648 0 7436 697 16037 22,243.43
Amortization (2091) (125) (1228) (1370) 827 (2190) (6177) (8,687.41)
10289 3122 4455 16104 (8454) (1036) (5221) 19259 25,175.88
SCHEDULE 3.1(g)
OTHER LIABILITIES
Nil.
SCHEDULE 3.1(i)
ENCUMBRANCES
Secured Party: Wyndcrest Partners, Ltd.
Collateral Description: All of the debtor's inventory, and all
proceeds that are goods, intangibles,
securities, documents of title, chattel
paper, instruments or money (and terms used
herein that are defined in the Personal
Property Security Act of British Columbia
have those defined meanings)
Registration No.: 8555389
Control No.: B3399043
Registration Date: November 9, 1999
Expiry Date: November 9, 2000
SCHEDULE 3.1(j)
EQUIPMENT
Schedule separately provided.
SCHEDULE 3.1(k)
CONDITIONAL SALES CONTRACTS,
TITLE RETENTION DOCUMENTS AND LICENCES
1. TELECOMMUNICATIONS EQUIPMENT
Secured Party: Telecom Leasing Canada (TLC) Limited
Collateral Description: Telecommunications equipment lease #407938
Registration No.: 7811411
Control No.: B2858079
Registration Date: August 11, 1998
Expiry Date: August 11, 2002
Secured Party: Telecom Leasing Canada (TLC) Limited
Collateral Description: Telecommunications equipment lease #408057
Registration No.: 7866033
Control No.: B2896190
Registration Date: September 14, 1998
Expiry Date: September 14, 2004
2. SECURITY SYSTEM
The security systems for the Vancouver Store and Whistler Store are owned
by a third party.
SCHEDULE 3.1(l)
LEASES
Leases separately provided.
SCHEDULE 3.1(n)
EMPLOYEES
RETAIL: WHOLESALE:
NAME TITLE NAME POSITION
Xxxx Xxxxxxxx Manager Xxxxx Xxxxxx Production/Logistics
Xxxx Suzuki Purchaser Xxxxx Xxxxxxxxx Accounting Mgr
Xxxxxxxx Xxxxxx Accountant Xxxxx Xxxxxx VP Sales
Xxxx XxXxxxx Office Assistant Xxxxx Xxxxxxxxx Mkg Mgr
Xxxxx Xxxxxxxxx Store Clerk Xxxxxx Xxxxxxxx Cdn Cust Service
Xxxx Page Store Supervisor Xxxxx Xxxxxx Accounting Clerk
Xxx XxxXxxxx Store Supervisor Xxxxxxxxx Xxxxxxxx Clerk Receptionist
Xxxx Xxxxxx Asst Shipper/Receiver Xxxxxx Xxxxxx Warehouse Mgr
Xxx Xxxxxx Store Clerk Xxxxx Xxxxxxx Shipper/Receiver
Xxxxxxx Xxxxxx Store Clerk Xxxxxx Xxxx Warehouse Asst
Xxxxxxx Xxxxxxx Store Clerk Xxxxxx Xxxx Warehouse Asst
Xxxxxxx Xxxxxx Store Clerk Xxxxx XxxXxxxxx Euro Sales/Mkg Mgr
Xxxxxxx Xxxxxxx Store Clerk Xxxx Andru Euro Acct / Credit Mgr
Xxx Xxxxxx Store Clerk Sophie Roswahl Euro Cust Service
Xxxx Xxxxxxxxx Store Clerk Xxxxx Xxxxxxxx Clerk Receptionist
Xxxxxx Xxxxx Store Clerk
Xxxxx Xxxxxx Shipper/Receiver
Xxxx Xxxxx Store Clerk
Shuichi Nagase Store Clerk
Xxxxx Xxxx Store Clerk
Katie Uyede Store Clerk
Xxxx Xxxxxxx Store Clerk
Xxxxx Xxxxxxxxxxx Store Clerk
Xxxxxxx Xxxx Store Clerk
Xxxxx XxXxxxx Store Clerk
Xxxx Xxxxxxxx Manager
Xxxx Xxxxxxxx Store Clerk
Xxxx Xxxxxx Store Clerk
Xxxxxxx Xxxxxxx Store Clerk
Xxxxx Xxxxxxxxxxx Store Clerk
Xxx Xxxxxxx Store Clerk
Xxxx Xxxxxx Store Clerk
Xxxx Xxxx Store Clerk
Xxxxxx Xxxxx Store Clerk
SCHEDULE 3.1(r)
LITIGATION
1. XXXXXXX XXXXXX FASHION AGENCY, INC.
Company: Xxxxxx Snowboards Inc.
Role: Defendant
Plaintiff: Xxxxxxx Xxxxxx Fashion Agency, Inc.
Solicitors: X.X. Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxx (for plaintiff)
Xxxxx X. Xxxxxx, Xxxxxxx & XxXxxxxx (for defendant)
Court: Vancouver Supreme
Registry No.: #C981832
Nature of Claim: Plaintiff seeking damages for breach of an exclusive
sales contract for Western Canada and alleging
termination thereof without cause.
Defence: Customary to terminate distributorship agreements on
short notice. Plaintiff had actual knowledge of
this customer, and termination was per industry
custom. During term of agreement, defendant's
products not sold through sales representatives
other than the plaintiff. Plaintiff took no steps
to mitigate damages.
Court Documents: Writ of Summons filed April 8, 1998
Statement of Claim filed June 23, 1998
Statement of Defence filed July 22, 1998
Notice of Trial (October 2, 2000) filed April 23,
1999
2. PAMA (H.K.) LTD.
Company: Westbeach Canada ULC
Role: Potential defendant
Potential Plaintiff: Pama (H.K.) Ltd.
Court: No action commenced as yet.
Nature of Claim: Demand for payment of US$91,659.24 for salesman
sample production.
Defence and Company entitled to set-off of US$43,784.16 for
production by
Counterclaim: company owned by related parties. Claim for losses
arising from delays in production and improper
preparation of customs documentation, such that
delivery of sample items arrived after major
showings, causing a marked decline in sales and an
impact on buyer confidence.
Settlement: In principle, a settlement has been reached to
settle all outstanding matters between the parties
in exchange for the payment by Westbeach to Pama of
US$55,500. Further negotiations may ensue as to
amount and payment schedule.
- 39 -
SCHEDULE 3.1(x)
OTHER CONTRACTS, AGREEMENTS AND DOCUMENTS
-------------------------------------------------------------------------------
1. LEVANTE DISTRIBUTION AGREEMENT FOR JAPAN
-------------------------------------------------------------------------------
PARTIES: Westbeach Snowboard Canada Ltd.
Levante, Inc.
-------------------------------------------------------------------------------
EFFECTIVE October 1, 1995
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Westbeach grants exclusive distribution rights to Levante for
TERMS: products bearing Westbeach names and marks in Japan under the
terms and conditions of the agreement.
Copy of agreement available.
-------------------------------------------------------------------------------
2. LABATT PROMOTIONAL RIGHTS AGREEMENT
-------------------------------------------------------------------------------
PARTIES: Labatt Brewing Company Limited
Xxxxxx Westbeach Canada Inc.
-------------------------------------------------------------------------------
EFFECTIVE October 31, 1997
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Westbeach grants Labatt the right to produce the Westbeach
TERMS: Classic snowboard event and the right to use the names and
trademarks associated with "Westbeach Classic" during the term
of the agreement.
Copy of agreement available.
-------------------------------------------------------------------------------
3. XXXXX XXXXXX RIDER CONTRACT
-------------------------------------------------------------------------------
PARTIES: Xxxxxx Snowboards, Inc.
Xxxxx Xxxxxx
-------------------------------------------------------------------------------
EFFECTIVE April 1, 1999
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Xxxxxx agrees to ride exclusively as a Pro Rider for Xxxxxx
TERMS: products and assist Xxxxxx in promoting, evaluating and
designing its products and those of its competitors and
establishing Xxxxxx'x international marketing system, during
the term of the agreement.
Copy of agreement available.
-------------------------------------------------------------------------------
4. XXXX XXXXXXX RIDER CONTRACT
-------------------------------------------------------------------------------
PARTIES: Xxxxxx Snowboards, Inc.
Xxxx Xxxxxxx
-------------------------------------------------------------------------------
SUMMARY OF Xxxxxxx agrees to ride exclusively as a Pro Rider for Xxxxxx
TERMS: products and assist Xxxxxx in promoting, evaluating and
designing its products and those of its competitors and
establishing Xxxxxx'x international marketing system, during
the term of the agreement.
No copy of agreement available.
-------------------------------------------------------------------------------
5. XXXXXX TRADING LTD. LETTER AGREEMENT (SEPTEMBER 9, 1999)
-------------------------------------------------------------------------------
- 41 -
-------------------------------------------------------------------------------
PARTIES: Xxxxxx Trading Ltd. (Xxxxxx Xxxxx)
Westbeach Canada Inc.
-------------------------------------------------------------------------------
EFFECTIVE August 15, 1999
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Xxxxxx agrees to provide management services to Westbeach
TERMS: including management of new product design, development, and
manufacturing.
Copy of agreement available.
-------------------------------------------------------------------------------
6. XXXXXX TRADING LTD. LETTER AGREEMENT (AUGUST 31, 1998)
-------------------------------------------------------------------------------
PARTIES: Xxxxxx Trading Ltd. (Xxxxxx Xxxxx)
Xxxxxx Snowboards, Inc.
-------------------------------------------------------------------------------
EFFECTIVE June 1, 1998
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Xxxxxx agrees to manage the Apparel Team and participate in
TERMS: the Xxxxxx senior management team. Xxxxxx agrees to report to
Xxxxx Xxxxxx, President of Xxxxxx.
-------------------------------------------------------------------------------
7. FILMAR SKI CORPORATION LETTER AGREEMENT
-------------------------------------------------------------------------------
PARTIES: Westbeach Snowboard USA Inc.
Xxxxxx Westbeach Canada Inc.
Filmar Ski Corporation
-------------------------------------------------------------------------------
EFFECTIVE September 23, 1999
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Westbeach and Xxxxxx agree to assign to Filmar Ski Corporation
TERMS: the right to ship and invoice Westbeach and Morrow USA and
Canadian customers directly, for shipments of certain styles
of sweaters and knit beanies.
Copy of agreement available.
-------------------------------------------------------------------------------
8. XXXX XXXXXX CONSULTING CONTRACT
-------------------------------------------------------------------------------
PARTIES: Xxxx Xxxxxx
Westbeach Snowboard Canada Inc.
-------------------------------------------------------------------------------
EFFECTIVE Effective through to the end of 2000 Westbeach Classic
DATE:
-------------------------------------------------------------------------------
SUMMARY OF Xxxxxx will advise on snowboard fashion and consult for the
TERMS: Westbeach Classic. Westbeach will pay Xxxxxx $2,500 per
month.
Verbal agreement.
-------------------------------------------------------------------------------
