United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(g) of the Securities Exchange Act of 1934
AR Associates, Inc.
(Name of Small Business Issuer in Its Charter)
Nevada 88-0283060
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
617 Cherry Street, Suite 206, Sumas, WA 98295
(Address of Principal Executive Offices) (Zip Code)
(360) 988-6101
(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Exchange Act: None
Securities to be registered under Section 12(g) of the Exchange Act:
Title of Each Class to be so registered: Common Stock ($0.001 Par Value)
Name of Each Exchange on Which Each Class is to be Registered None
<PAGE>
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business...............................................1
Item 2. Management's Discussion and Analysis or Plan of Operation.............5
Item 3. Description of Property...............................................8
Item 4. Security Ownership of Certain Beneficial Owners and Management........8
Item 5. Directors, Executive Officers, Promoters and Control Persons.........10
Item 6. Executive Compensation...............................................11
Item 7. Certain Relationships and Related Transactions.......................12
Item 8. Description of Securities............................................12
PART II
Item 1 Market Price of and Dividends on the Registrants Common
Equity and Other Shareholder Matters.................................13
Item 2. Legal Proceedings....................................................14
Item 3. Changes in and Disagreements with Accountants........................14
Item 4. Recent Sales of Unregistered Securities..............................15
Item 5. Indemnification of Directors and Officers............................15
PART F/S
Financial Statements.................................................15
PART III
Item 1. Index to Exhibits....................................................17
<PAGE>
PART I
Item 1. Description of Business
Business Development
AR Associates, Inc. (the "Company"), was incorporated in Nevada on May 1, 1992,
to develop television pilots to be sold to studios, networks or other
appropriate entities for the purpose of being picked up to be made into a
television series. This business plan was never implemented and the original
incorporators, Raymond Girard and Gary Vesperman, abandoned their attempt to
develop the Company in 1997 when they sold all of their stock in the Company to
George Munson and Wayne Lowes. Munson and Lowes did not actively become involved
in the Company until its negotiations with Ultra Clear.
The Company's current operations surrounding the manufacture and distribution of
windshield washer fluid and washer fluid dispensers are conducted through two
entities. Ultra Clear Manufacturing and Distribution Ltd., is located in
Vancouver, British Columbia, Canada ("Ultra Clear"), and is a wholly owned
subsidiary. The subsidiary Ultra Clear was incorporated under the name of
Crystal Green Resources, Inc. ("Crystal Green") in the province of British
Columbia, Canada on April 28, 1992. On July 5, 1994, Crystal Green changed its
name to Ultra Clear.
La Compagnie Ultra Clair Inc., is headquartered in Montreal, Quebec, Canada
("Ultra Clair"), and is related to AR through Ultra Clear's ownership of more
than 95% of its outstanding equity. Ultra Clair was incorporated in Quebec,
Canada on July 29, 1991.
Acquisition of Subsidiaries
Ultra Clear
AR Associates acquired 100% of the outstanding securities of Ultra Clear on
March 30, 1999, pursuant to the Stock Exchange Agreement and Plan of Acquisition
("Exchange Agreement"), which is attached hereto as Exhibit 2 and incorporated
herein by reference. Each share of Ultra Clear was exchanged for ten (10) shares
of AR Associate's common stock, par value $0.001 ("Common Stock"). As Ultra
Clear had 5,644,546 shares of common stock outstanding, the Company issued a
total of 56,445,460 shares of Common Stock to the thirty-nine (39) record
shareholders of Ultra Clear. The Articles of Exchange were filed with the
Secretary of State of Nevada on March 30, 1999.
While the Company bought and currently owns all of Ultra Clear's outstanding
equity, in 1997 Ultra Clear sold six (6) debentures for a total face value of
CA$347,500 bearing 10% per annum, which are still outstanding and are
convertible into Ultra Clear's common stock. If fully converted, the Debenture
holders will be issued shares of Ultra Clear's common stock equaling
approximately 22% ownership. For more information on the Ultra Clear debentures,
see Part I, Item 8, Description of Securities.
Ultra Clair
On May 12, 1992, Ultra Clear, f/k/a Crystal Green, acquired franchises and
licenses to operate as a vendor and distributor of Ultra Clair's products in
British Columbia, Alberta, Manitoba and Saskatchewan pursuant to a Licensing
Agreement, which is attached hereto as Exhibit 10(i)(b) and incorporated herein
by reference, Ultra Clear paid Ultra Clair a deposit in the amount of $17,500
and agreed to make monthly payments in the amount of $1,895.83 commencing June
1, 1992 and continuing through and including May 1, 1994. Ultra Clair agreed to
receive a royalty of $3.50 per windshield washer dispensing unit per month.
Ultra Clear purchased Ultra Clair's outstanding equity in a series of purchase
transactions over approximately five (5) years for a total purchase price of
$151,118.
<PAGE>
Business of Issuer
The business involves the sale and distribution of bulk window washer fluid to
commercial fleet operators and retail clients employing the Ultra Clear fluid
dispensers and bulk containers. The Ultra Clear windshield washer system
involves washer fluid produced by Ultra Clear which is pump-dispensed through a
nozzle containing a dispensing trigger and connected to a jug dispenser,
containing up to 480 liters, or approximately 128 U.S. gallons, via hoses as
long as 25 feet in length.
Ultra Clear has established operations in major cities in British Columbia,
Alberta and Quebec. Mixing plants have been established in Calgary, Edmonton,
Abbotsford and Montreal as a means of producing washer fluid to supply bulk
dispensers located throughout each community. These plants are currently
producing and shipping in excess of 4,000,000 liters per year to over 860 sites.
Description of Products
The Company formulates and produces windshield washer fluid, provides bulk
dispensers to commercial and retail customers, and provides an ongoing fill-up
and dispenser maintenance service. The Ultra Clear system dispenses directly
into a vehicle's washer fluid reservoir and therefore avoids plastic containers
and packaging materials associated with pallets of bottled liquids.
Windshield Washer Fluid
The washer fluid is formulated at mixing plants located in each market area. The
fluid is a blended solution of water, surfactant and methanol, specifically
designed to operate without freezing. The mixing specifications are altered in
September and April due to seasonal temperature variations. The standard winter
mix is designed to resist freezing to -45C. During the summer months the level
of methanol is reduced and a bug removing formulation is added. At all times,
the solutions are evaluated and closely monitored by the Company's employee
delivery driver who mixes the product. Surfactant and methanol are widely
available throughout the United States and Canada.
The Dispenser
Dispensing is accomplished through stand alone pumps. Generally, retail clients
utilize our plastic "Jug" dispenser which can contain up to 480 liters, or
approximately 128 U.S. gallons. These dispensers cost $630 to manufacture in a
production run of 100 units and are leased for $140 - $210 per year, depending
on volume. Commercial clients generally utilize larger volume, stand alone
containers which can hold between 500 - 2,000 liters. These containers cost $470
to manufacture and are provided to larger volume customers at no cost. Every
unit comes fully equipped with a 12-volt battery driven pump system, battery
recharging system, filling hose, and nozzle.
All units are regularly refilled by Ultra Clear and are virtually maintenance
free. The incidence of maintenance is every 15-18 months. The operational life
of each unit is expected to be approximately 10 years. Any malfunctioning or
damage sustained to a unit is easily repaired with a minimum of service
interruption.
<PAGE>
Product Distribution
The two features of Ultra Clear's windshield washer dispensing system are
distributed separately to the Company's customers, the liquid product is
distributed by single axle tanker trucks to customer locations, while the
dispenser units are distributed by vans or pick-up trucks to customer locations.
Operations in the cities of Montreal, Calgary, Edmonton, and Vancouver allow the
Company to service in excess of 1,000 customers.
Industry
Ultra Clear's products are sold to commercial and retail customers. Commercial
clients consist of fleet operators with high-volume needs, such as taxi
companies, truck operators, bus lines, rent-a-car fleets, public transit,
government agencies, etc. These users have installed the Ultra Clear system for
the exclusive use of their vehicle operators. Retail customers are those
companies who previously may have sold bottled washer fluid in 4 liter
containers. The majority of customers in this category are; gas stations, car
washes, oil change centers, etc.
Commercial customers are targeted because the Company believes its dispensing
system allows fleet managers to maintain their vehicle washer fluid levels more
efficiently and economically. The retailers are targeted because the Ultra Clear
system offers a more efficient means of selling the fluid in bulk which will
result in increased profit margins, and added convenience for their end user
customers.
Competition
Ultra Clear does not face any direct competition to its dispensing system. The
closest form of competition are several large chemical companies which provide
45 gallon drums of premixed fluid to commercial and industrial users. The
Company believes its only other competition is purveyors of 4 liter containers.
The largest supplier of washer fluid in Canada is Recochem Canada, a supplier of
bulk fluid and 4 liter containers. Most washer fluid is marketed under
individual brand names to gasoline companies and large retail stores, such as
WalMart and Canadian Tire.
The Company believes the Ultra Clear systems possess competitive advantages in
areas of in inventory control, handling, price and storage. Ultra Clear systems
allow customers to purchase only what is required to fill up the vehicle's
reservoir because of the pump dispenser and it eliminates the environmental
problems stemming from disposal of 4 liter containers.
Low overhead and operating costs are consistently sought by Ultra Clear as each
of Ultra Clear's plant locations are maintained by two employees, including
plant operation, product distribution, and sales. The Company is aware of
virtually no competition to its bulk pump-dispenser units. Most automotive
service shops, including government agencies, rental car agencies and auto
dealership service centers, have used the standard four-liter bottles to service
their automotive fleets. Ultra Clear's bulk distribution system is believed to
avoid the logistical problems of maintaining inventory and disposing of vast
quantities of four-liter containers.
The current selling price is $.25 per liter for winter fluid and $.18 per liter
for summer fluid. In summer months, the methanol content is reduced
dramatically, however the gross profit remains fairly consistent at $.17 per
liter as the only ingredients in the summer fluid are water, detergent, and a
very small amount of methanol. In comparison, the price for washer fluid
purchased in plastic 4 liter container, regardless of the time of year, varies
between $1.40 and $2.45 per container, or $0.35 to $0.61 per liter.
Market Size and Share
Ultra Clear has established operations in British Columbia, Alberta and Quebec.
In the next 12 months, in addition to increasing the market penetration of
existing operations, it hopes to expand its operations into Saskatchewan,
Manitoba, and Ontario, with a goal to achieve national representation within the
next 60 months. In the event sales volumes increase in each existing and
targeted site, marketing will be expanded to include cities and towns of smaller
populations.
<PAGE>
Existing penetration is approximately 7% of total estimated fluid volume
requirements in the cities presently serviced. Commercial clients presently make
up 60% of the annual fluid volume sales and this percentage is projected to
remain constant through expansion growth. While average volumes vary from site
to site, the average consumption, for both commercial and retail, is 4,500
liters per year per dispenser.
The Company estimates that the current washer fluid consumption in Canada is 600
million liters annually. Based on current penetration and expansion activities,
including increased marketing, Ultra Clear hopes to obtain annual Canadian sales
of 55 million liters within 60 months, which represents less than 10% of the
estimated market and at the Company's current pricing equated to potential gross
annual sales of $11 million.
Ultra Clear's bulk distribution has begun serving retail customers where the
self-marketing bulk container sits directly on the islands of gas stations for
easy fill-up service to the consumer. This market can host the most significant
growth when the dispenser units are adapted with meters and possible
coin-operated equipment to service the untapped self-serve facilities across the
country.
This business approach can be adopted on a global basis. In addition, with such
a large existing clientele and distribution network in place, the Company may
seek other products that can be included in the delivery schedule, such as
antifreeze and motor oil, although no such plans have been adopted or sought at
this point.
The Company estimates that the current washer fluid consumption in the United
States is 7 times that of Canada, or 4.2 billion liters annually. The Company
hopes to expand into this market, specifically the Northeastern United States,
although it currently does not possess the capital required for such expansion.
A total of approximately $1.5 million has been estimated to be required for such
expansion with such funds to be sought by independent investors, in either
public or private securities transactions. The Company has no firm commitments
to obtain any funds, may never obtain such funds and therefore may never expand
as desired.
Intellectual Property
The Company's operations surround the development, production and sales of
windshield washer fluid and dispenser systems trademarked under the name of
Ultra Clear and Ultra Clair. The trademark "Ultra Clear" was registered March
12, 1996 and March 19, 1996 with the United States Patent and Trademark Office
under registration numbers 1,961,237 and 1,962,603 respectively. The trademark
registration certificates are attached hereto as Exhibit 10(i)(b)(2) and
10(i)(b)(3) and incorporated herein by reference. The trademark "Ultra Clair"
was registered March 12, 1996 with the United States Patent and Trademark Office
under registration number 1,961,236. The trademark registration certificate is
attached hereto as Exhibit 10(i)(b)(1) and incorporated herein by reference.
Product Development
In the last two (2) years, the Company has spent less than$7,000 on research and
development, partially because the Company believes the fluid and dispenser
currently possess competitive advantages over other washer fluid producers.
However, to ensure continued improvement of the Ultra Clear system, and
acceptance by the marketplace, a number of product modifications and promotional
activities are expected to be undertaken in the event the Company is successful
in securing capital financing, including:
<PAGE>
* Design of a flow meter which conforms to Canada and U.S. standards.
* A coin operated dispenser-provided as an option.
* Formulation of an anti-icing formula to be added to washer fluid allowing a
driver to clear windshield without the need for hand scraping.
Regulatory Overview
Finished fluid product delivery is not regulated by any regulatory entity. The
transportation of raw methanol in Canada is subject to "Transportation of
Dangerous Goods" regulation. Compliance with this regulation, while not costly
nor onerous, is consistently maintained by the Company. The Company experiences
a nominal effect from the "Weights and Measures" regulation in compliance on
their metering equipment. Finally, the Company is subject to compliance with
training for "WHMIS," which stands for Workplace Hazardous Material Information
Systems, which is Canadian legislation administered provincially via the Workers
Compensation Board. It deals specifically with the labeling, handling and
transporting of chemicals. All employees in direct contact with the product are
required to complete a certified course. In the United States this is known as
the "Employee Right to Know" regulation. Environmental regulations under
Canadian law apply to the storage of raw methanol. Currently all of the
Company's facilities are in compliance with such storage regulations.
Employees
The Company has two (2) full time employees and one (1) part time employee in
Abbotsford, British Columbia; one (1) full time employee in Calgary, Alberta;
one (1) full time employee in Edmonton, Alberta; and, four (4) full time
employees and two (2) part time employees in Montreal, Quebec. Hereafter, the
phrase "the Company" will refer to AR Associates, Inc., a Nevada corporation and
its subsidiaries and predecessors.
Advertising and Promotion
The convenience and ready access of the Ultra Clear system has become the
greatest promotional tool for selling washer fluid and for attracting and
maintaining customers. With the objective of developing consumer acceptance and
product recognition, Ultra Clear promotes the name and trademarks through local
advertising. However, the main and proven method of advertising will be through
visible installations on the sites of commercial and retail operations.
Item 2. Management's Discussion and Analysis or Plan of Operation
From inception through the March 30, 1999, AR Associates, Inc. (the "Company")
had not engaged in active operations and was considered a development stage
company. On March 30, 1999, the Company acquired Ultra Clear Manufacturing &
Distribution, Ltd., a Canadian corporation based in British Columbia, Canada.
For more details on this acquisition, see Part I, Item I, Description of
Business.
Ultra Clear's operations in the windshield washer fluid industry now constitute
the basis of the Company's operations. Ultra Clear is currently operating at a
net loss. Some of the reasons Ultra Clear believe have contributed to such
performance are market share/fluid volumes in the Western Region which have been
static with improvement in recorded losses attributable to price retention and
more effective cost control measures. The Eastern Region market share/fluid
sales volumes have declined with decreased profitability attributable to
declined revenues due to price reduction and increased administrative costs in
comparison to revenue reductions.
<PAGE>
Management believes the future viability of the Ultra Clear is tied directly to
increasing fluid sales. Although the Company believes its products are very
competitively priced, product pricing is sensitive and present pricing in both
Western and Eastern Regions is considered competitive. Additional capital is
required to invest in the expansion of a sales force, (at present Ultra Clear
primarily delivers to existing clients without seeking new clients) new markets,
and expansion of existing markets.
Funding is sought to facilitate capital improvements to both existing and new
markets, provide an operating inventory of fluid and dispensers to support the
sales force, and working capital to support short term growth. Management
believes the product has been received positively given growing concerns over
the environment as a product/system replaces plastic containers filling
landfills. Increased volumes will attract increased profits as many costs of
doing business remain static.
The Company believes it can increase its profitability by increasing its sales
and marketing expenditures beyond currently available levels. Although Ultra
Clear's current sales force is successful in its efforts, its industry commands
low profit margins which require high volume to attain profitability. Therefore,
the Company intends to attempt to seek independent financing to allow it to
increase its sales and marketing efforts which it believes will result in
increased sales volume and hence, an improvement in profitability. The expansion
plans including implementing its marketing program and purchasing capital
equipment for production and distribution are estimated to require $1,400,000
and general working capital to implement. However, the Company has not located a
source for financing and no assurance can be given that the Company will be able
to raise any funds to facilitate its plans for expansion and capital
improvement. Additionally, no assurance can be given that even if the Company is
successful in obtaining such funding, that the Company's revenues or
profitability will increase as a result of such expenditures.
Results of Operations of AR Associates, Inc.
From inception through the March 30, 1999, the Company had not engaged in active
operations and was considered a development stage company. The Company's primary
goal was to seek a business combination with a viable business entity. On March
30, 1999, the Company acquired Ultra Clear and therefore became involved in the
windshield washer fluid industry. Since the Company itself has had no meaningful
operations the following financial discussion and comparisons will reflect
drastic changes between the Company's previous dormant fiscal years and the most
recent fiscal year now that Ultra Clear's operations have been included in the
Company's recent financial statements. The following should be read in
conjunction audited financial statements attached hereto and incorporated herein
by reference.
This is the first six (6) month time period during which AR Associates
experienced active operations. Gross revenue, or total sales, for the period was
$172,626, an increase of 100% from revenue for the six (6) month period ending
June 30, 1998. Administrative costs totaled $164,253, representing an increase
of approximately $161,753 from the six (6) month period ending June 30, 1998.
For the six (6) month period ending June 30, 1999, the Company experienced a net
loss of $50,689, representing an increase of $48,189 over the loss recorded
during the same period of 1998. A net loss per share, basic and fully diluted,
of $0.008 representing an increase of 0.007 over the loss recorded during the
six (6) month period ending June 30, 1998.
For the year ended December 31, 1998, the Company had no gross revenue and
general administrative expenses totaling $2,500, representing a decrease of
approximately $5,018 from costs for the year ending December 31, 1997. The
decrease is primarily attributable to office expenses incurred during the first
six months in 1997, which were not incurred during the same period of 1998. For
the year ended 1998, the Company realized a net loss of $2,500, which also
represents an improvement from the $5,018 net loss recorded for the year ending
December 31, 1997. The net loss per share for fiscal 1998, basic and fully
diluted, of 0.001 represented a decrease of $0.0007 over the loss realized for
fiscal 1997. The increase is additionally attributable to the fact that there
were no active operations during that time period.
<PAGE>
For the year ended December 31, 1997, the Company had no operations and
consequently realized no revenue whatsoever. Administrative costs totaled
$7,518, including $5,018 for office expenses and $2,500 for accounting and legal
expenses. A net operating loss of $7,518 was therefore realized, resulting in a
net loss per share, basic and fully diluted, of $0.002.
Liquidity
Management has invested to establish the distribution structure and the market
demand for the Ultra Clear's products and services. The majority of expenditures
have been expensed, and management has been able to fund these expenditures
through related party loans and private placement share capital. See Part I,
Item 7, Certain Relationships and Related Transactions for more information on
such transactions. Operationally, Ultra Clear faces seasonal liquidity
pressures. These arise as a demand for fluid and dispensers increase
dramatically in the fall. Accordingly, in late summer/early fall, Ultra Clear
must purchase sufficient fluid and dispensers to meet the demand. Revenue from
fluid sales is received evenly from late fall to early spring. As all fluid
materials and dispensers are readily available, no commitments for large volume
orders need be made.
Year 2000 Issues
The Company is aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The "Year 2000" problem
is concerned with whether computer systems will properly recognize date
sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail. The Year 2000 problem is pervasive and complex as virtually
every company's computer operation may be affected in some way.
The Company believes that the Year 2000 problem will not pose material
operational problems for the Company's existing computer hardware and software.
To the Company's knowledge, after investigation, no "imbedded technology" (such
as microchips in an electronic control system) of the Company's equipment poses
a material Year 2000 problem.
It is possible, however, that Year 2000 problems incurred by the clients of the
Company could have a negative impact on future operations and financial
performance of the Company, although the Company has not specifically identified
any such problems among its clients or suppliers. Furthermore, the Year 2000
problem may impact other entities with which the Company transacts business and
the Company cannot predict the effect of the Year 2000 problem on such entities
or the resulting effect on the Company. The Company does not plan to have a
contingency plan to operate in the event that any non-compliant client or
supplier systems that materially impact the Company are not remedied by January
1, 2000. As a result, if preventative and/or corrective actions by the Company
or those entities with which the Company does business are not made in a timely
manner, the Year 2000 issue could have a material adverse effect on the
Company's business, financial condition and results of operations.
Because the Company believes that it has no material internal Year 2000
problems, the Company has not expended and does not expect to expend a
significant amount of funds to address Year 2000 issues. It is Company policy to
continue to review its suppliers' Year 2000 compliance and require assurance of
Year 2000 compliance from new suppliers; however, such monitoring does not
involve a significant cost to the Company.
<PAGE>
Item 3. Description of Property
The Company leases all of its facilities and none of its leases individually
amount to less than 10% of the total assets of the Company. Therefore, the
Company's property consists of personal property and equipment, including, for
example, machinery, equipment, vehicles, leasehold improvements, licenses and
franchises. For more information on the Company's personal property and
equipment, see the financial statements attached hereto in Part F/S.
Leased Facilities
The operation in Calgary is located at 150 Eastlake Boulevard, Alrdrie, Alberta
and is leased by Ultra Clear from Supply-Rite Rentals, Ltd. pursuant to a lease
agreement executed July 1, 1998. The term of the lease is July 1, 1998 to July
1, 2001, and the basic monthly rent is $1,022.00 during the first year of the
Term and an amount equal to 105% of the previous monthly payment for each
successive year of the Term. The plant was upgraded in 1996, the equipment is
owned and is well maintained.
The operation in Edmonton, located at 15023-118th Avenue, Edmonton, Alberta, is
leased by Ultra Clear from Anvilhammer Management Ltd. An Absolute Net Interim
Lease executed December 1, 1993. The term of the lease is month to month at a
rate of $560.00 per month. The plant is in adequate condition and the equipment
is owned with minor maintenance required.
The Abbotsford operation is located at 1013 Coutts Way, Abbotsford , B.C. It is
sublet from Summit Sand & Gravel Ltd., an organization whose director, Wayne
Lowes, is also a director of the Company. There is no formal lease document in
place but the Company pays $1,124.00 in monthly rent, which the Company believes
is fair market value. This sublease was entered into on January 15, 1997 and the
terms expire December 31, 1999 with an option for a three (3) year renewal. The
plant is in good condition, the equipment is owned and is well maintained.
The Montreal operation, located at 574 Boulevard Guimond, Longuell, Quebec, is
leased by Ultra Clear from Aurel Borlestear and Natalia Petrescu. This lease was
entered into on April 1, 1999. The plant is in good condition and the equipment
is owned with minor maintenance required.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the stock of the Company as of August 17, 1999, by each shareholder
who is known by the Company to beneficially own more than 5% of the outstanding
Common Stock, by each director and by all executive officers and directors as a
group. The footnotes following the table are relevant for a complete
understanding of the Company's ownership structure.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Title of Class Name and Address of Beneficial Amount and Nature of Percent
Ownership Beneficial Ownership(1) of Class
---------------- -------------------------------- ------------------------- ----------
Common Stock Dan Anderson
5416 McConnell 393,940 6%
Terrace , British Columbia
---------------- -------------------------------- ------------------------- ----------
Common Stock Matt Bone
RR#4 Site 7, Comp 17 393,940 6%
Terrace, British Columbia
---------------- -------------------------------- ------------------------- ----------
Common Stock Kenneth L. Freida
5150 Overland Avenue 311,089 5%
Culver City, CA 90230
---------------- -------------------------------- ------------------------- ----------
Common Stock Bruce Klyne
109-2485 Hilltout St. 393,940 6%
Abbotsford, British Columbia
---------------- -------------------------------- ------------------------- ----------
Common Stock Hal J. Klyne
Barrows, Manitoba 393,940 6%
---------------- -------------------------------- ------------------------- ----------
Common Stock John Newman
11040 Granville Ave. 393,940 6%
Richmond, British Columbia
---------------- -------------------------------- ------------------------- ----------
Common Stock Wayden Transportation
Systems, Inc. 511,114 8%
17824 56th Avenue
Surrey, British Columbia
Executive Officers and Directors
Common Stock Richard Van Diest
P.O. Box 38 0 0%
Sumas, WA 98295
---------------- -------------------------------- ------------------------- ----------
Common Stock Wayne Lowes
17824 56th Avenue 677,810(2) 10.7%
Surrey, British Columbia
---------------- -------------------------------- ------------------------- ----------
Common Stock George Munson
17824 56th Avenue 677,810(3) 10.7%
Surrey, British Columbia
---------------- -------------------------------- ------------------------- ----------
Common Stock Executive Officers and Directors as 844,506(4) 13.3%
a Group
---------------- -------------------------------- ------------------------- ----------
</TABLE>
(1) The number of shares beneficially owned by the entities above is determined
under rules promulgated by the SEC and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has sole or
shared voting power or investment power and also any shares which the individual
has the right to acquire within 60 days through the exercise of any stock option
or other right. The inclusion herein of such shares, however, does not
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of such shares. Unless otherwise indicated, each person or
entity named in the table has sole voting power and investment power (or shares
such power with his or her spouse) with respect to all shares of capital stock
listed as owned by such person or entity.
(2) Wayne Lowes owns 51% of Wayden Transportation Systems, Inc., which owns
511,114 shares of the Company's common stock. As a result of Lowes' ownership of
Wayden, he is deemed to beneficially own Wayden's shares. However, Lowes
disclaims ownership of shares held by Wayden.
<PAGE>
(3) George Munson owns 49% of Wayden Transportation Systems, Inc., which owns
511,114 shares of the Company's common stock. As a result of Munson's ownership
of Wayden, he is deemed to beneficially own Wayden's shares. However, Munson
disclaims ownership of shares held by Wayden. (4) The total share amount listed
as owned by all executive officers and directors as a group includes 166,696
shares owned by George Munson, 166,696 shares owned by Wayne Lowes, and the
511,114 shares owned by Wayden Transportation Systems, Inc. and deemed to be
beneficially owned by both Munson and Lowes.
Item 5. Directors, Executive Officers, Promoters and Control Persons
The Officers and Directors of AR Associates as of August 27, 1999 are as
follows:
Name Age Position
Richard Van Diest 45 President, Director,
Secretary, Treasurer
Wayne Lowes 56 Director
George Munson 60 Director
Richard Van Diest joined Romberg Construction 1972 where he advanced to become a
partner before amicably leaving in 1995 to form Richard Van Diest Construction,
Inc., of which he is president and owner. He has been a Director of the Company,
and its President, Secretary and Treasurer since March 30, 1999. He is the past
President of the Sumas Chamber of Commerce and past Chairman of the
Revitalization Committee of the Sumas Chamber of Commerce.
Wayne Lowes is a founding partner of Ultra Clear as well as President and a
Director. He is a Director of the Company. For the last 15 years, Lowes has been
the President, Director and shareholder of Wayden Transportation Systems Inc., a
private tugboat company operating in British Columbia. His business experience
makes him familiar with the sales environment in automotive-related services and
trucking and distribution networks.
George Munson is a founding partner of Ultra Clear as well as a Director of the
Company. For approximately 35 years, Munson has been President and a shareholder
of Bear Creek Contracting Ltd. of Terrace, British Columbia, one of the largest
logging contractors in northwestern B.C.
On March 17, 1999, holders of a majority of the outstanding Common Stock
approved and accepted the resignations by Joan Appleton, Frank McCabe, Tom
Garrett and Sergije Gostovic, who had been appointed in expectation of a since
failed merger and appointed Rich Van Diest to serve as the Company's sole
Director as well as its President, Secretary and Treasurer until his successors
were appointed.
These resignations were tendered in January 1998.
On March 25, 1999, all members of the board of directors of the Company
appointed Wayne Lowes and Lesley Furnival as Directors of the Company. On April
9, 1999, all members of the board of directors of the Company accepted the
resignation of Lesley Furnival as a director of the Company and appointed George
Munson as her replacement.
There is no management or similar contract for any of the Directors or Officers
of the Company except for Richard Van Diest who by the terms of his employment
contract dated August 26, 1999, receives $150 for every hour he devotes to the
Company's affairs.
<PAGE>
Item 6. Executive Compensation
The following table provides summary information for the years 1999, 1998, 1997
and 1996 concerning cash and noncash compensation paid or accrued by the Company
to or on behalf of the president. No employee of the Company has received
compensation in any year in excess of $100,000. All figures expressed are in
U.S. dollars.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Annual Compensation
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Name and Other Annual
Principal Position Year Salary ($) Bonus ($) Compensation ($)
- --------------------------- -------- -------------- ----------- ------------------
Richard Van Diest, President 1999 $150/hour(1) -0- -0-
- --------------------------- -------- -------------- ----------- ------------------
Frank McCabe 1998-97 - 0- - 0- - 0-
President
- --------------------------- -------- -------------- ----------- ------------------
Anne Moxon, 1997 - 0- - 0- - 0-
President
- --------------------------- -------- -------------- ----------- ------------------
Raymond Girard, 1997-96 - 0- - 0- -0-
President
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------
Long Term Compensation
------------------------------------------------------------
Awards Payouts
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Restricted Stock Securities Underlying LTIP Payouts All Other
Name and Principal Award(s)($) Options/ ($) Compensation
Position Year SARs(#) ($)
- ------------------------ -------- ----------------- --------------------- ------------ -------------
Richard Van Diest, 1999 - 0- - 0- - 0- - 0-
President
- ------------------------ -------- ----------------- --------------------- ------------ -------------
Frank McCabe, 1998-97 - 0- - 0- - 0- - 0-
President
- ------------------------ -------- ----------------- --------------------- ------------ -------------
Anne Moxon, 1997 - 0- - 0- - 0- - 0-
President
- ------------------------ -------- ----------------- --------------------- ------------ -------------
Raymond Girard, 1997-96 - 0- - 0- - 0- - 0-
President
</TABLE>
(1) The Employment Agreement pursuant to which Richard Van Diest is to be
compensated by the Company is incorporated by reference and attached hereto as
Exhibit 10(ii)(a). As of August 26, 1999, Richard Van Diest has received no
compensation from the Company for his services.
The Directors of the Company have no formal compensation agreement with the
Company and will only receive such if the Company becomes able to do so, which
cannot be assured.
Item 7. Certain Relationships and Related Transactions
Wayden Transportation Systems, Inc. ("Wayden") is a large (8%) shareholder of
the Company (see Part I, Item 4 for more information on the beneficial ownership
of Wayden). Wayden is owned 51% by Wayne Lowes and 49% by George Munson, both of
whom are Directors of the Company. Wayden has loaned Ultra Clear a total of
$273,816; $91,000 from an unsecured loan from advanced to Ultra Clear on July 6,
1997, and $182,816 from an unsecured loan advanced to the Company in the form of
numerous advances over a period of several years.
<PAGE>
Brad Aelicks ("Aelicks") is an 8% shareholder in the Company. Aelicks made
unsecured loans totaling $45,850 to Ultra Clear over several years, including:
$350 on February 17, 1995; $24,500 on September 25, 1997; $17,500 on November
11, 1997; and $3,500 on November 11, 1998. These are non-interest bearing loans
without specific terms of repayment.
On June 17, 1992, George Munson and Wayne Lowes each gave Ultra Clear an
unsecured loan in the amount of $9,800. These are non-interest bearing loans
without specific terms of repayment. Both Munson and Lowes are Directors of the
Company and both beneficially own 10.7% of the Company's outstanding common
stock. For more information on such ownership, see Part I, Item 4 Security
Ownership of Certain Beneficial Owners and Management.
Item 8. Description of Securities
Holders of the Company's Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the security holders.
Subject to preferences that may be applicable to any then outstanding Preferred
Stock, holders of Common Stock are entitled to receive ratably such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
other securities. The Common Stock has preemptive rights. There are no
redemption of sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are duly authorized, fully paid and
non-assessable.
Ultra Clear Convertible Debentures.
Ultra Clear has six (6) convertible debentures outstanding with interest
accruing annually at the rate of ten percent (10%). The term of each debenture
is three and one-half (3 1/2) years ending April 30, 2000. The holder has the
option of converting the debenture into shares of Ultra Clear's common stock at
a deemed price of CA$0.30/share at its option. The following holders possess
debentures with corresponding face values, not including interest accrued since
November 1996, totaling CA$347,500.
Debenture Holder Face Amount of Debenture (CA$)
Bradley T. Aelicks $100,000
Bradford Cooke $ 25,000
Stewart Lockwood $ 37,500
Ken Freida $100,000
The Stibor Family Trust $ 25,000
Wayden Transportation Systems, Inc. $ 60,000
If all debentures are converted on their maturity date, April 30, 2000, the
debentures' value would be approximately CA$485,098, which, at the closing
currency exchange rate on August 25, 1999 of CA$1.00 = US$0.67, equals
US$325,016. This monetary amount would be converted into 1,618,826 shares of
Ultra Clear's common stock. As the Company acquired 5,644,546 shares of Ultra
Clear's common stock, or approximately 22% if all debentures were converted, the
Company would experience a dilution of its ownership in Ultra Clear from 100% to
approximately 78%. Ultra Clear's common stock is not convertible into any of the
Company's securities.
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
The Company's Common Stock began trading on the OTC Bulletin Board on October
31, 1997 under the symbol "ARSS." The table set forth below lists the range of
high and low bids of the Company's Common Stock for each quarter subsequent to
the time trading commenced on October 31, 1997 through August 26, 1999. The
prices in the table reflect inter-dealer prices, without retail markup, markdown
or commission and may not represent actual transactions.
Fiscal Year Fiscal Quarter High Bid Price Low Bid Price
- ----------- -------------- -------------- -------------
2000 First $1.50 $0.10
1999 Fourth $4.60 $0.01
Third $0.01 $0.01
Second $0.035 $0.01
First $0.02 $0.02
1998 Fourth $0.05 $0.01
Third $1.07 $0.035
Second $1.40 $0.90
On March 25, 1999, the Company filed a Certificate of Amendment to Articles of
Incorporation with the Nevada Secretary of State which increased the
capitalization of the corporation from 2,000,000 to 100,000,000 shares at $0.001
par value. On March 29, 1999, the Company filed a Certificate of Amendment to
Articles of Incorporation with the Nevada Secretary of State which increased the
capitalization of the corporation to 200,000,000 shares at $0.001 par value.
Reverse Stock Split
On March 29, 1999, all members of the board of directors of the Company approved
and adopted a 1 for 30 reverse stock split of the Common Stock, par value
$0.001. On March 31, 1999, holders of a majority of the outstanding Common Stock
approved and adopted the 1 for 30 reverse stock split of the Common Stock. The
reverse stock split became effective April 12, 1999. Prior to this stock split,
there were 190,445,460 shares of Common Stock issued and outstanding, whereas
after the stock split 6,348,182 shares were outstanding. The Company issued one
full share to any person holding fractional shares as a result of the Reverse
Stock Split. The number of shares authorized for issuance remained at 200
million. For more information on the Company's board of directors and
controlling shareholders, see "Item 5- Directors, Executive Officers, Promoters
and Control Persons" herein.
On October 16, 1995, at a special meeting of the stockholders, a reverse stock
split on the basis of 1 for 1.75 was approved decreasing the outstanding shares
of common stock from 1,400,000 to 800,000 shares outstanding.
<PAGE>
Record Holders
As of August 26, 1999, there were 6,348,182 shares of the Company's Common Stock
issued and outstanding, held by approximately 88 record holders. The holders of
the Common Stock are entitled to one vote for each share held of record on all
matters submitted to a vote of stockholders. Holders of the Common Stock have no
preemptive rights and no right to convert their Common Stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
Common Stock.
Dividends
The Company has not declared any cash dividends since inception and does not
anticipate declaring any cash dividends in the near future. There are no
restrictions that limit the Company's ability to pay dividends, other than those
generally imposed by applicable state law. The future payment of dividends, if
any, on the Common Stock is within the discretion of the board of directors and
will depend on the Company's earnings, capital requirements, financial
condition, and other relevant factors.
Transfer Agent
The Company utilizing Signature Transfer Company, Inc., 14675 Midway Road, Suite
221, Dallas, Texas 75244, as its transfer agent.
Item 2. Legal Proceedings
The Company is not subject to any pending or threatened legal proceedings.
Item 3. Changes in and Disagreements with Accountants
Coopers & Lybrand provided audits to financial statements to the Company on
April 30, 1993, April 30, 1994, April 30, 1995 and July 31, 1995. Unaudited
financial statements for the fiscal years ending July 31, 1996, 1997 and 1998
were provided by Terry Fearn, C.A.
Schwartz Levitsky Feldman L.L.P. ("Schwartz") was retained by the Company to
audit the Company's financial statements for the fiscal years ending December
31, 1997 and December 31, 1998. Schwartz also provided interim financial
statements for the period of August 1, 1998 to March 31, 1999; August 1, 1998 to
April 30, 1999; and audited interim financial statements for the six month
period ending June 30, 1997, 1998 and 1999.
Item 4. Recent Sales of Unregistered Securities
On March 31, 1999, pursuant to Rule 504 under the Securities Act of 1933, 130
million shares of Common Stock were sold to the following 11 entities, each of
whom were issued 11,818,182 shares: Dan Anderson, Ian Munson, Villeneuve Freres
S.A., Bruce Klyne, Ross Holtem, Dean Porter, Matt Bone, Melinda Newman, John
Newman, Rod Benjamin, Hal Klyne. The shares were sold at $0.0076 per share, for
a total purchase price of $988,000, which is payable pursuant to terms of a
Subscription Agreement Addendum Promissory Note, which is attached hereto as
Exhibit 4(ii)(2) and incorporated by reference. Each promissory note was due and
payable in a lump sum on June 29, 1999, and bears interest of 8% over the ninety
day term, for a total repayment obligation to the Company of $1,067,049. The
notes are unsecured. As of September 3, 1999, none of the promissory note
proceeds have been received by the Company, although the Company has received
assurances that such funds are immediately forthcoming.
<PAGE>
On March 30, 1999, AR Associates acquired 100% of the outstanding equity in
Ultra Clear in exchange for 56,445,460 shares of the Company's common stock
pursuant to the Stock Exchange Agreement and Plan of Acquisition. This issuance
was effected pursuant to Section 4(2) of the Securities Act of 1933. For every
outstanding share of Ultra Clear's common stock held by its 39 holders, the
Company issued 10 shares of its Common Stock. As a result of this transaction,
Ultra Clear became a wholly owned subsidiary of the Company.
Item 5. Indemnification of Directors and Officers
The Company's Bylaws and certain sections of Nevada Revised Statutes provide for
indemnification of the Company's officers and directors in certain situations
where they might other personally incur liability, judgments, penalties, fines
and expenses in connection with a proceeding or lawsuit to which they might
become parties because of their position with the Company. To the extent that
indemnification may be related to liability arising under the Securities Act,
the Securities and Exchange Commission takes the position that indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
PART F/S - FINANCIAL STATEMENTS
Unless otherwise indicated, the term "Company" refers to AR Associates, Inc.
Audited balance sheets of Company as of June 30, 1999 and 1998, and the related
audited statements of operations, stockholders' equity and cash flows for the
years ended June 30, 1999 and 1998 and from inception on July 10, 1996 through
June 30, 1997 and 1999 are attached hereto beginning on Page 72 and incorporated
herein by this reference..
PART III - EXHIBITS
Exhibits required to be attached hereto are listed in the Index to Exhibits
beginning on page 17 of this Form 10-SB, which is incorporated herein by
reference.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized. this 3rd day of September 1999.
AR Associates, Inc.
/s/ Rich Van Diest
Rich Van Diest
President, Secretary, Treasurer, Director
/s/ George Munson
George Munson
Director
/s/ Wayne Lowes
Wayne Lowes
Director
<PAGE>
AR ASSOCIATES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1997
(EXPRESSED IN U. S. DOLLARS)
<PAGE>
AR ASSOCIATES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1997
(EXPRESSED IN U.S. DOLLARS)
TABLE OF CONTENTS
Auditors' Report 1
Balance Sheet 2
Statement of Operations and Deficit 3
Notes to Financial Statements 4
<PAGE>
Schwartz Levitsky Feldman LLP
CHARTERED ACCOUNTANTS
TORONTO, MONTREAL, OTTAWA
AUDITORS' REPORT
To the Directors of
AR Associates, Inc.
We have audited the balance sheet of AR Associates, Inc. as at December
31, 1997 and the statements of operations and deficit for the period from
August 1, 1997 to December 31, 1997. These financial statements are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at December
31, 1997 and the results of its operations and for the period from August
1, 1997 to December 31, 1997 in accordance with generally accepted
accounting principles.
/s/Schwartz Levitsky Feldman, LLP
Toronto, Ontario
May 24, 1999 Chartered Accountants
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Balance Sheet
As at December 31, 1997
(Expressed In U.S. Dollars)
December 31, July 31,
1997 1997
<S> <C> <C>
$ $
ASSETS
CURRENT ASSETS
Cash -- 5,018
============ ==========
LIABILITIES
CURRENT LIABILITIES
Account payable 2,500 --
Advances from officers (note 2) 26,933 26,933
------------ ----------
29,433 26,933
------------ ----------
SHAREHOLDERS' DEFICIENCY
CAPITAL STOCK (note 3) 4,000 4,000
ADDITIONAL PAID-IN CAPITAL 56,000 56,000
DEFICIT (89,433) (81,915)
------------ ----------
(29,433) (21,915)
------------ ----------
-- 5,018
============ ==========
The accompanying notes are an integral part of these financial statements.
APPROVED ON BEHALF OF THE BOARD
_______________________________ Director
_______________________________ Director
</TABLE>
<PAGE>
AR ASSOCIATES, INC.
Statement of Operations and Deficit
For the five month period ended December 31, 1997
(Expressed In U.S. Dollars)
For the For the
period from period from
August 1, January 1,
1997 to 1997 to
December 31 July 31
1997 1997
$ $
REVENUE -- --
------------ -------------
EXPENSES
General and administrative 7,518 10,365
------------ -------------
NET LOSS (7,518) (10,365)
Deficit, beginning of period (81,915) (71,550)
------------ -------------
DEFICIT, END OF PERIOD (89,433) (81,915)
------------ -------------
NET LOSS PER SHARE - BASIC AND FULLY DILUTED (0.0019) (0.0026)
------------ -------------
<PAGE>
AR ASSOCIATES, INC.
Notes to Financial Statements
December 31, 1997
(Expressed In U.S. Dollars)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The company has been inactive since 1994. It has not yet determined
its accounting policies.
2. ADVANCES FROM OFFICERS
These advances are non-interest bearing with no specific terms of
repayment.
3. CAPITAL STOCK
During the period, the company's shareholder approved a 5 to 1 stock
split thereby increasing the number of outstanding common shares
issued.
Authorized
25,000,000 of common shares at $0.001 par value
<TABLE>
<S> <C> <C>
Issued
December 31, July 31,
1997 1997
$ -- $ --
4,000,000 Common shares (800,000 in July 31, 1997) 4,000 4,000
=============== ===============
</TABLE>
4. STATEMENT OF CASH FLOWS NOT PROVIDED
No statement of cash flows has been provided since its inclusion
would not provide significant information.
5. COMPARATIVE FIGURE
The company's financial statements as of July 31, 1997 were audited
by a certified public accountant.
6. SUBSEQUENT EVENT
On March 30, 1999, Ultra Clear Manufacturing and Distributing Ltd., a
Canadian corporation based in the province of British Columbia, was
acquired by AR Associates Inc. and became a wholly owned subsidiary
of the company. 4
<PAGE>
AR ASSOCIATES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U. S. DOLLARS)
<PAGE>
AR ASSOCIATES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1998
(EXPRESSED IN U.S. DOLLARS)
TABLE OF CONTENTS
Auditors' Report 1
Balance Sheet 2
Statement of Operations and Deficit 3
Notes to Financial Statements 4
<PAGE>
Schwartz Levitsky Feldman LLP
CHARTERED ACCOUNTANTS
TORONTO, MONTREAL, OTTAWA
AUDITORS' REPORT
To the Directors of
AR Associates, Inc.
We have audited the balance sheet of AR Associates, Inc. as at December
31, 1998 and the statements of operations and deficit for the year then
ended. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at December
31, 1998 and the results of its operations for the year then ended in
accordance with generally accepted accounting principles.
/s/Schwartz Levitsky Feldman LLP
Toronto, Ontario
May 24, 1999 Chartered Accountants
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
<PAGE>
AR ASSOCIATES, INC.
Balance Sheet
As at December 31, 1998
(Expressed In U.S. Dollars)
1998 1997
$ -- $ --
ASSETS -- --
========= =========
LIABILITIES
CURRENT LIABILITIES
Accounts payable 5,000 2,500
Advances from officers (note 2) 26,933 26,933
31,933 29,433
--------- ---------
SHAREHOLDERS' DEFICIENCY
CAPITAL STOCK (note 3) 4,000 4,000
ADDITIONAL PAID-IN CAPITAL 56,000 56,000
DEFICIT (91,933) (89,433)
(31,933) (29,433)
--------- ---------
-- --
========= =========
The accompanying notes are an integral part of these financial statements.
APPROVED ON BEHALF OF THE BOARD
______________________________ Director
______________________________ Director
<PAGE>
AR ASSOCIATES, INC.
Statement of Operations and Deficit
For the year ended December 31, 1998
(Expressed In U.S. Dollars)
For the
period from
August 1,
1997 to
December 31,
1998 1997
$ $
REVENUE -- --
------- -------
EXPENSES
General and administrative 2,500 7,518
------- -------
(2,500) (7,518)
NET LOSS
Deficit, beginning of year (89,433) (81,915)
------- -------
DEFICIT, END OF YEAR (91,933) (89,433)
======= =======
LOSS PER SHARE - BASIC AND FULLY DILUTED (0.0006) (0.0019)
======= =======
<PAGE>
AR ASSOCIATES, INC.
Notes to Financial Statements
December 31, 1998
(Expressed In U.S. Dollars)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The company has been inactive since 1994. It has not yet determined
its accounting policies.
2. ADVANCES FROM OFFICERS
These advances are non-interest bearing with no specific terms of
repayment.
3. CAPITAL STOCK
Authorized
25,000,000 of common shares at US$0.001 par value
<TABLE>
<S> <C> <C>
Issued
1998 1997
$ -- $ --
4,000,000 Common shares 4,000 4,000
====== ======
</TABLE>
4. STATEMENT OF CASH FLOWS NOT PROVIDED
No statement of cash flows has been provided since its inclusion
would not provide significant information.
5. SUBSEQUENT EVENT
On March 30, 1999, Ultra Clear Manufacturing and Distributing Ltd., a
Canadian corporation based in the province of British Columbia, was
acquired by AR Associates Inc. and became a wholly owned subsidiary
of the company.
6. COMPARATIVE FIGURES
Comparative figures on the statement of operations and deficit for
1997 is for five months period ended December 31, 1997 since the
period from January 1, 1997 to July 31, 1997 had been previously
reported on by a certified public accountant.
<PAGE>
AR ASSOCIATES, INC.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
JUNE 30, 1999 and 1998
(Expressed in US Dollars)
<PAGE>
AR ASSOCIATES, INC.
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
JUNE 30, 1999 and 1998
(Expressed in US Dollars)
TABLE OF CONTENTS
Auditors' Report 1
Consolidated Interim Balance Sheets 2
Consolidated Interim Statements of Operations 3
Consolidated Interim Statements Of Shareholders' Deficit 4
Consolidated Interim Statements of Cash Flows 5
Notes to Consolidated Interim Financial Statements 6 - 13
SUPPLEMENTARY SCHEDULE
Consolidated Interim Statements of Cost of Sales 14
<PAGE>
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
TORONTO, MONTREAL, OTTAWA
AUDITORS' REPORT
To the Shareholders of
AR Associates, Inc.
We have audited the consolidated interim balance sheets of AR Associates,
Inc. as at June 30, 1999 and 1998 and the consolidated interim statements
of operations, shareholders' deficit and cash flows for each of the six
month period ended June 30, 1999, 1998 and 1997. These consolidated
interim financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
consolidated interim financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the consolidated interim financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated interim financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.
In our opinion, these consolidated interim financial statements present
fairly, in all material respects, the financial position of the company
as at June 30, 1999 and 1998 and the results of its operations and its
cash flows for each of the six month period ended June 30, 1999, 1998 and
1997 in accordance with generally accepted accounting principles in the
United States.
/s/ Schwartz Levitsky Feldman LLP
Toronto, Ontario
August 5, 1999 Chartered Accountants
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Consolidated Interim Balance Sheets
As at June 30
(Expressed in US Dollars)
1999 1998
<S> <C> <C>
$ -- $ --
ASSETS
CURRENT ASSETS
Cash ................................... 15,575 --
Accounts receivable (note 3) ........... 81,075 --
Inventory (note 4) ..................... 57,498 --
Prepaid expenses ....................... 6,476 --
-------- -------
160,624 --
CAPITAL ASSETS (note 5) .................... 151,346 --
INTANGIBLE ASSETS (note 6) ................. 512,784 --
-------- -------
824,754 --
======== =======
</TABLE>
APPROVED ON BEHALF OF THE BOARD
_______________________________ Director
_______________________________ Director
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Consolidated Interim Balance Sheets
As at June 30
(Expressed in US Dollars)
1999 1998
<S> <C> <C>
$ -- $ --
LIABILITIES
CURRENT LIABILITIES
Accounts payable 239,159 5,000
Current portion of long term debt 15,545 --
Convertible debentures (note 7) 235,593 --
-------- ---------
490,297 5,000
LONG-TERM DEBT (note 8) 6,477 --
ADVANCES FROM OFFICERS (n0te 9) 27,033 26,933
DUE TO RELATED PARTIES (note 10) 407,394 --
-------- ---------
931,201 31,933
-------- ---------
SHAREHOLDERS' DEFICIT
CAPITAL STOCK (note 11) 6,348 4,000
ADDITIONAL PAID IN CAPITAL (note 12) 1,019,057 56,000
STOCK SUBSCRIPTION RECEIVABLE (note 13) (988,000) --
ACCUMULATED OTHER COMPREHENSIVE LOSS (note 14) (1,230) --
DEFICIT (142,622) (91,933)
-------- ---------
(106,447) (31,933)
-------- ---------
824,754 --
======== =========
The accompany notes are an integral part of these consolidated interim financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Consolidated Interim Statements of Operations
For the period from January 1 to June 30
(Expressed in US Dollars)
For the For the For the
six month six month six month
period ended period ended period ended
June 30, June 30, June 30,
1999 1998 1997
<S> <C> <C> <C>
$ $ $
SALES 172,626 -- --
COST OF SALES 59,062 -- --
---------- ---------- ----------
GROSS PROFIT 113,564 -- --
---------- ---------- ----------
EXPENSES
Wages, commissions and benefits 69,010 -- --
Occupancy cost 16,455 -- --
Repairs and maintenance 11,699 -- --
Interest and bank charges 11,387 -- --
Automobile and trucks 10,070 -- --
Office 6,974 -- 5,018
Accounting and legal 6,972 2,500 2,500
Advertising 3,177 -- --
Freight 947 -- --
Travel and entertainment 690 -- --
Loss on disposal of capital assets 141 -- --
Amortization 26,731 -- --
---------- ---------- ----------
164,253 2,500 7,518
---------- ---------- ----------
NET LOSS (50,689) (2,500) (7,518)
========== ========== ==========
NET LOSS PER SHARE - BASIC AND (0.008) (0.001) (0.002)
FULLY DILUTED ========== ========== ==========
WEIGHTED AVERAGE NUMBERS OF SHARES
OUTSTANDING 6,348,227* 4,000,000 4,000,000
========== ========== ==========
* Adjusted for reverse stock split (30:1) on April 9, 1999.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Consolidated Interim Statements of Shareholders' Deficit
For the period from June 30, 1996 to June 30, 1999
(Expressed in US Dollars)
Number of Additional Stock
Common Capital Paid-In Subscription
Shares Stock Capital Receivable
------------ ------- ---------- ------------
<S> <C> <C> <C> <C>
$ $ $ $
Balance as of June 30, 1996 4,000,000 4,000 56,000 --
Net loss for the period July 1, 1996 to
December 31, 1996 -- -- -- --
Net loss for the period January 1, 1997 to
June 30, 1997 -- -- -- --
Balance as of June 30, 1997 4,000,000 4,000 56,000 --
Net loss for the period -- -- -- --
------------ ------- ---------- ------------
Balance as of June 30, 1998 4,000,000 4,000 56,000 --
Issuance of shares to Ultra Clear
shareholders 56,445,460 56,445 -- --
Stock subscription 130,000,000 130,000 858,000 (988,000)
Cost of issuance of stock subscription -- -- (79,040) --
------------ ------- ---------- ------------
Total before reverse stock split 190,445,460 190,445 834,960 (988,000)
============ ======= ========== ============
Total after reverse stock split (30:1) 6,348,227 6,348 1,019,057 (988,000)
Foreign currency translation -- -- -- --
Net loss for the period -- -- -- --
------------ ------- ---------- -----------
Balance as of June 30, 1999 6,348,227 6,348 1,019,057 (988,000)
============ ======= ========== ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Consolidated Interim Statements of Shareholders' Deficit (Continued)
For the period from June 30, 1996 to June 30, 1999
(Expressed in US Dollars)
Accumulated
Other Total
Comprehensive Shareholders'
Loss Deficit Capital
------------ --------- -------------
<S> <C> <C> <C>
$ $ $
Balance as of June 30, 1996 -- (71,550) (11,550)
Net loss for the period July 1, 1996 to
December 31, 1996 -- (10,365) (10,365)
Net loss for the period January 1, 1997 to
June 30, 1997 -- (7,518) (7,518)
------------ --------- -------------
Balance as of June 30, 1997 -- (89,433) (29,433)
Net loss for the period -- (2,500) (2,500)
------------ --------- -------------
Balance as of June 30, 1998 -- (91,933) (31,933)
Issuance of shares to Ultra Clear
shareholders -- -- 56,445
Stock subscription -- -- --
Cost of issuance of stock subscription -- -- (79,040)
------------ --------- -------------
Total before reverse stock split -- (91,933) (54,528)
============ ========= =============
Total after reverse stock split (30:1) -- (91,933) (54,528)
Foreign currency translation (1,230) -- (1,230)
Net loss for the period -- (50,689) (50,689)
------------ --------- -------------
Balance as of June 30, 1999 (1,230) (142,622) (106,447)
============ ========= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Consolidated Interim Statement of Cash Flows
For the period from January 1 to June 30
(Expressed in US Dollars)
For the For the For the
six month six month six month
period ended period ended period ended
June 30, June 30, June 30,
1999 1998 1997
<S> <C> <C> <C>
$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (50,689) (2,500) (10,365)
Adjustments to reconcile net loss to net cash
provided by operating activities
Amortization 26,731 -- --
Loss on disposal of capital assets 141 -- --
Increase in accounts receivable (81,075) -- --
Increase in prepaid expenses (6,476) -- --
Increase in inventory (57,498) -- --
Increase in accounts payable 234,159 2,500 --
--------- ------------- ------------
65,293 -- (10,365)
--------- ------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of intangible assets (527,282) -- --
Acquisition of capital assets (163,720) -- --
--------- ------------- ------------
(691,002) -- --
--------- ------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Acquisition of convertible debentures 235,593 -- --
Acquisition of long term debt 22,022 -- 15,150
Borrowing from officers 100 -- --
Borrowing from related parties 407,394 -- --
Issuance of common shares 2,348 -- --
Additional paid in capital 963,057 -- --
Increase in subscription receivable (988,000) -- --
--------- ------------- ------------
642,514 -- 15,150
--------- ------------- ------------
EFFECT OF FOREIGN CURRENCY EXCHANGE
RATE CHANGES (1,230) -- --
--------- ------------- ------------
NET INCREASE IN CASH 15,575 -- 4,785
Cash, January 1 -- -- 233
--------- ------------- ------------
CASH, END OF PERIOD 15,575 -- 5,018
========= ============= ============
</TABLE>
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) The Company and Basis of Presentation
AR Associates Inc. ("AR") was incorporated in the State of
Nevada, USA on May 1, 1992. The company has been inactive since
1992. On March 26, 1999, there was a private placement for
130,000,000 common shares as described in note 13. On March 30,
1999, AR acquired 100% of Ultra Clear Manufacturing and
Distributing Ltd. ("Ultra Clear"), a Canadian corporation based
in the province of British Columbia. Ultra Clear is a majority
shareholder of Ultra Clair Inc., a Canadian corporation based in
the province of Quebec. Ultra Clear and Ultra Clair specialize
in the manufacture and distribution of bulk windshield washer
fluids, which is delivered directly to vehicle reservoirs via a
dispensing system.
This acquisition was accomplished by the shareholders of Ultra
Clear exchanging all of the 5,644,546 outstanding common shares
in Ultra Clear for 56,445,460 common shares in AR. There were no
preferred shares, warrants and options as of acquisition date.
The acquisition was accounted for by the purchase method of
accounting. The 1999 financial statements present the results of
operation for AR for the six months period ended June 30, 1999
and the results of operations for Ultra Clear and Ultra Clair
for the period from March 31, 1999 to June 30, 1999. All
significant intercompany transactions and accounts have been
eliminated.
The comparative figures reflect the accounts and transactions of
AR.
b) Inventory
Inventory of raw materials is valued at the lower of cost and
replacement cost; inventory of finished goods is valued at the
lower of cost and net realizable value. In each case, cost is
determined on the first-in, first -out method.
c) Capital Assets
Capital assets are recorded at cost and are amortized either on
the declining balance or straight line basis over their
estimated useful lives.
d) Intangible Assets
Licences and franchises are recorded at cost. Goodwill is the
excess of cost over the value of the investment in a subsidiary.
These intangibles are amortized on the straight basis over ten
years.
Management reviews identifiable intangibles for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, and, if
deemed impaired, measurement and recording of an impairment loss
is based on the fair value of the assets.
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
e) Foreign Currency Translation
The translation of the subsidiaries' financial statements from
Canadian dollars("CDN $") into United States dollars is
performed for the convenience of the reader. Balance sheet
accounts are translated using closing exchange rates in effect
at the balance sheet date and income and expense accounts are
translated using an average exchange rate prevailing during each
reporting period. No representation is made that the Canadian
dollar amounts could have been, or could be, converted into
United States dollars at the rates on the respective dates or at
any other rates. Adjustments resulting from the translation are
included in the accumulated comprehensive loss in stockholders'
equity.
f) Use of Estimates
Management of the company has made a number of estimates and
assumptions relating to the reporting assets and liabilities and
the disclosure of contingent assets and liabilities to prepare
these financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
g) Earnings or Loss Per Share
The Company has adopted SFAS No.128, "Earnings Per Share" which
requires that the consolidated financial statements reflect
"basic" and "diluted" earning (loss) per share. Basic earning
(loss) per share is computed by dividing net income (loss) by
the weighted average number of common shares outstanding for the
period. Diluted earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of
common shares outstanding plus common stock equivalents (if
dilutive).
h) Income Taxes
The Company accounts for income taxes under the asset and
liability method as required by SFAS No. 109, Accounting for
Income Taxes. Under the asset and liability method, deferred
income taxes are recognized for the tax consequences of
temporary differences by applying enacted tax rates applicable
to future year to differences between the financial statements
carrying amounts and the tax bases of existing assets and
liabilities. When tax credits are available, they are recognized
as reductions of current year's tax expense.
i) Fair Value of Financial Instruments
The carrying amounts of financial instruments of the Company,
including cash accounts receivable, accounts payable, and
convertible debentures approximate fair value because of their
short maturity. The fair value of advances to and loans from
related parties cannot be readily determined because of the
nature of their terms.
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
2. ACQUISITION
The fair value of the net liabilities of Ultra Clear acquired as
at the date of acquisition are summarized as follows:
Assets $ 336,276
Liabilities 780,736
---------------
Net liabilities 444,460
Purchase Price
Issuance of common shares 56,445
---------------
Excess of purchase price over value of net
assets acquired $ 500,905
===============
The excess of purchase price of Ultra Clear over value of net
assets acquired is included in goodwill and will be amortized
over ten years (see note 6).
3. ACCOUNTS RECEIVABLE
Accounts receivable consist of:
1999 1998
$ -- $ --
Trade receivable 82,798 --
Less: Allowance for doubtful accounts (1,723) --
------- -------
81,075 --
======= =======
4. INVENTORY
1999 1998
$ -- $ --
Raw materials 39,314 --
Finished goods 18,184 --
------- -------
57,498 --
======= =======
<PAGE>
<TABLE>
<CAPTION>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
5. CAPITAL ASSETS
1999 1998
-------------------------------------- -----------
Accumulated
Cost Amortization Net Net
-------- ------------ --------- -----------
<S> <C> <C> <C> <C>
$ $ $ $
Rolling stock 104,671 65,941 38,730 --
Machinery and equipment 241,135 169,820 71,315 --
Machinery and equipment on
consignment 48,512 38,458 10,054 --
Furniture and fixtures 23,603 14,846 8,757 --
Computer equipment 15,499 7,833 7,666 --
Vehicles 89,795 79,229 10,566 --
Leasehold improvements 21,609 17,351 4,258 --
-------- ------------ --------- -----------
544,824 393,478 151,346 --
======== ============ ========= ===========
Amortization for the six months period ended June 30, 1999 amounted to $12,233.
</TABLE>
<TABLE>
<CAPTION>
6. INTANGIBLE ASSETS
1999 1998
-------------------------------------- -----------
Accumulated
Cost Amortization Net Net
-------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Licences and franchises
British Columbia and Alberta 61,017 42,712 18,305 --
Saskatchewan and Manitoba 20,339 14,237 6,102 --
Goodwill 500,905 12,528 488,377 --
-------- ------------ --------- -----------
582,261 69,477 512,784 --
======== ============ ========= ===========
Amortization for the six months period ended June 30, 1999 amounted to $14,498.
</TABLE>
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
7. CONVERTIBLE DEBENTURES
Convertible debentures are secured by certain assets of Ultra
Clear, bearing interest at 10% per annum, maturing on April 30,
2000. At the option of the holders, the debentures are
convertible to Ultra Clear common shares at a deemed price of
$0.20 per share.
<TABLE>
<CAPTION>
8. LONG-TERM DEBT
1999 1998
$ $
<S> <C> <C>
Loan secured by computer equipment, repayable in monthly
blended payments of $145 at 14.63% per annum, maturing in
September 1999 480 --
Loan secured by vehicles, repayable in monthly blended
payments of $1,238 at 12.00% per annum, maturing in October
2000 13,766 --
Bank loan, repayable in monthly payments of $341 plus interest
at prime plus 2.50% per annum, maturing in November 2000 4,386 --
Bank loan secured by term deposit, repayable in monthly
payment of $833 plus interest at prime plus 1.75% per
annum, maturing in October 1999 3,390 --
------- -------
22,022 --
Current portion 15,545 --
------- -------
6,477 --
======= =======
The portion of long-term debt payable in subsequent years is as follows:
2000 15,545 15,166
2001 6,477 6,318
------- -------
22,022 35,101
======= =======
</TABLE>
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
9. ADVANCES FROM OFFICERS
The advances from officers bear no interest, have no specific
terms of repayments and are not expected to be paid prior to May
1, 2001. (The approximate fair value of this liability is
$21,000.)
<TABLE>
<CAPTION>
10. DUE TO RELATED PARTIES
1999 1998
$ $
<S> <C> <C>
Due to related parties consist of the following:
Loan payable, unsecured, bearing interest at the bank's
prime rate plus 1% per annum with no specific terms of
repayment 265,198 --
Loan payable, unsecured, bearing no interest and with no
specific terms of repayment. (The approximate fair value of
this liability is $108,000.) 142,196 --
-------- --------
407,394 --
======== ========
</TABLE>
<TABLE>
<CAPTION>
11. CAPITAL STOCK
Authorized
200,000,000 Common shares at $0.001 par value
1999 1998
No. of shares $ $
<S> <C> <C> <C>
Issued (4,000,000 shares in 1998 ) 2,014,887 2,015 4,000
Subscribed 4,333,340 4,333 --
------------- -------- -------
6,348,227 6,348 4,000
============= ======== =======
The Board of Directors and the holders of a majority of the outstanding common stock of AR approved a 30 to 1 reverse
stock split on March 29, 1999. The stock split was effective on April 9, 1999 following statutory notice requirements.
This split did not affect the common share par value or the number of shares authorized for issuance.
</TABLE>
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
12. ADDITIONAL PAID-IN CAPITAL
Additional paid-in capital represents the excess of cash
consideration received by the company over par value.
13. STOCK SUBSCRIPTION RECEIVABLE
On March 26, 1999, there was a private placement for 130,000,000
common shares for $988,000. The funds were not yet received as
at the audit report date, August 5, 1999.
The 8% cost of issuance of this subscription in the amount of
$79,040 was charged against additional paid-in capital.
<TABLE>
<CAPTION>
14. ACCUMULATED OTHER COMPREHENSIVE LOSS
The Company has adopted SFAS No. 130 "Reporting comprehensive
loss" which requires new standards for reporting and display of
comprehensive loss and its components in the consolidated
financial statements. However it does not affect net income or
total shareholders' equity. The components of comprehensive loss
are as follows:
For the For the For the
six month six month six month
period ended period ended period ended
June 30, June 30, June 30,
1999 1998 1997
<S> <C> <C> <C>
$ $ $
Net loss (50,689) (2,500) (7,518)
Other comprehensive income
Foreign currency translation adjustments (1,230) -- --
-------- -------- --------
Net comprehensive loss (51,919) (2,500) (7,518)
======== ======== ========
The component of accumulated other comprehensive loss follows:
Foreign currency translation adjustment for the six month period ended
June 30, 1999 (1,230)
========
</TABLE>
<PAGE>
AR ASSOCIATES, INC.
Notes to Consolidated Interim Financial Statements
June 30, 1999 and 1998
(Expressed in US Dollars)
15. RELATED PARTY TRANSACTIONS
<TABLE>
<CAPTION>
Transactions with related parties:
For the For the For the
six month six month six month
period ended period ended period ended
June 30, June 30, June 30,
1999 1998 1997
<S> <C> <C> <C>
$ $ $
Rent expense 3,185 -- --
Interest expense 9,167 -- --
</TABLE>
The following amounts were due from/to related parties and are
included in the following accounts:
1999 1998
$ $
Accounts receivable 4,500 --
Account payable 50,353 --
16. SEGMENTED INFORMATION
No segmented information is presented as the Company operates in
Canada only through one segment, which is, manufacture and
distribution of bulk windshield washer fluids.
17. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use
two digits rather than four to identify a year. Date-sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using year 2000 dates is
processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something
other than a date. The effects of the Year 2000 Issue may be
experienced before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may
range from minor errors to significant systems failure which
could affect a company's ability to conduct normal business
operations. It is not possible to be certain that all aspects of
the Year 2000 Issue affecting the company, including those
related to the efforts of customers, suppliers, or other third
parties, will be fully resolved.
<PAGE>
<TABLE>
<CAPTION>
13
AR ASSOCIATES, INC.
Consolidated Interim Statement of Cost of Sales
For the period from January 1 to June 30
(Expressed in US Dollars)
For the For the For the
six month six month six month
period ended period ended period ended
June 30, June 30, June 30,
1999 1998 1997
$ $ $
<S> <C> <C> <C> <C>
COST OF SALES
Inventory, beginning of period 55,500 -- --
Purchases 61,770 -- --
------------ ----------- -----------
117,270 -- --
Inventory, end of period 58,208 -- --
------------ ----------- -----------
59,062 -- --
============ =========== ===========
</TABLE>
<PAGE>
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
TORONTO, MONTREAL, OTTAWA
August 27, 1999
AR Associates, Inc.
617 Cherry Street
Sumas, Washington 98295
U.S.A
Attention: Rich Van Deist, President
Gentlemen:
This is to confirm that consent is given for the use of June 30, 1999 and 1998
Consolidated Interim Financial Statements and the December 31, 1997 and 1998
year-end Financial Statements in your SEC filing of Form 10-SB.
Yours very truly,
/s/ SCHWARTZ LEVITSKY FELDMAN LLP
Per: Ralph Ginzburg, C.A.
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
2 18 Stock Exchange Agreement and Plan of Acquisition
dated March 30, 1999 by and between AR Associates,
Inc. and Ultra Clear Manufacturing and Distributing
Ltd.
2(a) 24 September 30, 1993 Agreement by and between Jacques
Viau and Crystal Green
2(b) 27 October 17, 1996 Agreement by and between Jacques
Viau and Crystal Green
2(c) 29 January 31, 1997 Agreement by and between Claude
Aubin and Ultra Clear 3(i) 31 Articles of
Incorporation of the Company.
3(ii) 34 By-Laws of the Company, as amended.
4(ii)(1) 42 Debentures held by Stewart Lockwood in the amount of
$37,000 and dated November 1, 1996.
4(ii)(2) 51 Subscription Agreement dated March 31, 1999, selling
11,818,182 Common Stock of AR Associates, Inc. for
the sum of $0.0076 per share, for a total purchase
price of $89,819.00.
10(i)(b) 53 Licensing Agreement
10(i)(b)(1) 63 March 12, 1996 Trademark Registration Certificate for
Ultra Clair
10(i)(b)(2) 64 March 12, 1996 Trademark Registration Certificate for
Ultra Clear
10(i)(b)(3) 65 March 19, 1996 Trademark Registration Certificate for
Ultra Clear
10(ii)(a) 66 Employment Agreement by and between AR Associates,
Inc. and Richard Van Diest
21 68 List of Subsidiaries
27 71 Financial Data Schedule
EXHIBIT NO. 2
STOCK EXCHANGE AGREEMENT
AND
PLAN OF ACQUISITION
THIS STOCK EXCHANGE AGREEMENT AND PLAN OF ACQUISITION ("Agreement") is
entered into this 30th day of March 1999 by and between AR Associates, Inc., a
Nevada corporation ("AR"), and Ultra Clear Manufacturing & Distributing Limited,
a corporation organized under the laws of British Columbia, Canada ("Ultra
Clear") (AR and Ultra Clear may be individually or collectively as referred to
as a "Party" or the "Parties").
Recitals
WHEREAS, AR seeks a business entity with which to merge and Ultra Clear
seeks to merge with a company whose securities have been approved for trading by
the National Association of Securities Dealers, Inc. ("NASD").
WHEREAS, the Parties desire to effect AR's acquisition of Ultra Clear
by receiving all of the outstanding shares of Ultra Clear in exchange for ten
(10) shares of AR, thus making Ultra Clear a wholly owned subsidiary of AR.
Agreement
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the sufficiency of which is hereby expressly
acknowledged, the Parties agree as follows:
1. Acquisition. In accordance with the provisions of this Agreement, the
British Columbia Company Act and the Nevada Revised Statutes, Ultra
Clear shall be acquired by AR (the "Acquisition") and become a wholly
owned subsidiary of AR. Ultra Clear shall continue to possess all of
its assets, rights, powers and property as constituted immediately
prior to the closing and effectiveness of the Acquisition. The
Acquisition shall be accomplished by the exchange and transfer of
shares as outlined below.
2. Exchange of Shares. Subject to all the terms and conditions of this
Agreement, all of the 5,644,546 outstanding shares of common stock in
Ultra Clear, no par value (the "Ultra Clear Stock"), shall be exchanged
and transferred from the holders of such stock ("Ultra Clear
Shareholders") to AR. In exchange for the Ultra Clear Stock, AR shall
issue to each Ultra Clear Shareholder listed on Ultra Clear's books and
records as of Closing ten (10) shares of common stock in AR, par value
$0.001 (the "AR Common Stock"), for every one (1) share of Ultra Clear
Stock owned. Therefore, the Ultra Clear Shareholders shall collectively
receive a total of 56,445,460 shares of AR Common Stock. As soon as
practicable, on or after the effective date of the Acquisition, the
Ultra Clear Shareholders or their nominee(s) shall surrender the
certificates representing the Ultra Clear Stock to AR's stock transfer
agent, Signature Stock Transfer, Inc. Upon delivery of the certificates
together with an assignment in blank, the Ultra Clear Shareholders will
receive certificates for the AR Common Stock. When issued and
transferred to the Ultra Clear Shareholders, the AR Common Stock shall
be fully paid and non-assessable.
<PAGE>
a. The current officers and directors of Ultra Clear shall remain
the officers and directors of Ultra Clear after the
Acquisition. Upon the effectiveness of the Articles of
Exchange filed with the Nevada Secretary of State, the Ultra
Clear Shareholders shall appoint officers and directors of AR,
or allow those serving as such to continue until successors
are appointed.
b. The Articles of Incorporation and Bylaws of AR in effect
immediately prior to the Acquisition will remain as such after
the Acquisition, without any modification or amendment as a
result of the Acquisition.
3. Exemption from Registration. The Parties hereto intend that the
exchange of shares be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations promulgated thereunder and exempt from the registration
requirements of the applicable states. All shares transferred and
acquired hereunder shall be `restricted securities' as such phrase is
defined in the Act.
4. Warranties and Representations of Ultra Clear In order to induce AR to
enter into this Agreement and to complete the transaction contemplated
hereby, Ultra Clear warrants and represents to AR that:
a. Organization and Standing. Ultra Clear is a corporation duly
organized, validly existing and in good standing under the
laws of the province of British Columbia, Canada. It is also
qualified to do business in every other state or jurisdiction
in which it operates and to own and operate its assets,
properties and business in such states or jurisdictions.
b. Capitalization. As of Closing, 100,000,000 shares of Ultra
Clear Stock, no par value, are authorized for issuance by
Ultra Clear, of which 5,644,546 shares of Common Stock are
issued and outstanding. No other voting or equity securities
are authorized or issued, nor are any authorized or issued
securities convertible into voting stock. Ultra Clear does not
have any outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which Ultra Clear is
bound, calling for the issuance of any additional shares of
Common Stock or any other voting or equity security. The Ultra
Clear Stock constitutes 100% of the outstanding equity capital
of Ultra Clear and such stock constitutes 100% of Ultra
Clear's voting power, representing the exclusive right to
receive dividends, when, and if, declared and paid, and the
exclusive right to receive the proceeds of liquidation
attributable to Ultra Clear Stock, if any. From the date
hereof, and until the Closing Date, no dividends or
distributions of capital, surplus, or profits shall be paid or
declared by Ultra Clear in redemption of their outstanding
shares or otherwise. Except as described herein no additional
shares shall be issued in connection with this Acquisition by
Ultra Clear.
c. No Pending Actions. To the best of Ultra Clear's knowledge,
after diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened against or affecting Ultra
Clear or its subsidiaries, or against any of the officers or
directors therewith that arise out of their operation of Ultra
Clear and its subsidiaries, nor is Ultra Clear or its
subsidiaries in material violation of any federal or state
law, ordinance or regulation of any kind whatever, including,
but not limited to laws, rules and regulations governing the
sale of its products, services or securities. Ultra Clear is
not an investment company, as defined in, or otherwise subject
to regulation under, the Investment Company Act of 1940.
<PAGE>
d. Conduct of Business. Ultra Clear represents that it shall not
materially change the normal course of its business operations
prior to Closing. Ultra Clear shall not amend its Articles of
Incorporation or Memorandum (except as may be described in
this Agreement), declare dividends, redeem securities, incur
additional or newly_funded liabilities outside the ordinary
course of business, acquire or dispose of fixed assets, change
employment terms, enter into any material or long_term
contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less than its
stated amount, pay more on any liability than its stated
amount, or enter into any other transaction without the prior
approval of AR, not to be unreasonably withheld.
e. Authority, No Conflict. This Agreement constitutes the legal,
valid, and binding obligation of Ultra Clear, enforceable
against Ultra Clear in accordance with its terms. Ultra Clear
has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and to perform
its obligations under this Agreement. Neither the execution or
delivery of this Agreement nor the consummation or performance
of the Acquisition will contravene, conflict with, or result
in a violation of any Ultra Clear organizational document, or
any external restraint, ruling, agreement or judgment relating
to Ultra Clear.
5. Warranties and Representations of AR. In order to induce Ultra Clear to
enter into this Agreement and to complete the transaction contemplated
herein, AR warrants and represents to Ultra Clear that:
a. Organization and Standing. AR is a corporation duly organized,
validly existing and in good standing under the laws of
Nevada. It is also qualified to do business in every other
state or jurisdiction in which it operates and to own and
operate its assets, properties and business in such states or
jurisdictions.
b. Capitalization. As of Closing, AR shall have authorized for
issuance 100,000,000 shares of voting Common Stock, $0.001 par
value. As of Closing, AR shall have a total of 4,000,000
shares of its Common Stock issued and outstanding, which
shares are validly issued, fully paid and non-assessable. To
the best of AR's knowledge, all such issued and outstanding
shares were issued pursuant to a valid registration statement
under the Act or pursuant to valid exemptions therefrom.
c. Ownership of Shares. Upon the transfer of the AR Common Stock
to the Ultra Clear Shareholders pursuant to this Agreement,
the Ultra Clear Shareholders will thereby acquire good and
absolute marketable title thereto, and will be subject to the
resale terms as set forth herein. Such securities shall be
subject to restrictions imposed by the Act, and applicable
state Blue Sky laws due to lack of registration with any
federal or state securities commissions or authorities.
d. No Pending Actions. To the best of AR's knowledge, after
diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened against or affecting AR, or
against any of AR's officers or directors that arise out of
their operation of AR, nor is AR in violation of any federal
or state law, material ordinance or regulation of any kind
whatever, including, but not limited to laws, rules and
regulations governing the sale of its products, services or
securities. AR is not an investment company, as defined in, or
otherwise subject to regulation under, the Investment Company
Act of 1940.
<PAGE>
e. Authority, No Conflict. This Agreement constitutes the legal,
valid, and binding obligation of AR, enforceable against AR in
accordance with its terms. AR has the absolute and
unrestricted right, power, authority, and capacity to execute
and deliver this Agreement and to perform its obligations
under this Agreement. Neither the execution or delivery of
this Agreement nor the consummation or performance of the
Acquisition will contravene, conflict with, or result in a
violation of any AR organizational document, or any external
restraint, ruling, agreement or judgment relating to AR.
6. No Misleading Statements or Omissions. Neither this Agreement nor any
Schedule or Documents attached hereto or presented to AR by Ultra Clear
or to Ultra Clear by AR in connection with this Agreement or the
Acquisition, contains any materially misleading statement, or omits any
fact of statement necessary to make the other statements or facts
therein set forth not materially misleading.
7. Validity of this Agreement. By Closing, all corporate and other
proceedings required to be taken by Ultra Clear and AR in order to
enter into and to carry out this Agreement shall have been duly and
properly taken. Upon execution, this Agreement shall constitute the
valid, binding and enforceable obligations of the Parties and shall
inure to the benefit of the heirs, executors, administrators and
assigns of the Ultra Clear Shareholders and upon the successors and
assigns of AR, except to the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws relating to or
effecting generally the enforcement of creditors rights. The execution
and delivery of this Agreement and these stated terms shall not result
in the breach of any of the terms or conditions of, or constitute a
default under or violate the Parties' Articles of Incorporation thereto
or any similar document of undertaking, oral or written, to which the
Parties are a party to or is bound or may be affected by, nor will such
execution, delivery and carrying out violate any order, writ,
injunction, decree, law, rule or regulation of any court, regulatory
agency or other governmental body; and the business now conducted by
the Parties can continue to be so conducted after completion of the
transaction contemplated hereby, with Ultra Clear as a wholly-owned
subsidiary of AR.
8. Access to Books and Records. During the course of the Acquisition
through Closing, AR and Ultra Clear agree to make available for
inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable
access to all documentation and other information concerning the
business, financial and legal conditions of each other for the purpose
of conducting a due diligence investigation thereof. Such due diligence
investigation shall be for the purpose of satisfying each party as to
the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
Acquisition. The Parties further agree to keep confidential and not use
for their own benefit, except in accordance with this Agreement and the
Acquisition, any information or documentation obtained in connection
with any such investigation.
9. Survival; Indemnification. All representations, warranties, covenants
and agreements made herein shall survive the execution and delivery of
this Agreement and Closing. Each of the Parties (as an "Indemnifying
Party") hereby agree, jointly and severally, to indemnify, defend, and
hold the other Party (as an "Indemnified Party") harmless from and
against any damage, loss liability, or expense (including, without
limitation, reasonable expenses of investigation and reasonable
attorney's fees) arising out of any material breach of any
representation, warranty, covenant, or agreement made by the
Indemnifying Party.
<PAGE>
10. Restricted Shares; Legend. The 56,445,460 shares of AR Common Stock to
be issued to the Ultra Clear Shareholders will be issued pursuant to
exemptions from registration and therefore shall be "restricted
securities" as defined in the Act; and each stock certificate issued to
such recipients hereunder will bear a restrictive legend substantially
as follows:
The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under the securities laws of any state and may not be sold
or otherwise transferred unless in compliance with the
registration provisions of such Act and state laws or unless
availability of an exemption from such registration provisions
has been established.
Appropriate stop transfer instructions regarding such shares shall be
given to AR's stock transfer agent, Signature Stock Transfer, Inc.
11. Expenses. Each of the Parties shall bear and pay the costs and expenses
they have allocated prior to the execution of the Agreement and that
they shall bear and pay the costs incurred by them or on their behalf
in connection with the consummation of this Agreement, including,
without limiting the generality of the foregoing, fees and expenses of
financial consultants, accountants and counsel and the cost of any
documentary stamps, sales and excise taxes which may be imposed upon or
be payable in respect to the transaction.
12. Closing. The Closing of the transactions contemplated by this Agreement
("Closing") shall take place as soon as all Parties have supplied the
required documents and obtained the required approvals as discussed
herein. Closing shall take place at such place as the Parties hereto
shall agree upon or by facsimile transmission and overnight delivery
service.
13. Deliveries. At or after Closing, each Ultra Clear Shareholder may
deliver or surrender a certificate or certificates representing all of
such shareholder's Ultra Clear Stock. Upon delivery of such shares, AR
will instruct its transfer agent to deliver a certificate evidencing a
number of shares of AR Common Stock equal to the number of Ultra Clear
shares so surrendered.
14. Conditions Precedent to Closing. The obligations of the Parties under
this Agreement shall be and are subject to fulfillment, prior to or at
the Closing, of each of the following conditions:
a. That each of the representations and warranties of the Parties
contained herein shall be true and correct at the time of the
Closing date as if such representations and warranties were
made at such time;
b. That the Parties shall have performed or complied with all
agreements, terms and conditions required by this Agreement to
be performed or complied with by them prior to or at the time
of the Closing;
15. Termination. This Agreement may be terminated at any time before or, at
Closing, by:
a. The mutual agreement of the Parties;
b. Any party if:
i. Any provision of this Agreement applicable to a party
shall be materially untrue or fail to be
accomplished; or
ii. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain or
prevent the consummation of this Agreement.
<PAGE>
c. Upon termination of this Agreement for any reason, in
accordance with the terms and conditions set forth in this
paragraph, each said party shall bear all costs and expenses
as each party has incurred and no party shall be liable to the
other.
16. Miscellaneous Provisions. This Agreement is the entire agreement
between the Parties in respect of the subject matter hereof, and no
other agreements exist, written or oral, nor may this Agreement be
modified except in writing and executed by all of the Parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.
17. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the province of British
Columbia, Canada, without regard to its law on the conflict of laws.
Any dispute arising out of this Agreement shall be brought in a court
of competent jurisdiction in British Columbia, Canada. The Parties
exclude any and all statutes, laws and treaties which would allow or
require any dispute to be decided in another forum or by other rules of
decision than provided in this Agreement.
18. Notices. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail to the
Parties at the following addresses:
a. If to AR: AR Associates, Inc.
Attn: Rich Van Diest, President
P.O. Box 38
Sumas, WA 98295
b. If to Ultra Clear: Ultra Clear Manufacturing &
Distributing Limited
Attn: Wayne Lowes, President
1013 Coutts Way
Abbotsford, B.C. V2S 7M2
19. Finders and Brokers. The Parties agree that neither has utilized any
finder or broker in bringing the Parties together or who were
instrumental in the negotiation, execution, or consummation of this
Agreement. Further, the Parties each agree to indemnify the other
against any claim by any third person for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or the
transaction contemplated hereby based on any alleged agreement or
understanding between such party and such third person, whether express
or implied, from the actions of such party. The covenants set forth in
this section shall survive Closing and the consummation of the
transaction herein contemplated.
20. Counterparts. This Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, the foregoing Agreement, having been duly approved
and adopted by the Board of Directors, and duly approved and adopted by the
stockholders of the constituent corporations, as required, in the manner
provided by the laws of the state of Nevada and province of British Columbia,
Canada, the presidents of the Parties do now execute this Agreement under the
authority of the directors and stockholders of each.
AR Associates, Inc.
By: /s/ Rich Van Diest
Rich Van Diest, President
Ultra Clear Manufacturing &
Distributing Limited
By: /s/ Wayne Lowes
Wayne S. Lowes, President
EXHIBIT NO. 2(A)
OFFER TO PURCHASE
BETWEEN: Jacques Viau and 124612 Canada Inc. (together the "Vendor")
305 Nenuphar St.,Granby, Quebec J2H 2J8
AND:
Crystal Green Resources Inc. (the "Purchase")
P.O. Box 1167 Section "A" 17824 - 56th Street
Surrey, B.C. V3S 4P6
WHEREBY the Vendor is the direct and indirect owner of 22,098 shares of
La Compagnie Ultra Clair Inc. ("Ultra Clair"), a company duly registered and
incorporated under the laws of the Province of Quebec;
AND WHEREAS the Vendor wishes to sell and the Purchaser wishes to
secure an option to buy 22,098 shares (the Vendor's shares) of Ultra Clair from
the Vendor under the following terms and conditions.
NOW THEREFORE in consideration of the premises and of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. The Purchaser agrees to pay to the Vendor the sum of forty-five thousand
dollars ($45,000.00) upon the signing of this agreement and will have the
option, at the Purchaser's sole discretion to pay a further one hundred and
ninety thousand dollars ($190,000.00) on or before December 15, 1993 in one lump
sum payment, to complete the purchase of the Vendor's shares. The first payment
of $45,000 will be deposited in trust. Should Crystal Green complete the second
payment of $190,000 then the $45,000 shall be released to the Vendor. If Crystal
Green is unable to exercise the option, then the $45,000 shall be paid to
Ultra-Clair to cover the past due amounts on Crystal Green's license agreement
with Ultra-Clair.
2. The Vendor represents and warrants to the Purchaser that:
A. He is the beneficial and/or registered owner of 22,098 shares
being all of the Vendor's shares of Ultra Clair, free and
clear of all liens, claims and encumbrances whatsoever;
B. He has due and sufficient right and authority to enter into
this agreement on the terms and conditions herein set forth;
C. The attached Schedule "B" is the current list of outstanding
shares of La Compagnie Ultra-Clair Inc. and no further share
issuances shall be made until the termination of this
agreement either through closing or expiry;
D. No person, firm or corporation other than Crystal Green has
any agreement or right to option or purchase any of the
Vendor's shares;
E. As President and controlling shareholder of Ultra Clair, he
will maintain in every way possible the current and proper
business conduct of Ultra Clair;
F. From the date of signing of this agreement, the Vendor shall
not in any way whatsoever permit the licensing of further
rights to distribute the product of Ultra Clair to any
individuals or corporations either affiliated or at arm's
length to the Company, without the prior written consent of
the Purchaser.
<PAGE>
G. Upon receipt of the final payment, to transfer forthwith the
Vendor's shares of Ultra Clair into the name of Crystal Green
Resources Inc.
H. To resign as president and direct or Ultra Clair and to be
replaced by the addition of Wayne Lowes and George Munson on
the board of directors.
I. There are no existing agreements between any of the
shareholders of La Compagnie Ultra-Clair Inc. In particular,
but without limiting the foregoing, there are no agreements
which would allow the issuance of any further shares, the
cancellation of any existing shares, or restrict any of the
voting rights, except as follows: Jacques Viau has pledged an
amount approximately $22,000 to cover a charge by a third
party laid against the shares of Claude Aubin and Lue Marion.
3. The Purchaser warrants to the Vendor that:
A. Crystal Green will honour all current licensing agreements of
which it has received notice and business arrangements
currently under contract between Ultra Clair and its clients,
suppliers and licenses until such contracts expire.
B. To maintain the employ of key personnel, namely Francine
Lacoste and Lue Marion under terms and conditions at least as
favourable as their current situation or as otherwise may be
mutually agreed between the parties.
C. To carry on the current business operations and maintain
proper books and records of the affairs of the Company under
the laws and jurisdiction of the Province of Quebec until such
time as the board of directors and shareholders shall decide
otherwise.
D. Crystal Green and/or any of its directors will replace Jacques
Viau as guarantor for the bank line of credit for Ultra-Clair
which currently stands at $150,000.00.
E. Crystal Green will guarantee the purchas4e of any of the
issued and outstanding shares of Ultra-Clair as outlined in
Schedule "B" that Jacques Viau may obtain from the existing
shareholders or that the existing shareholders may be desirous
of selling, at a price to be not less than the per share value
as calculated by the transaction outlined within this purchase
agreement. This guarantee is subject to, and extended for, a
period of 30 days from the date of closing.
Acknowledged and Agreed to this 30th day of September, 1993.
CRYSTAL GREEN RESOURCES INC.
Per: /s/Jacques Viau Per: /s/ Wayne Lowes
124612 Canada Inc. Wayne Lowes
Per: /s/ Jacques Viau Per: /s/ Bradley T. Aelicks
Jacques Viau Bradley T. Aelicks
<PAGE>
Schedule "A"
Direct and indirect shareholders of Jacques Viau in La Compagnie
Ultra-Clair, Inc.
CATEGORY "B" COMMON SHARES
124612 Canada Inc. 383
Jacques Viau 45
CATEGORY "F" PREFERRED SHARES
124612 Canada Inc. 4,550
CATEGORY "G" PREFERRED SHARES
Jacques Viau 3,750
124612 Canada Inc. 13,370
------
SCHEDULE "B" 22,09
Total Issued and Outstanding Shares of La Compagnie
Ultra-Clair Inc.
CATEGORY "B" COMMON SHARES
Marion, Lue 90
124612 Canada Inc. 383
Lacoste, Francine 32
Aubin, Claude 90
Jacques Viau 45
CATEGORY "C" PREFERRED SHARES
Produits Nor-Do Inc. 236
CATEGORY "F" PREFERRED SHARES
124612 Canada Inc. 4,550
CATEGORY "G PREFERRED SHARES
Marion, Lue 3,125
Aubin, Claude 3,125
Jacques Viau 3,750
124612 Canada Inc. 13,370
EXHIBIT NO. 2(B)
[OBJECT OMITTED] (ULTRA CLEAR LOGO)
October 17, 1996
Mr. Jacques Viau and
124612 Canada Inc.
c/o Ultra Claire Inc.
574 Boul Guimond
Longueuil, Quebec
J4G 1P8
Dear Jacques,
We are pleased to inform you that the Board of Directors of Ultra Clear have
agreed to purchase all of the issued and outstanding shares of La Compagnie
Ultra Claire Inc. (the "Company") registered or to be registered prior to
closing in the name of 124612 Canada Inc. (the "Vendor").
The terms of the buyout acceptable to us are as follows:
1. Cash purchase of 100% of the shares held by 124612 Canada Inc. for
$125,000.00 as described within Schedule "A".
2. Immediate reimbursement of any monies advanced to Ultra Claire to
maintain proper business operations between October 8th and November
8th, 1996.
3. Transaction date to close - not later than Friday, November 8th, 1996
(the "closing date"; or such earlier date as to be mutually agreeable
by the parties.
4. Your resignation as President and Director of the Company at the time
of closing.
5. Termination of all employment contracts without any obligations for
future compensation for severance.
6. The terms of this Agreement shall superceded and replace any and all
prior agreements including those dated August 26th, 1994, November
30th, 1994, June 22, 1995 and the Trust Agreement dated April 1, 1996.
It is understood that Ultra Clear is making this offer relying on the following
explicit representations and warranties from Jacques Viau in his capacity as
President, Director and employee of the Company, and from Jacques Viau as
Director, President and as shareholder of 124612 Canada, Inc.
a. All steps to be taken to insure the transfer at the closing of all
shares of Ultra Claire issued and held by the Vendor;
b. Business to be maintained and all repairs and service to be kept up;
c. No loans outstanding to the Vendor or Jacques Viau;
d. All operating equipment and tools to remain in possession of Ultra
Claire;
e. Those additional representations and warranties as set out in Schedule
"B" attached hereto.
<PAGE>
If you agree with the foregoing terms please execute the bottom of the
enclosed copy as of the date of this letter and return it to our
office.
Yours truly,
ULTRA CLEAR MANUFACTURING
& DISTRIBUTING LIMITED
/s/ Bradley T. Aelicks
Bradley T. Aelicks
Director
BTA/eh
124612 CANADA INC.
Per: /s/ Jacques Viau
Jacques Viau, Personally and as Shareholder of
La Compangnie Ultra-Clair Inc.
/s/ Jacques Viau
Jacques Viau, Personally and as Shareholder of
La Compangnie Ultra Clair Inc.
LA COMPAGNIE ULTRA-CLAIR INC.
Per: /s/ Jacques Viau
Jacques Viau, President & Director
<PAGE>
SCHEDULE "A"
<TABLE>
<CAPTION>
The ownership of the issued and outstanding shares of Ultra-Clair upon Closing
will be as follows:
- -------------------------------- -----------------------------------------------------------------------------------
SHAREHOLDER CLASS OF SHARES
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
<S> <C> <C> <C> <C>
Category Category Category Category
"B" "C" "F" "G"
Common Common Preferred Preferred
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
124612 Canada Ltd.(1) 326 236 4,550 13,370
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
Claude Aubin 90 0 0 3,525
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
Francine Lacoste 32 0 0 450
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
Ultra Clear 192 0 0 6,875
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
Totals 640 236 4,550 24,220
- -------------------------------- --------------------- ------------------ -------------------- ---------------------
(1) beneficially owned by Jacques Viau
</TABLE>
EXHIBIT NO. 2(C)
ULTRA CLEAR MANUFACTURING & DISTRIBUTING LIMITED
Abbotsford Office - Unit 300 - 34252 Marshall Rd., Abbotsford, B.C., V2S 1L9
- Phone: (604) 566-2508 - Fax: (604) 566-0253
Vancouver Office - 800 - 850 West Hastings Street, Vancouver, B.C. V6C 1E1
- Phone: (604) 685-9700 - Fax: (604) 685-9744
January 31, 1997
Re: Purchase Option Agreement to Acquire Shares of
"La Compagnie Ultra-Claire Inc."
BETWEEN: CLAUDE AUBIN
c/o La Compagnie Ultra-Claire Inc.
574 Boule Guimond
Longueil, Quebec
J5G 1P8
AND:
ULTRA CLEAR MANUFACTURING & DISTRIBUTION LIMITED
800-850 West Hastings Street
Vancouver, B.C.
V6C 1E1
WHEREBY Claude Aubin ("Aubin") is the registered holder of 3,525 Category G.
Shares and 90 Category B Shares of La Compagnie Ultra-Claire Inc. (the
"Shares");
WHEREBY Ultra Clear Manufacturing and Distributing Limited ("Ultra Clear")
wishes to purchase the Shares from Aubin for the following cash and share
consideration;
NOW THEREFORE BE IT RESOLVED THAT:
1. Ultra Clear Manufacturing and Distributing Limited ("Ultra Clear")
shall have an option to purchase the Shares from Aubin for the
following cash and share consideration:
a. $21,500 cash payable as follows:
b. $8,000 on signing on or about February 1,
1997,
c. $5,500 on or before March 1, 1997,
d. $4,000 on or before April 1, 1997,
e. $4,000 on or before May 1, 1997,
Ultra Clear, as its opti on, may make any payments at
an earlier date and in such event, at such time as
all due payments are made, all the shares shall be
delivered to Ultra Clear.
f. The issuance of 35,000 common shares of
Ultra Clear by May 1, 1997, subject to any
required regulatory approvals and hold
periods.
2. Aubin represents and warrants to Ultra Clear:
a. That the Shares are all of the shares of La Compagnie
Ultra-Claire Inc. ("Ultra-Claire") that are owned directly,
indirectly or beneficially by him. b. That he has no right,
title or option to acquire any further shares of Ultra-Claire
and that should any exist or be acquired, they shall be
included as part of this purchase with no further compensation
required for transfer to Ultra Clear, and Aubin shall sign any
required documentation in this regard.
<PAGE>
3. The Parties agree that the Shares will be held in trust with Brunet and
Brunet until the purchase has been completed. The purchase funds are
being generated from the cash-flow from Ultra-Clear and Ultra-Claire.
Ultra Clear will make the payments outlined in p.1a) and 1b) for so
long as the current and short term projected cash-flows are not
significantly disrupted. If for any reason whatsoever the purchase is
not completed and Aubin should decide to terminate the balance of the
purchase option, then a number of shares equivalent to the percentage
of $42,000 paid by Ultra Clear up to that point, pro-rated for each
share category, will be transferred firstly to Ultra Clear and the
balance refunded to Aubin.
For the purposes of the above calculation, the 35,000 share issuance of
Ultra Clear will be deemed to be a payment of $20,500.
4. Aubin shall have the right to terminate the option if an only if Ultra
Clear fails to make any of the cash or share payments in the time
specified within this agreement. In such instance, Aubin shall deliver
a default notice by facsimile transmission to Ultra Clear at
1-604-685-9744 and Ultra Clear will have five (5) business days to
remedy such default or the option will automatically terminate.
5. This Agreement shall supercede any previous agreements including but
not limited to the September 10, 1994 Agreement and the June 13, 1995
Agreement (executed June 22, 1995) and any and all other Agreements
either written or verbal.
The Parties hereto agree this 31st day of January, 1997.
ULTRA CLEAR MANUFACTURING
& DISTRIBUTING LIMITED
/s/ Bradley T. Aelicks
Bradley T. Aelicks
/s/ Wayne Lowes
Wayne Lowes
BRUNET AND BRUNET
/s/ Michael Lacoste /s/ Claude Aubin
Michael Lacoste Claude Aubin
EXHIBIT NO. 3(I)
ARTICLES OF INCORPORATION
of
AR Associates, Inc.
Know all men by these present:
That the undersigned, have this day voluntarily associated ourselves together
for the purpose of forming a corporation under and pursuant to the provisions of
Nevada Revised Statutes 78.010. to Nevada Revised Statutes 78.090 inclusive, as
amended, and certify that:
The name of the corporation is: AR Associates, Inc.
Offices for the transaction of any business of the Corporation, and
where meetings of the Board of Directors and of Stockholders may be held, may be
established and maintained in any part of the State of Nevada, or in any other
state, territory, or possession of the United States.
The nature of the business is to engage in any lawful activity.
The Capital Stock shall consist of 2,000,000 shares of common stock,
$0.001 par value.
The members of the governing board of the corporation shall be styled
directors, of which there shall be no more than five. The Directors of this
corporation need not be stockholders. The first Board of Directors is: Raymond
Girard, whose address is 620 S. 11th St., Suite 6, Las Vegas, NV 89101.
This corporation shall have perpetual existence.
This Corporation shall have a president, a secretary, a treasurer, and
a resident agent, to be chosen by the Board of Directors, any person may hold
two or more offices.
The resident agent of this Corporation shall be Raymond Girard, 620 S.
11th St., Suite 6, Las Vegas, NV 89101.
The Capital Stock of the corporation, after the fixed consideration
thereof has been paid or performed, shall not be subject to assessment, and the
individual liable for the debts and liabilities of the Corporation, and the
Articles of Incorporation shall never be amended as the aforesaid provisions.
<PAGE>
No director or officer of the corporation shall be personally liable to
the corporation or any of its stockholders for damages or breach of fiduciary
duty as a director or officer involving any act or omission of any such director
or officer provided, however, that the foregoing provision shall not eliminate
or limit the liability of a director or officer for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes. Any repeal or modification of this Article of the Stockholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation
for acts or omissions prior to such repeal or modification.
Except to the extent limited or denied by Nevada Revised Statutes
78.265, Shareholders have a preemptive right to acquire unissued shares,
treasury shares or securities convertible into such shares, of this corporation.
I, the undersigned, being the incorporator herein above named for the
purpose of forming a corporation pursuant to the general corporation law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts within stated are true, and accordingly
have hereunto set my hand this 20th day of April, 1992.
/s/ Raymond Girard
Raymond Girard
620 S. 11th St., Suite 6
Las Vegas, NV 89101
State of NEVADA )
County of CLARK )
On 4/20/92 Raymond Girard , personally appeared before me, a notary public,
personally known to me to be the person whose name is subscribed to the above
instrument who acknowledged that he/she executed the instrument.
/s/ Toni Hamilton
Signature
My commission expires : 11/15/92
<PAGE>
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT
To the matter of AR Associates, Inc., I, Raymond Girard, with address at: 620 S.
11th St., Suite 6, City of LAS VEGAS, County of CLARK, State of NEVADA 89101,
hereby accept appointment as Resident Agent of the above-entitled corporation in
accordance with NRS 78.090. FURTHERMORE, that the principal office in this State
is located at 620 S. 11th St., Suite 6, City of LAS VEGAS, County of CLARK,
State of NEVADA 89101.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of April, 1992.
/s/ Raymond Girard
RESIDENT AGENT
================================================================================
NRS 78.090 Except any period of vacancy described in NRS 78.097, every
corporation shall have a resident agent who may, whether a natural person or
corporation, resident or located in this state, in charge of its principal
office. The resident agent may be any bank or banking corporation, or other
corporation, located and doing business in this state . . .The certificate of
acceptance must be filed at the time of the initial filing of the corporate
papers.
State of NEVADA )
)
County of CLARK )
On April 20, 1992, Raymond Girard, personally appeared before me, a notary
public, personally known to me to be the person whose name is subscribed to the
above instrument who acknowledged that he executed the instrument.
/s/ Toni Hamilton
My commission expires 11/15/95
EXHIBIT NO. 3(II)
BY-LAWS
OF
AR ASSOCIATES, INC.
MEETING OF STOCKHOLDERS
SECTION 1. The annual meeting of the Stockholders of the Company shall
be held at its office in the City of Las Vegas, Clark County, at 10:00 o'clock
a.m. on the 1st day in May in each year, if not a legal holiday, and if a legal
holiday, then on the next succeeding day not a legal holiday, for the purpose of
electing Directors of the Company to serve during the ensuing year and for the
transaction of such other business as may be brought before the meeting.
At least five days' written notice specifying the time and place, when
and where, the annual meeting shall be convened, shall be mailed in a United
States Post Office addressed to each of the Stockholders of record at the time
of issuing the notice at his or her, or its address last known, as the same
appears on the books of the Company.
SECTION 2. Special meetings of the Stockholders may be held at the
office of the Company in the State of Nevada, or elsewhere, whenever called by
the President, or by the Board of Directors, or by vote of, or by an instrument
in writing signed by the holder of 10% of the issued and outstanding capital
stock of the Company. At least ten days' written notice of such meeting,
specifying the day and hour and place, when and where such meeting shall be
convened, and objects for calling the same, shall be mailed in a United States
Post Office, addressed to each of the Stockholders of record at the time of
issuing the notice, at his or her or its address last known, as the same appears
on the books of the Company.
SECTION 3. If all the Stockholders of the Company shall waive notice of
a meeting, no notice of such meeting shall be required, and whenever all of the
Stockholders shall meet in person or by proxy, such meeting shall be valid for
all purposes without call or notice, and at such meeting any corporate action
may be taken.
The written certificate of the officer or officers calling any meeting
setting forth the substance of the notice, and the time and place of mailing of
the same to the several Stockholders, and the respective addresses to which the
same were mailed, shall be prima facie evidence of the manner and fact of the
calling and giving such notice.
If the address of any Stockholder does not appear upon the books of the
Company, it will be sufficient to address any notice to such Stockholder at the
principal office of the Corporation.
SECTION 4. All business lawful to be transacted by the Stockholders of
the Company may be transacted at any special meeting or at any adjournment
thereof. Only such business, however, shall be acted upon at special meetings of
the Stockholders as shall have been referred to in the notice calling such
meetings, but at any Stockholders' meeting at which all of the outstanding
capital stock of the Company is represented, either in person or by proxy, any
lawful business may be transacted, and such meeting shall be valid for all
purposes.
SECTION 5. At the Stockholders' meetings, the holders of fifty-one
percent (51%) in amount of the entire issued and outstanding capital stock of
the Company, shall constitute a quorum for all purposes of such meetings.
<PAGE>
If the holders of the amount of stock necessary to constitute a quorum
shall fail to attend, in person or by proxy, at the time and place fixed by
these By-Laws for any annual meeting, or fixed by a notice as above provided for
a special meeting, a majority in interest of the Stockholders present in person
or by proxy may adjourn from time to time without notice other than by
announcement at the meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted as originally called.
SECTION 6. At each meeting of the Stockholders, every Stockholder shall
be entitled to vote in person or by his duly authorized proxy appointed by
instrument in writing subscribed by such Stockholder or by his duly authorized
attorney. Each Stockholder shall have one vote for each share of stock standing
registered in his or her or its name on the books of the Corporation, ten days
preceding the day of such meeting. The votes for Directors, and upon demand by
any Stockholder, the votes upon any question before the meeting, shall be viva
voce.
At each meeting of the Stockholders, a full, true and complete list, in
alphabetical order, of all the Stockholders entitled to vote at such meeting,
and indicating the number of shares held by each, certified by the Secretary of
the Company, shall be furnished, which list shall be prepared at least ten days
before such meeting, and shall be open to the inspection of the Stockholders, or
their agents or proxies, at the place where such meeting is to be held, and for
ten days prior thereto. Only the persons in whose names shares of stock are
registered on the books of the Company for ten days preceding the date of such
meeting, as evidenced by the list of Stockholders, shall be entitled to vote at
such meeting. Proxies and powers of attorney to vote must be filed with the
Secretary of the Company before an election or a meeting of the Stockholders, or
they cannot be used at such election or meeting.
SECTION 7. At each meeting of the Stockholders, the polls shall be
opened and closed; the proxies and ballots issued, received, and be taken in
charge of, for the purpose of the meeting, and all questions touching the
qualifications of voters and the validity of proxies, and the acceptance or
rejection of votes, shall be decided by two inspectors. Such inspectors shall be
appointed at the meeting by the presiding officer of the meeting.
SECTION 8. At the Stockholders' meetings, the regular order of business
shall be as follows:
Reading and approval of the Minutes of previous meeting or meetings;
Reports of the Board of Directors, the President, Treasurer and
Secretary of the Company in the order named;
Reports of Committee;
Election of Directors;
Unfinished Business;
New Business;
Adjournment.
<PAGE>
ARTICLE II
DIRECTORS AND THEIR MEETINGS
SECTION 1. The Board of Directors of the Company shall consist of no
less than one person who shall be chosen by the Stockholders annually, at the
annual meeting of the Company, and who shall hold office for one year, and until
their successors are elected and qualify.
SECTION 2. When any vacancy occurs among the Directors by death,
resignation, disqualification or other cause, the Stockholders, at any regular
or special meeting, or at any adjourned meeting thereof, or the remaining
Directors, by the affirmative vote of a majority thereof, shall elect a
successor to hold office for the unexpired portion of the term of the Director
whose place shall have become vacant and until his successor shall have been
elected and shall qualify.
SECTION 3. Meeting of the Directors may be held at the principal office
of the Company in the state of Nevada, or elsewhere, at such place or places as
the Board of Directors may, from time to time, determine.
SECTION 4. Without notice or call, the Board of Directors shall hold
its first annual meeting for the year immediately after the annual meeting of
the Stockholders or immediately after the election of Directors at such annual
meeting.
Regular meetings of the Board of Directors shall be held at the office
of the Company in the City of Las Vegas, State of Nevada on May 1 at 11:00
o'clock in the a.m. Notice of such regular meetings shall be mailed to each
Director by the Secretary at least three days previous to the day fixed for such
meetings, but no regular meeting shall be held void or invalid if such notice is
not given, provided the meeting is held at the time and place fixed by these
By-Laws for holding such regular meetings.
Special meetings of the Board of Directors may be held on the call of
the President or Secretary on at least three days notice by mail or telegraph.
Any meeting of the Board, no matter where held, at which all of the
members shall be present, even though without or of which notice shall have been
waived by all absentees, provided a quorum shall be present, shall be valid for
all purposes unless otherwise indicated in the notice calling the meeting or in
the waiver of notice.
Any and all business may be transacted by any meeting of the Board of
Directors, either regular or special.
SECTION 5. A majority of the Board of Directors in office shall
constitute a quorum for the transaction of business, but if at any meeting of
the Board there be less than a quorum present, a majority of those present may
adjourn from time to time, until a quorum shall be present, and no notice of
such adjournment shall be required. The Board of Directors may prescribe rules
not in conflict with these By-Laws for the conduct of its business; provided,
however, that in the fixing of salaries of the officers of the Corporation, the
unanimous action of all of the Directors shall be required.
SECTION 6. A Director need not be a stockholder of the Corporation.
SECTION 7. The Directors shall be allowed and paid all necessary
expenses incurred in attending any meeting of the Board, but shall not receive
any compensation for their services as Directors until such time as the Company
is able to declare and pay dividends on its capital stock.
SECTION 8. The Board of Directors shall make a report to the
Stockholders at annual meetings of the Stockholders of the condition of the
Company, and shall, at request, furnish each of the Stockholders with a true
copy thereof.
<PAGE>
The Board of Directors, in its discretion, may submit any contract or
act for approval or ratification at any annual meeting of the Stockholders
called for the purpose of considering any such contract or act, which, if
approved, or ratified by the vote of the holders of a majority of the capital
stock of the Company represented in person or by proxy at such meeting, provided
that a lawful quorum of Stockholders be there represented in person or by proxy,
shall be valid and binding upon the Corporation and upon all the Stockholders
thereof, as if it had been approved or ratified by every Stockholder of the
Corporation.
SECTION 9. The Board of Directors shall have the power from time to
time to provide for the management of the offices of the Company in such manner
as they see fit, and in particular from time to time to delegate any of the
powers of the Board in the course of the current business of the Company to any
standing or special committee or to any officer or agent and to appoint any
persons to be agents of the Company with such powers (including the power to
subdelegate), and upon such terms as may be deemed fit.
SECTION 10. The Board of Directors is vested with the complete and
unrestrained authority in the management of all of the affairs of the Company,
and is authorized to exercise for such purpose as the General Agent of the
Company, its entire corporate authority.
SECTION 11. The regular order of business at meetings of the Board of
Directors shall be as follows:
1. Reading and approval of the Minutes of any previous meeting or
meetings;
2. Reports of officers and committeemen;
3. Election of officers;
4. Unfinished business;
5. New business;
6. Adjournment.
ARTICLE III
OFFICERS AND THEIR DUTIES
SECTION 1. The Board of Directors, at its first and after each meeting
after the annual meeting of Stockholders, shall elect a President, a Secretary
and a Treasurer, to hold office for one year next coming, and until their
successors are elected and qualify. The offices of the President, Secretary and
Treasurer may be held by one person.
Any vacancy in any of said offices may be filled by the Board of
Directors.
The Board of Directors may from time to time, by resolution, appoint
such additional Vice Presidents and additional Assistant Secretaries, Assistant
Treasurer and Transfer Agents of the Company as it may deem advisable; prescribe
their duties, and fix their compensation, and all such appointed officers shall
be subject to removal at any time by the Board of Directors. All officers,
agents, and factors of the Company shall be chosen and appointed in such manner
and shall hold their office for such terms as the Board of Directors may by
resolution prescribe.
<PAGE>
SECTION 2. The President shall be the executive officer of the Company
and shall have the supervision and, subject to the control of the Board of
Directors, the direction of the Company's affairs, with full power to execute
all resolutions and orders of the Board of Directors not especially entrusted to
some other officer of the Company. He shall be a member of the Executive
Committee, and the Chairman thereof; he shall preside at all meetings of the
Board of Directors, and at all meetings of the Stockholders, and shall sign the
Certificates of Stock issued by the Company, and shall perform such other duties
as shall be prescribed by the Board of Directors.
SECTION 3. The Vice-President shall be vested with all the powers and
perform all the duties of the President in his absence or inability to act,
including the signing of the Certificates of Stock issued by the Company, and he
shall so perform such other duties as shall be prescribed by the Board of
Directors.
SECTION 4. The Treasurer shall have the custody of all the funds and
securities of the Company. When necessary or proper, he shall endorse on behalf
of the Company for collection checks, notes, and other obligations; he shall
deposit all monies to the credit of the Company in such bank or banks or other
depository as the Board of Directors may designate; he shall sign all receipts
and vouchers for payments made by the Company, except as herein otherwise
provided. He shall sign with the President all bills of exchange and promissory
notes of the Company; he shall also have the care and custody of the stocks,
bands, certificates, vouchers, evidence of debts, securities, and such other
property belonging to the Company as the Board of Directors shall designate; he
shall sign all papers required by law or by those By-Laws or the Board of
Directors to be signed by the Treasurer. Whenever required by the Board of
Directors, he shall render a statement of his cash account; he shall enter
regularly in the books of the Company to be kept by him for the purpose, full
and accurate accounts of all monies received and paid by him on account of the
Company. He shall at all reasonable times exhibit the books of account to any
Directors of the Company during business hours, and he shall perform all acts
incident to the position of Treasurer subject to the control of the Board of
Directors.
The Treasurer shall, if required by the Board of Directors, give bond
to the Company conditioned for the faithful performance of all his duties as
Treasurer in such sum, and with such surety as shall be approved by the Board of
Directors, with expense of such bond to be borne by the Company.
SECTION 5. The Board of Directors may appoint an Assistant Treasurer
who shall have such powers and perform such duties as may be prescribed for him
by the Treasurer of the Company or by the Board of Directors, and the Board of
Directors shall require the Assistant Treasurer to give a bond to the Company in
such sum and with such security as it shall approve, as conditioned for the
faithful performance of his duties as Assistant Treasurer, the expense of such
bond to be borne by the Company.
SECTION 6. The Secretary shall keep the Minutes of all meetings of the
Board of Directors and the Minutes of all meetings of the Stockholders and of
the Executive Committee in books provided for that purpose. He shall attend to
the giving and serving of all notices of the Company; he may sign with the
President or Vice-President, in the name of the Company, all contracts
authorized by the Board of Directors or Executive Committee; he shall affix the
corporate seal of the Company thereto when so authorized by the Board of
Directors or Executive Committee; he shall have the custody of the corporate
seal of the Company; he shall affix the corporate seal to all certificates of
stock duly issued by the Company; he shall have charge of Stock Certificate
Books, Transfer Books and Stock Ledgers, and such other books and papers as the
Board of Directors or the Executive Committee may direct, all of which shall at
all reasonable times be open to the examination of any Director upon application
at the office of the Company during business hours, and he shall, in general,
perform all duties incident to the office of Secretary.
<PAGE>
SECTION 7. The Board of Directors may appoint an Assistant Secretary
who shall have such powers and perform such duties as may be prescribed for him
by the Secretary of the Company or by the Board of Directors.
SECTION 8. Unless otherwise ordered by the Board of Directors, the
President shall have full power and authority in behalf of the Company to attend
and to act and to vote at any meetings of the Stockholders of any Corporation in
which the Company may hold stock, and at any such meetings, shall possess and
may exercise any and all rights and powers incident to the ownership of such
stock, and which as the new owner thereof, the Company might have possessed and
exercised if present. The Board of Directors, by resolution, from time to time,
may confer like powers on any person or persons in place of the President to
represent the Company for the purposes in this section mentioned.
ARTICLE IV
CAPITAL STOCK
SECTION 1. The capital stock of the Company shall be issued in such
manner and at such times and upon such conditions as shall be prescribed by the
Board of Directors.
SECTION 2. Ownership of stock in the Company shall be evidenced by
certificates of stock in such forms as shall be prescribed by the Board of
Directors, and shall be under the seal of the Company and signed by the
President or the Vice-President and also by the Secretary or by an Assistant
Secretary.
All certificates shall be consecutively numbered; the name of the
person owning the shares represented thereby with the number of such shares and
the date of issue shall be entered on the Company's books.
No certificate shall be valid unless it is signed by the President or
Vice-President and by the Secretary or Assistant Secretary.
All certificates surrendered to the Company shall be canceled and no
new certificates shall be issued until the former certificate for the same
number of shares shall have been surrendered or canceled.
SECTION 3. No transfer of stock shall be valid as against the Company
except on surrender and cancellation of the certificate therefor, accompanied by
an assignment or transfer by the owner therefor, made either in person or under
assignment, a new certificate shall be issued therefor.
Whenever any transfer shall be expressed as made for collateral
security and not absolutely, the same shall be so expressed in the entry of said
transfer on the books of the Company.
SECTION 4. The Board of Directors shall have power and authority to
make all such rules and regulations not inconsistent herewith as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the capital stock of the Company.
The Board of Directors may appoint a transfer agent and a registrar of
transfers and may require all stock certificates to bear the signature of such
transfer agent and such registrar of transfer.
SECTION 5. The Stock Transfer Books shall be closed for all meetings of
the Stockholders for the period of ten days prior to such meetings and shall be
closed for the payment of dividends during such periods as from time to time may
be fixed by the Board of Directors, and during such periods no stock shall be
transferrable.
<PAGE>
SECTION 6. Any person or persons applying for a certificate of stock in
lieu of one alleged to have been lost or destroyed, shall make affidavit or
affirmation of the fact, and shall deposit with the Company an affidavit.
Whereupon, at the end of six months after the deposit of said affidavit and upon
such person or persons giving Bond of Indemnity to the Company with surety to be
approved by the Board of Directors in double the current value of stock against
any damage, loss or inconvenience to the Company, which may or can arise in
consequence of a new or duplicate certificate being issued in lieu of the one
lost or missing, the Board of Directors may cause to be issued to such person or
persons a new certificate, or a duplicate of the certificate, so lost or
destroyed. The Board of Directors may, in its discretion, refuse to issue such
new or duplicate certificate save upon the order of some court having
jurisdiction in such matter, anything herein to the contrary notwithstanding.
ARTICLE V
OFFICES AND BOOKS
SECTION 1. The principal office of the Corporation in Nevada, shall be
at 620 S. 11th St., Suite 6, Las Vegas, NV 89101, and the Company may have a
principal office in any other state or territory as the Board of Directors may
designate.
SECTION 2. The Stock and Transfer Books and a copy of the By-Laws and
Articles of Incorporation of the Company shall be kept at its principal office
in the County of Clark, state of Nevada, for the inspection of all who are
authorized or have the right to see the same, and for the transfer of stock. All
other books of the Company shall be kept at such places as may be prescribed by
the Board of Directors.
ARTICLE VI
MISCELLANEOUS
SECTION 1. The Board of Directors shall have power to reserve over and
above the capital stock paid in, such an amount in its discretion as it may deem
advisable to fix as a reserve fund, and may, from time to time, declare
dividends from the accumulated profits of the Company in excess of the amounts
so reserved, and pay the same to the Stockholders of the Company, and may also,
if it deems the same advisable, declare stock dividends of the unissued capital
stock of the Company.
SECTION 2. No agreement, contract or obligation (other than checks in
payment of indebtedness incurred by authority of the Board of Directors)
involving the payment of monies or the credit of the Company for more than
$10,000 dollars, shall be made without the authority of the Board of Directors,
or of the Executive Committee acting as such.
SECTION 3. Unless otherwise ordered by the Board of Directors, all
agreements and contracts shall be signed by the President and the Secretary in
the name and on behalf of the Company, and shall have the corporate seal thereto
affixed.
SECTION 4. All monies of the Corporation shall be deposited when and as
received by the Treasurer in such bank or banks or other depository as may from
time to time be designated by the Board of Directors, and such deposits shall be
made in the name of the Company.
SECTION 5. No note, draft, acceptance, endorsement or other evidence of
indebtedness shall be valid or against the Company unless the same shall be
signed by the President or a Vice-President, and attested by the Secretary or an
Assistant Secretary, or signed by the Treasurer or an Assistant Treasurer, and
countersigned by the President, Vice-President, or Secretary, except that the
Treasurer or an Assistant Treasurer may, without countersignature, make
endorsements for deposit to the credit of the Company in all its duly authorized
depositories.
<PAGE>
SECTION 6. No loan or advance of money shall be made by the Company to
any Stockholder or officer therein, unless the Board of Directors shall
otherwise authorize.
SECTION 7. No Director nor executive officer of the Company shall be
entitled to any salary or compensation for any services performed for the
Company, unless such salary or compensation shall be fixed by resolution of the
Board of Directors, adopted by the unanimous vote of all Directors voting in
favor thereof.
SECTION 8. The Company may take, acquire, hold, mortgage, sell, or
otherwise deal in stocks or bonds or securities of any other corporation, if and
as often as the Board of Directors shall so elect.
SECTION 9. The Directors shall have power to authorize and cause to be
executed, mortgages, and liens without limit as to amount upon the property and
franchise of this Corporation, and pursuant to the affirmative vote, either in
person or by proxy, of the holders of the majority of the capital stock issued
and outstanding; the Directors shall have the authority to dispose in any manner
of the whole property of this Corporation.
ARTICLE VII
AMENDMENT OF BY-LAWS
SECTION 1. Amendments and changes of these By-Laws may be made at any
regular or special meeting of the Board of Directors by a vote of not less than
all of the entire Board, or may be made by a vote of, or a consent in writing
signed by the holders of fifty-one percent (51%) of the issued and outstanding
capital stock.
KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, being the
Directors of the above-named Corporation, do hereby consent to the foregoing
By-Laws and adopt the same as and for the By-Laws of said Corporation.
IN WITNESS WHEREOF, we have hereunto set our hands this 4th day of May,
1992 .
/s/ Raymond Girard
Raymond Girard
EXHIBIT NO. 4(II)(1)
ULTRA CLEAR MANUFACTURING & DISTRIBUTING LIMITED
DEBENTURE
Holder: Stewart Lockwood
Amount: CDN$37,000
Date: November 01, 1996
Term: 31/2years ending April 30, 2000
1. Payment
ULTRA CLEAR MANUFACTURING & DISTRIBUTING LIMITED, a British Columbia
Company having its registered office at 1625-609 Granville Street, P.O.
Box 10078, Vancouver, British Columbia (hereinafter called the
"Company") will on April 30, 2000, pay to Stewart Lockwood (hereinafter
called "the Holder") on presentation of this Debenture the sum of
CDN$37,500.
2. Interest Payable
The Company during the currency of the Debenture will pay interest on
the amount of principal remaining unpaid from time to time at the rate
of interest of TEN PERCENT (10%) per annum calculated annually both
before and after default. The Company will pay interest at the
aforesaid rates on overdue interest. Interest shall be paid on the last
day of each and every quarter, beginning April 30, 1997, or on such
other later date as may be agreed to by the Holder. The Holder reserves
the right to appropriate all payments made by the Company whether on
account of principal or interest or both in such manner as the Holder
shall determine.
3. Conversion
The Holder may, at its sole option, at any time during the Term of the
Debenture or at the end of the Term, convert into common shares of the
Company, at a deemed price of $0.30 per share, any or all principal
and/or interest owing to the Holder under this Debenture. Delivery of
the common shares owing under the above formula shall be full and final
settlement of any amount so converted. The Holder may exercise its
right to convert as long as any principal or interest remains
outstanding. To convert the Holder shall complete the Form of
Conversion as set out in Schedule "A" and forward it to the Company as
set out in paragraph 10 herein.
4. Repayment
The Company shall have the right at any time prior to payment in full,
without notice or bonus, to repay the whole balance of the principal
monies remaining unpaid hereunder or any part thereof together with
interest as provided herein up to the date or dates of such payment or
payments.
5. Holders Representations, Warrants and Covenants The Holder
acknowledges, warrants and represents to, and covenants with, the
Company that, as of the Closing Date:
1. The Holder acknowledges that any Shares issued on conversion
of the Debenture (the "Securities") are to be held for a
minimum period of twelve (12) months from the date of
advancement of funds for the Debenture;
2. The Holder further acknowledges that resale of the Securities
will be restricted beyond the time set out above if:
the Company is in default under any requirements of
the Securities Act (British Columbia) or its
regulations; the Holder is, or subsequently becomes,
a control person within the meaning of the Securities
Act (British Columbia) or its regulations; an unusual
effort is made to prepare the market or create a
demand for the Securities; or an extraordinary
commission or consideration is paid in respect of the
trade; and
<PAGE>
3. The Holder agrees not to resell any of the Securities if any
of the above conditions pertain. The Holder agrees to perform
diligent enquiry as to the application of any of the
conditions prior to reselling any of the Securities;
4. The Holder is aware that no prospectus has been prepared or
filed by the Company with any securities commission or similar
authority in connection with the Offering, and that:
5. The Holder may be restricted from using most of the civil
remedies available under applicable securities legislation;
6. The Holder may not receive certain information and the Company
is relieved from certain obligations that would otherwise be
required to be given if a prospectus were provided under
applicable securities legislation in connection with the
Offering;
7. The Holder acknowledges that the issuance of this Convertible
Debenture to a Holder who is not resident in British Columbia
other than by prospectus will be subject to resale
restrictions imposed under the laws of the jurisdiction in
which such Holder is resident, in addition to the 12 month
hold period imposed by the Securities Act;
8. The Holder undertakes to file a report in the form required by
the Securities Act (British Columbia) and its regulations, as
required, within 10 days of the resale of any of the
Securities;
9. The Holder will comply with applicable provisions of the
Securities Act and any other relevant securities legislation
concerning the purchase of and holding of the Securities and
concerning any resale of the Securities;
10. No person has made to the Holder any written or oral
representations: that any person will resell or
repurchase the Securities;\ that any person will
refund the purchase price of the Securities; as to
the future price or value of the Securities; or that
the Securities will be listed and posted for trading
on a stock exchange or that application has been made
to list and post the Securities for trading on a
stock exchange;
11. The Holder agrees to indemnify the Company for any loss
directly or indirectly to the Company caused by:
a misrepresentation or breach of any covenant or
agreement contained in section 5 herein; and a breach
of any restrictions contained in the Securities Act
(British Columbia) or its regulations and the
regulations of the British Columbia Securities
Commission by the Holder;
12. The Holder is not purchasing the Securities as a result of
advertisement in printed media of general and regular paid
circulation, radio or television;
13. The Holder has no intention to distribute either directly or
indirectly any of the Securities in the United States or to
"U.S. Persons" (as defined in Regulation S under the 1933 Act,
which definition includes an individual resident in the United
States and an estate or trust of which any executor or
administrator or trustee is a U.S. Person).
<PAGE>
6. Location
The principal monies and interest payable hereunder and hereby secured
shall be payable at the offices of the Holder referenced to in
paragraph 10 hereof or at such other place as the Holder may in writing
from time to time direct.
7. Creation of Mortgage and Charge
As security for payment of the amount of principal and interest and
interest on overdue interest from time to time owing to the Holder and
all other monies which may become payable hereunder and all advances
and re-advances from time to time and for the performance of the
obligations and the covenants of the Company herein contained the
Company HEREBY GRANTS, MORTGAGES AND CHARGES by way of a fixed and
specific mortgage and charge to and in favour of the Holder the
machinery and equipment described in Schedule "B" attached hereto,
including any greater right, title and interest therein or any part
thereof which the Company may acquire and hold during the currency of
the Debenture after the date hereof, AND THE COMPANY ALSO CHARGES to
and in favour of the Holder as any by way of a floating charge all of
its property, assets, effects and undertaking both present and future
of whatsoever kind and wheresoever situate, including, without limiting
the generality of the foregoing, its business, goodwill, uncalled
capital, chattels, book accounts, rents, revenue, inventory, incomes,
monies, credits, policies and notes. The Company shall not, save as
hereunder provided, grant any mortgage of or create any charge, lien or
encumbrance on the property for the time being subject to the charge
hereby granted ranking in priority to or pari passu with the Debenture.
It is hereby declared that until the security of the Debenture shall
become enforceable and the Holder shall determine to enforce the same,
the creation and existence of the floating charge shall in no way
hinder or prevent the Company from:
a) borrowing from its banker upon the security of its book debts,
inventory, contracts or other agreements or mercantile
documents or any other property of the Company such sum or
sums of money as may from time to time be necessary in the
ordinary course of its business and for the purpose of
carrying on or extending the same;
b) pledging, assigning or giving security on its assets to its
bank under the "Bank Act";
c) assuming or granting any obligation, mortgage, or charge on
any property acquired after the date hereof, to secure the
whole or any part of the purchase price to be paid for such
property.
The Company shall not, without the written consent of the Holder sell
or dispose of any of the property subject to the floating charge
otherwise than in the ordinary course of its business.
8. Lease
The last day of any term created by any lease or agreement therefor is
hereby excepted out of the charge created by this Debenture but the
Company shall stand possessed of the reversion thereby remaining in the
Company upon trust for the Holder to assign and dispose of as the
Holder shall by notice in writing direct.
9. Further Conditions
This Debenture is issued subject to and with the benefit of the
Conditions attached hereto, each and all of which form part of this
Debenture.
10. Notice Provisions
Any notice to the Company in connection with this Debenture
shall be well and sufficiently given if sent by prepaid
registered mail or delivered or faxed to both of the Company's
offices addressed as follows:
Ultra Clear Manufacturing & Distributing Limited
800-850 West Hastings Street
Vancouver, B.C. V6C1E1
Att: S. Lockwood Fax (604) 685-9700
AND TO:
Ultra Clear Manufacturing & Distributing Limited
Unit 300-34252 Marshall Road
Abbotsford, B.C. V2S 1L9
Att: W. Lowes Fax (604)556-0253
<PAGE>
Any such notices shall be deemed to have been given if delivered or
faxed, when delivered or faxed, and if mailed, on the fourth business
day following that on which it was mailed.
11. Any notice to the Holder in connection with this Debenture shall be
well and sufficiently given if sent by prepaid registered mail or
delivered to the Holder addressed as follows:
Stewart Lockwood
800-850 W. Hastings
Vancouver, B.C.
604 695-9744
Any such notice shall be deemed to have been given if delivered or
faxed, when delivered or faxed, and if mailed, on the fourth business
day following that on which it was mailed.
12. In the event of a known interruption of postal services any notice
required or contemplated herein shall be deemed to have been delivered
to the Company if delivered by hand to the registered office of the
Company and to the Holder if delivered by hand to the address of the
Holder set forth herein.
Executed on the 1st day of November, 1996.
Signed and delivered in the ) Ultra Clear Manufacturing &
presence of: ) Distributing Limited
)
)
__________________________________ ) Per: /s/ Bradley T. Aelicks
Witness ) (Authorized Signatory)
)
Signed and delivered in the )
presence of: ) Stewart Lockwood
______________________________________ ) /s/ Stewart Lockwood
Witness ) Signature/Authorized
Signatory of Debenture Holder
CONDITIONS REFERRED TO IN THE WITHIN DEBENTURE
1. In this Debenture, unless there is something in the subject matter or
context inconsistent therewith "Mortgaged Property" means all the
undertaking, and other property and assets of the Company of whatsoever
kind and wheresoever situate, hereby granted, conveyed, assigned,
transferred, mortgaged, pledged or charged or intended so to be, by way
of fixed or floating charge as security for the payment of the monies
hereby secured.
2. This Debenture is issued in accordance with the resolution of the
Directors of the Company and all other matters and things have been
done and performed so as to authorize and make the execution, creation
and issue of this Debenture legal and valid and in accordance with the
requirements of the laws relating to the Company and all other statutes
and laws in that behalf.
3. This Debenture:
<PAGE>
(a) shall be and shall remain valid security for any and all subsequent
advances or re-advances by the Holder to the Company to the same extent
as if made at the time of issue of the Debenture;
(b) when redeemed by the Company shall be canceled and shall not be
re-issued but any partial payment made on the Debenture by the Company
to the Holder shall be deemed not to be a cancellation pro tanto;
(c) shall not be deemed to have been redeemed by reason only of the account
of the Company with the Holder having ceased to be in debt.
4. The Company shall at all times during the currency of the Debenture:
(a) insure and keep insured against fire to its full insurable value the
Mortgaged Property and in addition shall insure against all risks
usually insured against by persons carrying on a business similar to
that of the Company;
(b) maintain and keep in good condition and repair the Mortgaged Property.
5. The principal, interest and other monies hereby secured shall become
immediately payable and the security hereby constituted shall become
enforceable in each and every of the following events:
(a) if the Company makes default in the observance or performance of
something hereby required to be done or some covenant or condition
hereby required to be observed or performed, including the covenants
contained in paragraphs 1 and 2 of the within Debenture;
(b) if an order is made or a resolution passed for the winding-up of the
Company or if a motion is filed for the winding-up of the Company;
(c) if the Company becomes insolvent or makes a voluntary assignment or
proposal or bulk sale of its assets or if a bankruptcy petition is
filed or presented against the Company;
(d) if any execution, sequestration, extent or any other process of any
Court becomes enforceable against the Company or if a distress or
analogous process is levied upon the property of the Company or any
part thereof;
(e) if the Company shall permit any sum which has been admitted as due by
it or is not disputed to be due by it and which forms or is capable of
being made a charge upon any of the property subject to the charge
created by this Debenture to remain unpaid for thirty (30) days after
proceedings have been taken to enforce the same as such prior charge;
(f) if the Company ceases or threatens to cease to carry on its business or
commits or threatens to commit any action of bankruptcy;
(g) if the Company makes default in payment of any indebtedness or
liability to the Holder, whether secured hereby or not, when due;
(h) if the Company without the prior consent in writing of the Holder,
authorizes the purchase by the Company of any of its shares;
(i) if the Company carries on any business that it is restricted from
carrying on by its Memorandum or Articles;
(j) if the Company changes directly or indirectly effective management or
control by any sale, encumbrancing or other disposition of shares or
otherwise howsoever without the written consent of the Holder;
6. The security of the Debenture shall become enforceable if the principal
monies thereby secured shall not be paid when the same becomes due and
payable in accordance with the provisions of the Debenture.
<PAGE>
7. At any time after the principal monies secured by the Debenture shall
have become payable and remain unpaid the Holder may appoint by writing
a Receiver-Manager of the Mortgaged Property and may from time to time
remove any Receiver-Manager so appointed and appoint another in his or
her stead.
8. A Receiver-Manager so appointed shall be an officer of the Company and
shall have power:
(a) to take possession of an get in the Mortgaged Property;
(b) to carry on or concur in carrying on the business of the Company;
(c) to sell or concur in selling the Mortgaged Property or any part or
parts thereof;
(d) to make any arrangement or compromise which the Receiver-Manager shall
think expedient;
(e) to borrow money for the purposes of carrying on the business of the
Company or for the maintenance of the property and assets of the
Company or any part or parts thereof, in such sum as will, in the
opinion of the Receiver, be sufficient for obtaining upon the security
of such property and assets the amounts from time to time required and
in so doing the Receiver may issue certificates (herein called
"Receiver's Certificates") and such certificates may be payable either
to order or to bearer and may be payable at such time or times as the
Receiver may think expedient and shall bear interest as shall be stated
therein and the amounts from time to time payable by virtue of such
Receiver's Certificates shall form a charge upon the property and
assets of the Company in priority to the charge of this Debenture. The
rights and powers conferred by this paragraph are in supplement of and
not in substitution for any rights the Holder may from time to time
have as the holder of the Debenture. The term "Receiver" as used in the
paragraph includes a Receiver-Manager.
The net profits of carrying on the said business and the net proceeds of the
sale shall be applied by the Receiver-Manager subject to the claims of all
secured and unsecured creditors (if any) ranking in priority to this Debenture:
FIRSTLY: In payment of all costs, charges and expenses of an incidental to the
appointment of the Receiver-Manager and the exercise by him of all or any of the
power aforesaid including the reasonable remuneration of the Receiver-Manager
and all outgoings properly payable by him;
SECONDLY: In or toward payment to the Holder of all arrears of interest
remaining unpaid on this Debenture;
THIRDLY: In or toward payment to the Holder of all arrears of principal
remaining unpaid on this Debenture;
FOURTHLY: Any surplus shall, subject to the rights of other creditors, be paid
to the Company.
The Holder shall be under no liability to the Receiver-Manager for his
remuneration, costs, charges or expenses or otherwise.
9. To enable the Receiver-Manager to exercise the powers granted to him by
paragraph 8 of these Conditions, the Company hereby appoints the
Receiver-Manager to be its attorney to carry out any sale of any of the
Mortgaged Property and to affix the common seal of the Company to any
deeds, transfers, conveyances, assignments, assurances and things which
the Company ought to execute to complete any sale of any of the
Mortgaged Property or alternatively to execute the same under his own
seal by conveying in the name of and on behalf of the Company and under
his own seal and any deed or other instrument signed by him under his
seal pursuant hereto shall have the same effect as if it were under the
common seal of the Company.
<PAGE>
10. The Company may at any time or times pay the whole or any part of the
principal monies secured by this Debenture upon payment of accrued
interest to date of payment.
11. The expression "the Holder" as used herein shall include the Holder's
assigns whether immediate or derivative and any appointment or removal
under paragraph 7 hereof may be made by writing, signed or sealed by
any such assigns and the expression "the Company" used in this
Debenture shall include the successors and assigns of the Company.
12. The security hereby created is a continuing security and shall cover
and secure the payment of all and every indebtedness both present and
future and interest thereon and interest on overdue interest and all
and every liability, present or future, direct or indirect, absolute or
contingent, of the Company to the Holder and is in addition to and not
in substitution for any other security or securities which the Holder
now or form time to time may hold or take from the Company.
13. The Company shall from time to time at the request of the Holder create
in favour of the Holder a specific charge or charges upon any property
or properties acquired by it subsequent to the date of this Debenture.
14. The Company shall assume and pay all legal and other fees and
disbursements relating to the creation of this Debenture and its
registration in all proper offices of record.
15. The Holder may waive any breach by the Company of any of the provisions
of this Debenture or any default by the Company in the observance or
performance of any covenant or condition required to be observed or
performed by the Company under the terms of the Debenture; provided
always that no act or omission of the Holder in the premises shall
extend or be taken in any manner whatsoever to affect any subsequent
breach or default or the rights resulting therefrom.
16. The Company will at all times from time to time, at the request of the
Holder, do and execute or cause to be done and executed all things
reasonably required for the better assuring the Holder a valid charge
over the Mortgaged Property charged or intended so to be or which the
Company may hereafter become bound so to mortgage and charge.
17. The Holder may at its option advance monies in order to preserve or
protect the Mortgaged Property and any monies so advanced shall be
payable by the Company to the Holder on demand and while unpaid shall
be added to the monies hereby secured and shall bear interest and
interest on overdue interest payable at the times and at the rate of
interest set forth in this Debenture or if more than one rate of
interest is so set forth, at the higher or highest of said rates of
interest.
Schedule A
FORM OF CONVERSION NOTICE
I, Stewart Lockwood, as Holder under the Debenture Dated November 1,
1996, between myself and Ultra Clear Manufacturing & Distributing Limited (the
"Company"), hereby elect to exercise the conversion rights (the "Conversion")
granted to me pursuant to paragraph 3 of the Debenture with respect to the
following amounts:
Principal Debt of:
CDN$_____________
Interest from ___________ to _________________;
CDN$_____________
____________________________________________________________________
Total Amount Converted:
CDN$_____________
<PAGE>
Converted at $0.30 per share into _____________________ Common Shares (the
"Common Shares") of the Company.
In connection with this exercise of the Conversion and the purchase of
the Common Shares, I hereby represent and agree as follows:
(a) I am a director, officer or employee of the Company and have not been
induced to purchase the Common Shares by expectation of employment or
continued employment or I am a `sophisticated investor' as defined in
the B.C. Securities Act, have received and read the related Offering
Memorandum and have completed a Form 20A;
(b) I am purchasing the Common Shares as principal for my own account for
investment purposes, and not with a view to the distribution or resale
thereof to the public;
(c) I will, prior to an upon any eventual sale or disposition of the Common
Shares, comply with the Securities Laws and any other federal,
provincial or state laws or regulations to the extent that such laws or
regulations are applicable to such sale or disposition; and
(d) I will not offer, sell or deliver any of the Common Shares, directly or
indirectly, in the United States or to any citizen or resident of, or
any corporation, partnership or other entity created or organized in or
under the laws of the United States, or an estate or trust the income
of which is subject to United States federal income taxation regardless
of its source, except in compliance with United States federal and
security laws.
Stewart Lockwood
Dated: November 1, 1996 /s/ Stewart Lockwood
Signature/Authorized Signatory
SCHEDULE "B"
ULTRA CLEAR EQUIPMENT/ASSET LIST
<TABLE>
<CAPTION>
Est.
Value*$
- -------------------------------- ------------------------------------------------------------- ---------------------
<S> <C> <C>
CALGARY: 1985 FORD 8000 S/A TANK TRUCK 2400 28,000
GAL. CAP.
TANK FOAM AND DYKE 25,000
PUMPS AND MIXING SYSTEM 5,000
OFFICE EQUIPMENT 2,000
- -------------------------------- ------------------------------------------------------------- ---------------------
EDMONTON: 1984 FORD 8000 S/A TANK TRUCK 2300 20,000
GAL. CAP.
TANKS AND MIXING SYSTEM 7,000
OFFICE EQUIPMENT 1,000
UTILITY TRAILER 1,000
- -------------------------------- ------------------------------------------------------------- ---------------------
VANCOUVER/ 1991 FORD 8000 S/A TANK TRUCK 2300 18,000
CLOVERDALE: GAL. CAP.
TANKS AND MIXING SYSTEM 5,000
TOOLS AND EQUIPMENT 1,000
- -------------------------------- ------------------------------------------------------------- ---------------------
ASSETS/ SHARE OWNERSHIP LA COMPAGNIE
SECURITIES: ULTRA-CLAIR (when complete) 194,000+
- -------------------------------- ------------------------------------------------------------- ---------------------
*These are estimates only based on purchase
price and depreciation and may not reflect fair
market value.
- -------------------------------- ------------------------------------------------------------- ---------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE "C"
ADDITIONAL DEBENTURES
HOLDER AMOUNT DATE TERM
<S> <C> <C> <C>
Bradley Aelicks $100,000 November 1, 1996 3 1/2years
Bradford Cooke $ 25,000 November 1, 1996 3 1/2years
Ken Freida $100,000 November 1, 1996 3 1/2years
Stibor Family Trust $ 25,000 November 1, 1996 3 1/2years
Wayden Transportation, Inc. $ 60,000 November 1, 1996 3 1/2years
</TABLE>
EXHIBIT NO. 4(II)(2)
SUBSCRIPTION AGREEMENT
AR Associates, Inc.
Board of Directors
P.O. Box 38
Sumas, WA 98295
Dear Board of Directors:
The undersigned hereby subscribes to purchase 11,818,182 shares of the Common
Stock, $0.001 par value, of AR Associates, Inc. (the "Company"), a Nevada
corporation (such number of shares hereinafter collectively referred to as the
"Shares"), and agrees to pay therefor the sum of $0.0076 per share, for a total
purchase price of US$89,819.00. Such amount is to be paid in full at the time of
subscription and a check for the appropriate amount is tendered herewith.
The undersigned acknowledges having received copies of all documents and any
other information requested from the Company. Further, the undersigned has had
an opportunity to ask questions of and receive answers from the management of
the Company concerning the terms and conditions of the offering and to obtain
any additional information desired or has elected to waive such opportunity. The
undersigned also acknowledges that the purchase of the Shares is a highly
speculative investment and recognizes that the Company has made and makes no
assurance whatever concerning the present or prospective value of the Shares.
The undersigned understands that the Shares have not been registered (i) under
the Securities Act of 1933, as amended (the "Act"), on the ground that the
Company believes the transaction is exempt from registration under the Act by
virtue of the provisions of Sections 3(b) or 4(2) thereof, or (ii) under the
securities laws of the state in which the undersigned resides on the basis that
the transaction is exempt from registration under said laws. The undersigned
understands that the Company's reliance upon the foregoing exemptions is
predicated in part on the representations of the undersigned contained herein.
By signing this Subscription Agreement, the undersigned agrees with and
represents and warrants to the Company that:
A. The undersigned is acquiring the Shares subscribed for hereby
for the account of the undersigned and not on behalf of any
other person or persons and is purchasing the Shares for
investment purposes and not for resale or other distribution.
B. The undersigned has sufficient net worth or recurring income,
or both, that the undersigned could afford the loss of the
entire investment in the Shares.
C. The Shares may not be sold, transferred, assigned or otherwise
disposed of except pursuant to an effective registration
statement, or upon receipt of an opinion of counsel
satisfactory to the Company that the transfer is exempt from
registration under the applicable state and federal securities
laws. The undersigned further agrees that the Company shall
have the right to issue stop-transfer instructions to its
transfer agent until such time as sale is permitted under the
Act and acknowledges that the Company hereby informs the
undersigned of its intention to issue such instructions.
D. The undersigned has been informed by the Company that it
does not intend, nor is it obligated now or at any future
date, to register the Shares purchased hereunder under either
state or federal securities laws, however, the Company fully
intends to comply with its reporting obligations under Section
13 and Section 15(d) of the Securities Exchange Act 1934 which
may satisfy the informational requirements of Rule 144 under
the Securities Act of 1933, which allows for the resale of
unregistered securities in certain situations.
<PAGE>
E. The undersigned understands that the undersigned may be
forced to bear the economic risk of this investment for an
indefinite period of time because the Shares have not been
registered and, therefore, cannot be sold unless they are
subsequently registered or an exemption from such registration
is available.
F. The undersigned acknowledges that the undersigned has had
an opportunity to ask questions of and receive answers from
duly designated representatives of the Company concerning the
finances of the Company and the proposed business plan of the
Company.
INSTRUCTION: If the subscriber meets any of the qualifications set forth in
paragraph (G) below, check the box next to that paragraph. All subscribers,
whether or not meeting any of the qualifications of paragraph (G), should read
paragraph (H) and check the box next to that paragraph if they qualify under its
provisions. The subscriber agrees to make available any information requested by
the Company to confirm such qualifications. This information is required in
order for the Company to determine the number of persons to whom it may sell
securities and the applicable exemption from registration.
G. The undersigned is an "Accredited Investor" within the
meaning of Rule 501 under the Act in that:
(i) The undersigned is a director or executive officer of
the Company; or
(ii) The undersigned has an individual net worth, or joint
net worth with his or her spouse, which exceeds
$1,000,000 as of the date of signature hereof; or
(iii) The undersigned had individual income exceeding
$200,000 in each of the two most recent years or
joint income with his or her spouse exceeding
$300,000 in each of the two most recent years and has
a reasonable expectation of reaching the same income
level in the current year; or
(iv) The undersigned is a private business development
company as defined in section 202(a)(22) of the
Investment Advisers Act of 1940; or
(v) Other ____________________.
H. The undersigned meets certain minimum investor
qualifications in that:
(i) The undersigned has such knowledge and experience in
financial matters that the undersigned is capable of
evaluating the merits and risks of an investment in
the Shares.
(ii) The undersigned has sufficient net worth or recurring
income, or both, that the undersigned could afford
the loss of the entire investment in the Shares.
(iii) The undersigned understands that the undersigned must
bear the economic risk of this investment for an
indefinite period of time because the Shares have not
been registered and, therefore, cannot be sold unless
they are subsequently registered or an exemption from
such registration is available.
(iv) The investment is suitable for the undersigned upon
the basis of facts, if any, disclosed by the
undersigned as to the undersigned's other security
holdings, financial situation, and needs. For the
purpose of this condition only, it may be presumed
that if the investment does not exceed 10% of the
undersigned's net worth, it is suitable.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
Type of Ownership Sought for Stock Certificate Issuance (check one)
X Individual Ownership Joint Tenant with Right of
Survivorship (both parties
must sign)
Tenants in common Other (please specify)
(both parties must sign)
Dated: March 31, 1999
/s/ Hal Klyne
Hal Klyne
This Subscription Agreement is accepted as of this 31st day of March , 1999.
AR Associates, Inc.
/S/
BY:
ITS:
<PAGE>
SCHEDULE"A"
OTHER RECIPIENTS UNDER SUBSCRIPTION AGREEMENT
Share Recipient And Address Number Of Shares To Be Issued
Rod Benjamin 11,818,182
John Newman 11,818,182
Melinda Newman 11,818,182
Matt Bone 11,818,182
Dean Porter 11,818,182
Ross Holtem 11,818,182
Bruce Klyne 11,818,182
Villeneuve Freres S.A. 11,818,182
Ian Munson 11,818,182
Dan Anderson 11,818,182
EXHIBIT NO. 10(I)(B)
THIS AGREEMENT made this 12th day of May, 1992.
BETWEEN:
LA COMPAGNIE ULTRA CLAIR INC., legally incorporated
company having its place of business at 8425 rue
Granache, Anjou, Province of Quebec, H1J 1C7,
represented in due form by Mr. Luc Marion, its duly
authorized representative. (hereinafter referred to
as "Ultra")
AND:
CRYSTAL GREEN RESOURCES INC., a company incorporated
under the laws of the Province of British Columbia
and having its principle office at 38 - C 19926 96th
Avenue, Langley, Province of British Columbia, V3A
4P8, and its registered and records office located at
P.O. Box 10078 - Pacific Centre, 1625 - 609 Granville
Street, in the City of Vancouver, in the Province of
British Columbia V7Y 1B6 (hereinafter referred to as
"Licensee")
OF THE SECOND PART
WHEREAS: Ultra has invested time, effort and money in order to acquire
its particular experience, skill and know-how in the
manufacturing, implementing and operation of a special glass
cleaner and glass cleaning liquid distribution system
Ultra holds sole rights of ownership of certain brand names
and trademarks.
Ultra holds copyrights on the design and industrial drawings
for certain CONCEPTS and objects.
The Licensee wishes to promote the Ultra CONCEPT, brand names,
trademarks and products in the Provinces of British Columbia,
and Alberta, in Canada ("Licensee's TERRITORY").
Licensee wishes to undertake the creation of a network of
licensees within the Licensee's TERRITORY in accordance with
the terms and provisions of this Agreement.
NOW THEREFOR THIS AGREEMENT WITNESSETH that in consideration of the premises and
of the mutual covenants and agreements herein contained, and for other
considerations acknowledged by the parties to be of good and sufficient value,
the parties covenant and agree as follows:
1.0 DEFINITIONS
1. In the present Agreement, except where the text requires a different
interpretation, the parties agree that the following words will have
the meanings defined below:
a. "CONCEPT" means the whole procedures, methods,
information, standards, criteria, ways of planning,
management programs and designs which were
elaborated, conceived, created or developed or which
might, in the future, be elaborated, conceived,
created or developed by or for the parties to the
present with respect to the manufacture and
operation, identified or not under RESERVED RIGHTS,
for glass cleaning liquid using certain methods and
business secrets and having a special inside and
outside appearance, as well as equipment, interior
and exterior accessories, signs, products, services,
standards and specifications developed by or for the
parties to this Agreement.
<PAGE>
b. "RESERVED RIGHTS" means all rights and interests of
any kind whatsoever in the designations, brand names
and trademarks and including and without restricting
the generality of the above, all and each of the
trademarks and/or works covered by copyrights and/or
registered or unregistered trademarks and/or works,
business secrets, and/or names, symbols, commercial
logos and/or slogans and, particularly but without
restricting the generality of the above, the
trademarks ULTRA CLEAR and ULTRA KLEEN which Ultra
developed and used and will continue to use or
control, even if it has not yet started using it.
1.1.3 TERRITORY see Appendix "A'`.
2.0 GRANT
2.1 Ultra hereby grants to the Licensee a licence and franchise to operate as a
vendor and distributor of Ultra's products which products are those as listed
and attached hereto as Appendix "B". Further, subject to the restrictions
contained within this Agreement, the Licensee shall be permitted to utilize
Ultra's CONCEPT and RESERVED RIGHTS including Trademarks, trade name, copyright
materials, confidential information on operating format, systems, techniques and
procedures as embodied in Ultra's operations and other manuals, merchandising,
advertising and training methods and materials, accounting and reporting forms
and procedures at or from facilities operated by the Licensee upon the terms and
conditions of this Agreement and any ancillary documents relating hereto and
incorporated herein by reference.
3.0 TERRITORIAL PROTECTION
3.1 So long as the Licensee is not in default of this Agreement, Ultra shall
not, during the term of this Agreement, own, operate itself or licence any other
licensees, or permit any of its affiliates to own or operate themselves or
licence any other licensees within the TERRITORY of the Licensee as detailed and
defined in Appendix `'A".
4.0 PERMISSION TO SUBLICENSE OR TO CREATE A NETWORK OF
SUBDISTRIBUTORS
4.1 Except as provided herein, the Licensee will not, without previous written
consent from Ultra, use, employ or allow the usage or utilization for purposes
related to the operation of its business, any other brand names or trademarks,
registered or unregistered, other than those specified by Ultra. Furthermore,
any use by the Licensee of Ultra's CONCEPT, or the RESERVED RIGHTS and
information transferred by Ultra may only be made in accordance with this
Agreement.
4.2 So long as the Licensee is not in default of this Agreement, the Licensee
may create and grant to third parties the right to use in part or in total any
element of Ultra's CONCEPT or any one or all of its RESERVED RIGHTS; PROVIDED
ALWAYS that such creation or grant has received the prior written approval of
Ultra, such approval not to be unreasonably withheld.
5.0 TERM AND RENEWAL
<PAGE>
5.1 Initial Term: The parties agree that the initial term of the present
Agreement will be for FIVE (5) YEARS from the date of this Agreement.
5.2 Renewal Option: So long as the Licensee is not in default of the terms of
this Agreement, upon the Licensee delivering notice of its intention to renew,
at least THIRTY (30) DAYS prior to the expiration of this Agreement, this
Agreement shall be automatically renewed for an additional FIVE (5) YEAR TERM on
the same terms and conditions without further consideration.
6.0 FINANCIAL CONSIDERATION
6.1 The parties agree that the financial consideration in respect of the
acquisition and maintenance of this Agreement shall be as detailed in Appendix
"C".
7.0 TRADEMARKS
7.1 The Licensee acknowledges that the trademarks ULTRA CLEAR and ULTRA KLEEN
with or without pictures, are the exclusive property of Ultra who has sole
ownership, whether such trademarks be registered or unregistered with the
Trademark Registry Office.
7.2 Subject to the terms and conditions and rights granted to the Licensee in
this Agreement, Ultra may, at its sole discretion, dispose of its rights of
ownership and interest in the said CONCEPT and RESERVED RIGHTS upon providing to
the Licensee notice of its intention to do so at least NINETY (90) DAYS prior to
its disposal.
7.3 Subject to Ultra bearing the costs and agreeing to save harmless and
indemnify the Licensee in respect of its actions, Ultra may at any time, require
the Licensee to take action for the protection of Ultra's rights in respect of
its CONCEPT or RESERVED RIGHTS.
8.0 TRADEMARK PROTECTION
8.1 Ultra hereby represents and warrants to the Licensee that it owns and
controls the licensed use of the trademarks ULTRA CLEAR and ULTRA KLEEN with or
without pictures and any related trademarks adopted and used by Ultra or its
affiliates.
9.0 CONTESTATION OF RIGHTS
9.1 Except as herein contemplated and required for the enforcement of the terms
of this Agreement the Licensee agrees, for the term of this Agreement and after
its expiration or termination, not to contest, directly or indirectly, the
validity, the property, the right or interest of Ultra in each of all of its
RESERVED RIGHTS and CONCEPTS, registered and unregistered, patented or
nonpatented, procedures, methods, CONCEPTS, business secrets, techniques and
know-how which constitute in particular Ultra's CONCEPT and RESERVED RIGHTS; and
further the Licensee agrees not to dispute Ultra's exclusive right to register,
use and diffuse such rights described above as long as such actions by Ultra are
not in contravention of the terms and conditions, warranties and covenants as
contained in this Agreement.
10.0 NATURE OF GRANT
10.1 The licence granted hereby is a licence only, upon the terms and conditions
contained herein. Nothing herein shall give the Licensee any right, title or
interest in or to the said Trademarks, trade name, systems, methods of
operation, format CONCEPTS and RESERVED RIGHTS and the good will thereof. Upon
the expiration or termination of this Agreement for any reason, the Licensee
shall deliver and surrender up to Ultra each and all operations and other
manuals, advertising material, training materials, trademarks, and trade names,
and the Licensee shall not thereafter use any of the same, and the Licensee
hereby acknowledges and agrees that the ownership of all such items is and shall
at all times remain vested in Ultra and its affiliates.
<PAGE>
11.0 REGISTERED USER
11.1 The Licensee covenants and agrees to execute, upon the request of Ultra,
the appropriate form of application for registration of the Licensee as a
Registered User of the RESERVED RIGHTS and Ultra agrees to cause the same to be
registered at the Canadian Trademarks Office and to provide the Licensee with
registration particulars; provided, however, that the Licensee, if requested by
Ultra, shall pay all filing fees required to be paid in order to achieve such
registration forthwith upon receipt of Ultra's invoice therefor.
12.0 ACTS IN DEROGATION OF ULTRA'S RIGHTS
12.1 The Licensee acknowledges, covenants and agrees that all good will and
ownership rights arising out of the use by the Licensee of the RESERVED RIGHTS
and CONCEPT, methods of operation, format and the good will thereof pursuant to
this Agreement and any adaptations thereof designated or approved by Ultra in
writing from time to time shall accrue solely to Ultra, and that now and
hereafter the Licensee shall assert no claim to any good will or ownership of
same by virtue of the licensed use thereof, nor will it dispute or impugn the
validity of same or the rights of Ultra thereto, or do or assist others to do or
permit any act or thing to be done in derogation of same.
12.2 The Licensee acknowledges that by reason of the unique nature of Ultra's
systems, methods of operation and format of the licensed business and Ultra's
aforesaid property rights and by reason of the Licensee Is knowledge of and
association with the licence business during the term hereof, the aforesaid
covenants, both during the term of this Agreement and thereafter, are reasonable
and commensurate for the protection of the legitimate business interests of
Ultra, its affiliates and its other licensees.
13.0 PRODUCT DEVELOPMENT
13.1 Ultra will provide to the Licensee the benefits of its continuing efforts
toward development and testing of new products for sale and new marketing and
merchandising techniques for use by the Licensee.
14.0 TRAINING
14.1 Ultra agrees that it is its intention to use its best efforts and abilities
to assist the Licensee in establishing and maintaining its business in
accordance with the granting of the license herein.
14.2 Ultra agrees to provide to the Licensee:
14.2.1 A written marketing plan and resource
manual;
14.2.2 Assistance to the Licensee in negotiating
with major oil companies;
14.2.3 A minimum of FOUR (4) VISITS per year at the
request of and convenience to the Licensee
with each visit contemplated to be not less
than TWO (2) FULL, WORKING DAYS in duration
and with the expense of those visits to be
borne by Ultra; and
14.2.4 Unlimited phone access and support to the
Licensee.
15.0 OPENING SUPERVISION AND CONTINUING PROMOTIONAL ASSISTANCE
<PAGE>
15.1 Ultra agrees that to assist the Licensee in the establishment of the
business contemplated by the granting of this license it will provide to the
Licensee, at the expense of Ultra, a knowledgeable management personnel to
assist the Licensee in the establishment of its operation with this person to be
provided by Ultra at the expense of Ultra for a period of not less than ONE (1)
FULL WORKING WEEK on a one time occasion at the request of and the convenience
to the Licensee.
15.2 Ultra shall supply at its expense, as opening promotional materials, ONE
THOUSAND (1,000) `'Ultra Clear full colour brochures".
16.0 CONTINUING AVAILABILITY
16.1 Ultra shall continue to be available at all times, during normal business
hours, at the home office of Ultra for consultation and guidance of the Licensee
at no charge with respect to the operation and management of the licensed
TERRITORY.
17.0 CONSISTENCY OF STANDARDS
17.1 Ultra covenants to apply such high standards as it deems proper and to the
best of its ability in its selection of licensees, and of management personnel
for its company owned Ultra operations, and in its supervision of operations of
all Ultra licensees and operations in order to establish and maintain uniformly
high standards of operation, reputation and image among all Ultra licensees and
operations.
18.0 CONFIDENTIAL INFORMATION
18.1 The Licensee acknowledges that the materials, information, techniques,
procedures and methods now and hereafter provided and/or revealed to it pursuant
to this Agreement are revealed in strict confidence and the Licensee expressly
covenants and agrees to keep and respect the confidence so reposed. The Licensee
shall not use for any purpose inconsistent with this Agreement or revealed to
any person, firm or corporation, while this Agreement is in force or thereafter,
any such confidential information which the Licensee has acquired through or as
a result of its relationship with Ultra hereunder including, but without
limitation, the contents of the operations manual and other manuals of Ultra.
19.0 DEFAULT BY THE LICENSEE
19.1 Ultra may terminate this Agreement, prior to its expiration, and
notwithstanding the provisions of this Agreement, only on account of a material
breach of this Agreement by the Licensee. As used herein, the phrase MATERIAL
BREACH shall mean:
19.1.1 FAILURE to pay any sums of money due to
Ultra within the terms of credit extended by
Ultra to the Licensee for a period of TEN
(10) DAYS after written notice of such
default shall be delivered to the Licensee
by Ultra; or
19.1.2 Failure to comply with any other obligations
of the Licensee pursuant to this Agreement
for a period of THIRTY (30) DAYS after
written notice of such default shall be
delivered by Ultra to the Licensee;
provided, however, that if the nature of
such default shall be such that it cannot be
cured within the said thirty day period, the
Licensee shall immediately commence to cure
such default and shall continue to proceed
diligently to do so, the Licensee shall have
such additional and reasonable period of
time, not exceeding an additional SIXTY (60)
DAYS, as may be reasonably necessary to cure
such default.
<PAGE>
19.1.3 In the event that the Licensee shall become
insolvent (as revealed by its books and
records or otherwise) or make an assignment
in bankruptcy or become subject to the
provisions of the Winding Up Act, the
Companies Creditor Arrangement Act, the
Bankruptcy Act, including, but without
limitation, if any composition, arrangement
or proposal under the bankruptcy law shall
be entered into or filed by or against it,
or if a petition into bankruptcy is filed
against the Licensee and is consented to or
not dismissed within TEN (10) DAYS, or if a
Receiver, Receiver Manager or Trustee in
Bankruptcy or similar officer, temporary or
permanent, shall be appointed to take charge
of its property; or if dissolution
proceedings shall be commenced by or against
the Licensee or if the Licensee shall go
into liquidation, either voluntarily or
under an order of a court of competent
jurisdiction, or if it shall make a general
assignment for the benefit of its creditors
or otherwise acknowledge its insolvency; or
if the Licensee shall sell or purport to
sell or transfer or otherwise lose
possession or its ownership or control of
all or a substantial part of its assets used
in the licensed business.
19.1.4 If the Licensee shall intentionally falsify
or misrepresent or misstate to Ultra its
gross sales or other financial statements,
reports or information required pursuant to
this Agreement.
20.0 REMEDIES
20.1 In the event of a MATERIAL BREACH of this Agreement:
20.1.1 Ultra may, at its election, bring such
action for injunctive or other similar
relief as may be necessary to compel the
Licensee to comply with its obligations
hereunder;
20.1.2 Ultra may at its election and without
waiving any claims for default or breach
hereunder and without prior notice to the
Licensee, take whatever steps it deems
necessary to cure any default or breach of
the Licensee hereunder or under any related
instrument or agreement, for the account of
and on behalf of the Licensee, and the
Licensee hereby irrevocably appoints Ultra
its attorney-in-fact so to do, and the cost
thereof to Ultra shall be due and payable
forthwith by the Licensee upon demand and
shall be deemed to be additional
remuneration owing to Ultra by the Licensee;
20.1.3 The rights and remedies of Ultra hereunder
are accumulative and no exercise or
enforcement by Ultra of any right or remedy
hereunder shall preclude the exercise or
enforcement by Ultra of any other right or
remedy hereunder or which Ultra is otherwise
entitled by law or equity to enforce.
21.0 LIQUIDATED DAMAGES
21.1 In the event of termination of this Agreement it is understood and agreed
between the parties that Ultra shall suffer damages if the Licensee does not
discontinue forthwith its use of the Ultra CONCEPT and RESERVED RIGHTS and that
in addition to any other remedy provided for hereunder or available to Ultra at
law or equity, Ultra shall have the right to claim and recover damages from the
Licensee for such failure to discontinue.
21.2 It is agreed by the parties that for each day subsequent to such
termination that the Licensee operates his business without having complied with
the aforesaid obligations to discontinue, the sum of ONE THOUSAND ($1,000.00)
DOLLARS per day shall be recoverable by Ultra from the Licensee as and for
liquidated damages in respect of such failure to discontinue.
<PAGE>
21.3 Upon termination of this Agreement for whatever reason, Ultra may, if the
Licensee does not do so, execute in the Licensee's name and on its behalf, any
and all documents necessary in Ultra's judgment to end and cause the
discontinuance of the Licensee's use of Ultra's RESERVED RIGHTS and Ultra is
hereby irrevocably appointed and designated as the Licensee's attorney-in-fact
so to do.
22.0 OBLIGATION TO REPURCHASE
22.1 In the event of the expiration or termination of this Agreement for
whatever reason, Ultra shall be granted an option to purchase from the Licensee,
free and clear of any liens, charges or encumbrances not previously approved by
Ultra, all of the Licensee's supplies other than used, damaged or obsolete or
discontinued items at a fair market value.
22.2 And further, in the event of the expiration or termination of this
Agreement for whatever reason, Ultra shall be granted a right of first refusal
to purchase any or all of the Licensee's supplies and equipment.
22.3 And further, in the event of the expiration or termination of this
Agreement for whatever reason, and if the Licensee retains possession of the
windshield washer dispensing units, the Licensee shall continue to be obligated
to pay to Ultra the royalties on those units as may be in existence at the time
of such expiration or termination.
23.0 NON-COMPETITION
23.1 Except as expressly permitted by this Agreement or other written agreement
between Ultra and the Licensee, during the term of this Agreement and any
extensions or renewals hereof, the Licensee shall not:
23.1.1 Directly or indirectly, in any capacity whatsoever, either
alone or in relationship whatsoever to any person, firm,
corporation or other entity, as an employee, consultant,
principle, agent, member, partner, shareholder, director,
officer, guarantor, indemnitor, creditor, supplier, landlord,
sub-landlord, in any municipality in the provinces in which
the licensed location is located, compete with the business of
Ultra, its affiliates or licensees by the carrying on of
business, advice, or management of any other person, firm or
corporation engaged in or concerned with or interested in any
business featuring or offering for sale products or services
similar to the products and services featured and offered for
sale by Ultra or its licensees.
23.2 The covenants and provisions of this section shall survive the expiration
or sooner termination of this Agreement and any assignment, transfer or sale for
a period of THREE (3) YEARS and shall be applicable at the provinces within
which the Licensee operates.
23.3 The Licensee acknowledges that by reason of the unique nature and
considerable value of Ultra's name and the business reputation associated
therewith, and its systems, methods of operation and format of the business of
Ultra, and by reason of the Licensee's knowledge of and associate and experience
with the license business during the term hereof, the aforesaid covenants are
reasonable and commensurate for the protection of the legitimate business
interests of Ultra, its affiliates and its other licensees.
<PAGE>
24.0 THE ENTIRE AGREEMENT
24.1 This Agreement sets forth the entire understanding between the parties and
contains all of the terms, provisos, covenants and conditions agreed upon by the
parties hereto with reference to the subject matter hereof.
24.2 No other agreements, oral or otherwise shall be deemed to exist or bind any
of the parties hereto, and all prior agreements and understandings are
superseded hereby.
24.3 This Agreement cannot be modified or change except by written instrument
signed by both the Licensee and Ultra.
24.4 The parties hereto covenant and agree to acknowledge, execute and deliver
all such other further documents, instruments or assurances and perform such
further acts or deeds as may be reasonably required from time to time in order
to carry out the terms of this Agreement in accordance with their true intent.
25.0 SEVERABILITY
25.1 In the event that any Section, Paragraph or Sub-Paragraph of this Agreement
or any portion thereof shall be held to be indefinite, invalid, illegal or
otherwise void, voidable or unenforceable, the same shall be severable and
severed from this Agreement, and the entire Agreement shall not fail on account
thereof, and the balance of the Agreement shall continue in full force and
effect.
25.2 If any provision of this Agreement conflicts with any present or future
statute, by-law, ordinance or regulation contrary to which the parties have no
legal right to contract, or if any provision of this Agreement (other than for
the payment of money) is deemed by any tribunal or Court of competent
jurisdiction to be unreasonable, the parties hereto agree that the provision of
this Agreement thus affected shall be curtailed and limited to the extent
necessary to bring it within the requirements of the law, or that the said
tribunal or Court may declare what modification of the said provision it would
deem reasonable in the circumstances, and that the said provision shall be
modified to the extent necessary to bring it within the requirements of such
declaration, and this Agreement shall be and remain valid and enforceable, and
the parties hereto agree to be bound by and perform the same, as thus modified.
26.0 CONSENT TO CONSTRUCTION AND JURISDICTION
26.1 This Agreement shall be deemed to have been made in the Province in which
the Licensed Location is located and shall be construed and interpreted
according to the laws of Canada and of that Province, which the parties hereby
choose to be the proper law of this Agreement, and the parties agree that the
Supreme Court of that Province or the Federal Court of Canada, as appropriate,
shall have jurisdiction to entertain any proceeding in respect of this
Agreement, and the Licensee and Ultra each hereby attorn to the jurisdiction of
the Courts of the said Province, as applicable, in respect of all matters
pertaining to this Agreement.
27.0 SURVIVAL OF COVENANTS
27.1 The terms, provisions, covenants, conditions and obligations contained in
or imposed by this Agreement which, by their terms, require their performance by
Licensee after the expiration or other termination of this Agreement, shall be
and remain enforceable notwithstanding said expiration or other termination of
this Agreement for any reason whatsoever.
28.0 MISCELLANEOUS
28.1 The Section and Paragraph headings contained herein are for convenience of
the parties only, and shall not for any purpose whatsoever be deemed a part of
this Agreement.
<PAGE>
28.2 The words "Ultra", "affiliates" and "Licensee herein shall be applicable to
one or more parties, whether they be persons, firms or corporations, as the case
may be, and the singular shall include the plural, and the masculine shall
include the feminine and neuter, and vice versa; and if there shall be more than
one party or person, firm or corporation referred to as the Licensee hereunder,
then their obligations and liabilities shall be joint and several.
28.3 The work "affiliate" as used herein shall mean a corporation that is
affiliated with another corporation because one of them is the subsidiary of the
other, or both are subsidiaries of the same corporation, or each of them is
controlled by the same person.
28.4 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, estates, executors, administrators,
legal personal representatives, successors and permitted assigns.
28.5 The Licensee agrees that it will not, on the grounds of the alleged
non-performance by Ultra of any of its obligations hereunder, withhold payment
of any amounts due to Ultra or its affiliates whether on account of goods
purchased by the Licensee, royalties, advertising fund contributions or
otherwise.
28.6 In accordance with the Power of Attorney Act applicable hereto, the
Licensee, and where the Licensee is two or more persons each such person, hereby
declares that the powers of attorney herein granted shall continue unrevoked and
may be exercised during any subsequent legal incapacity on the grantor's part.
The Licensee further hereby ratifies and confirms all actions taken by Ultra or
on its behalf under or in pursuance of the authority herein conferred upon it by
the granting herein of such powers of attorney.
28.7 The Licensee acknowledges that the success of the licensed business to be
established hereunder is dependent upon the personal efforts of the Licensee or
the Licensee's partners or officers, if the Licensee is a partnership or
corporation. The licensee acknowledges that neither Ultra nor any other party
has guaranteed to the Licensee or warranted that the Licensee will succeed in
the operation of the licensed business or provided any sales or income
projections of any kind to the Licensee, and the Licensee has not relied upon
any such guarantee, warranty or projection, whether express, implied, purported
or alleged, in entering into this Agreement.
28.8 Time shall be of the essence for all purposes of this
Agreement.
29.0 NOTICES
29.1 Any notices required or permitted to be given hereunder shall be in writing
and shall be deemed to have been given duly if delivered by hand or sent by
telegram or telex or fax or mailed by certified or registered mail, postage
prepaid, addressed to Ultra at: 8425 rue Grenache, Anjou, Province of Quebec,
H1J 1C7; and to the Licensee at: 38 - C 19926 96th Avenue, Langley, in the
Province of British Columbia, V3A 4P8; or to such other address as the
respective parties may in writing advise. Any such notice shall be deemed to
have been given and received, if delivered when delivered, if sent by telegram,
telex or fax, on the next business day following the sending thereof, and if
mailed, on the third (3rd) business day following the mailing thereof; provided,
however, that no notice shall be mailed or sent by telegram if at the date of
mailing or sending there is any labour dispute, strike or lockout affecting mail
or telegraph service in the geographic area in which the notice is intended to
be mailed, sent or received.
30.0 SUBMISSION OF AGREEMENT
30.1 The submission of this Agreement does not constitute an offer, and this
Agreement shall become effective only upon the execution thereof by Ultra and
the Licensee.
<PAGE>
IN WITNESS WHEREOF ULTRA AND THE LICENSEE have caused this
Agreement to be executed on the day and year set forth below.
SIGNED, SEALED and DELIVERED )
in the presence of )
) LA COMPAGNIE ULTRA CLAIR, INC.
) PER:
As to the signature of the authorized ) ______________________________
signatory of La Compagnie Ultra Clair Inc. ) AUTHORIZED SIGNATORY
)
)
) CRYSTAL GREEN RESOURCES, INC.
)
) PER:
)
- ----------------------------------- )
As to the signature of the authorized ) ______________________________
signatory of Crystal Green Resources Inc. ) AUTHORIZED SIGNATORY
EXHIBIT NO. 10(I)(B)(1)
Int. Cl.:12
Prior U.C. Cls.: 19, 21, 23, 31, 35 and 44
Reg. No. 1,961,236
United States Patent and Trademark Office Registered Mar. 12, 1996
- ----------------------------------------- ------------------------
TRADEMARK
PRINCIPAL REGISTER
LA COMPAGNIE ULTRA-CLAIR INC.
(CANADA CORPORATION)
8425 GRENACHE STREET
VILLE D'ANJOU, QUEBEC HIJ 1C7, CANADA
FOR: LAND VEHICLE PARTS, NAMELY DISPENSING UNITS
FOR WINDSHIELD CLEANING FLUIDS, IN CLASS 12 (U.S.
CLS. 19, 21, 23, 31, 35 AND 44).
PRIORITY CLAIMED UNDER SEC. 44(D) ON CANADA
APPLICATION NO. 706411. FILED 6-5-1992, REG. NO.
707411, FILED 6-3-1994, EXPIRES 6-3-2009.
NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO USE
"LAVE-VITRE", APART FROM THE MARK AS SHOWN.
THE ENGLISH TRANSLATION OF "LAVE-VITRE" IS
"WINDSHIELD WASHER", THE ENGLISH TRANSLATION OF
"CLAIR" IS "CLEAR".
SER. NO. 74-299,941, FILED 7-30-1992.
DARREN COHEN, EXAMINING ATTORNEY
[GRAPHIC OMITTED]
(ULTRA CLEAR Graphic here)
[GRAPHIC OMITTED]
EXHIBIT NO. 10(I)(B)(2)
Int. Cl.: 3
Prior U.C. Cls.: 1, 4, 6, 50, 51 and 52
Reg. No. 1,961,237
United States Patent and Trademark Office Registered Mar. 12, 1996
TRADEMARK
PRINCIPAL REGISTER
LA COMPAGNIE ULTRA-CLAIR INC. (CANADA CORPORATION)
8425 GRENACHE STREET
VILLE D'ANJOU, QUEBEC HIJ 1C7, CANADA
FOR: WINDSHIELD CLEANING FLUIDS, IN CLASS 3 (U.S.
CLS. 1, 4, 6, 50, 51 AND 52).
PRIORITY CLAIMED UNDER SEC. 44(D) ON CANADA
APPLICATION NO. 706874, FILED
6-30-1992, REG. NO. TMA428136, DATED 6-3-1994,
EXPIRES 6-3-2004.
NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO USE
"WINDSHIELD WASHER", APART FROM THE MARK AS SHOWN.
SER. NO. 74-299,942, FILED 7-30-1992.
DARREN COHEN, EXAMINING ATTORNEY
EXHIBIT NO. 10(I)(B)(3)
Int. Cl.:12
Prior U.C. Cls.: 19, 21, 23, 31, 35 and 44
Reg. No. 1,962,603
United States Patent and Trademark Office Registered Mar. 19, 1996
TRADEMARK
PRINCIPAL REGISTER
LA COMPAGNIE ULTRA-CLAIR INC. (CANADA CORPORATION)
8425 GRENACHE STREET
VILLE D'ANJOU, QUEBEC HIJ 1C7, CANADA
OBJECT OMITTED (ULTRA CLEAR graphic)
FOR: LAND VEHICLE PARTS, NAMELY DISPENSING UNITS
FOR WINDSHIELD CLEANING FLUIDS, IN CLASS 12 (U.S.
CLS. 19, 21, 23, 31, 35 AND 44).
OWNER OF CANADA REG. NO. TMA428136, DATED
6-3-1994, EXPIRES 6-3-2009.
NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO USE
"WINDSHIELD WASHER", APART FROM THE MARK AS SHOWN.
SER. NO. 74-299,579, FILED 7-30-1992.
DARREN COHEN, EXAMINING ATTORNEY
EXHIBIT NO. 10(II)(A)
Employment Agreement
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and effective this 26th
day of August, 1999, by and between AR Associates, Inc., a Nevada corporation
("Employer"), and Rich Van Diest, an individual ("Employee").
Premises
WHEREAS, the Employer desires to compensate the Employee for the
services he has and continues to render to the Employer; and
WHEREAS, the Employee has the requisite skills and experience to
effectively manage the Employer's operations and desires to enter into a written
agreement to formalize his services to the Employer.
Agreement
NOW THEREFORE, with the above provisions incorporated herein by this
reference, in consideration of the mutual promises contained herein, the
benefits to be derived by each party hereunder and other good and valuable
consideration, the sufficiency of which is hereby expressly acknowledged, the
parties hereto mutually agree as follows:
1. Employment. The Employer employs the Employee and the Employee
accepts employment as the President of Employer upon the terms and conditions
set forth in this Agreement.
2. Term. The term of this Agreement commenced on March 17, 1999, and
shall continue for so long as Employee continues to serve as the Company's
President and one of its directors. If there is no written agreement for
additional term then the employment will continue on a month to month basis
subject to termination by either party upon thirty (30) days written notice to
the other party.
3. Compensation. Employer agrees to compensate the Employee in the
amount of US$150.00 for each hour that Employee has served and does hereafter
serve as the President and a director of the Employer. Employee acknowledges
Employer's current inability to tender such compensation although Employer
hereby undertakes to compensate Employer at its earliest ability.
4. Duties. During the term of this Agreement, Employee shall initially
serve as the President of the Employer. Employee shall perform the tasks and
have the rights, powers and obligations normally associated with the office of
President. Employee agrees to serve in such offices or positions with Employer
that Employer's board of directors ("Board of Directors") shall reasonably
request.
5. Extent of Services/Conduct. The Employee may perform services for
other organizations and volunteer for one or more charitable organizations
provided that, in the reasonable judgement of the Board of Directors, such
services do not interfere and are not inconsistent with the Employee's duties
and obligations under this Agreement. The Employee pledges his careful avoidance
of all personal acts, habits, usages, and statements which might injure, in any
way, directly or indirectly, the personal or business reputation of the
Employer.
<PAGE>
6. Non-Disclosure of Information. In further consideration of
employment and the continuation of employment by Employer, Employee will not,
directly or indirectly, during or after the term of employment disclose to any
person not authorized by Employer to receive or use such information, except,
for the sole benefit of Employer, any of Employer's confidential or proprietary
data, information, or techniques, or give to any person not authorized by
Employer to receive it any information that is not generally known to anyone
other than Employer or that is designated by Employer as "Limited," "Private,"
or "Confidential," or similarly designated.
7. Expenses. The Employee may incur reasonable expenses for promoting
the Employer's business, including reasonable expenses for entertainment,
travel, and similar items. The Employer will reimburse the Employee for all such
reasonable expenses upon the Employee's periodic presentation of an itemized
account of such expenditures, providing that expenses in excess of $500 shall be
approved by the Board of Directors.
8. Termination for Cause. The Employer may terminate this Agreement for
cause at any time. For purposes of this Agreement, the term "cause" includes,
without limitation, the Employee's (a) neglect or intentional disregard of
duties, (b) unauthorized disclosure of confidences of the Employer, (c)
conviction of felony or any crime involving moral turpitude by a court of
competent jurisdiction, (d) willful misconduct, (e) excessive use of alcohol on
repeated occasions or addiction to narcotics, (f) breach of this Agreement, or
(g) dishonesty.
9. Termination Upon Sale of Business. Employer may terminate this
Agreement upon thirty (30) days written notice to the Employee upon the
happening of any of the following events:
a) The sale, by the Employer, of substantially all of its assets to a
single purchaser or group of associated purchasers;
b) The sale, exchange, or other disposition to a single entity or group
of entities under common control in one transaction or series of
related transactions of greater than fifty percent (50%) of the
outstanding shares of the Employer's common stock;
c) A decision by Employer to terminate its business and liquidate its
assets; or
d) The merger or consolidation of the Employer in a transaction in
which the shareholders of the Employer receive less than fifty percent
(50%) of the outstanding voting shares of the new or continuing
corporation.
10. Termination by Employee. This Agreement shall terminate if Employee
resigns as President of Employer.
11. Entire Agreement. This Agreement constitutes the entire
understanding between the parties and there are no covenants, conditions,
representations, or agreements, oral or written, or any nature whatsoever, other
than those herein continued.
12. Waiver. The waiver of any term, condition, clause, or provision of
this Agreement shall in no way be deemed or considered a waiver of any other
term, condition, clause, or provision of this Agreement.
13. Governing Law. This Agreement shall be subject to and governed by
the laws of the State of Washington. Any legal action hereunder shall be
properly commenced only in a federal or state court of competent jurisdiction in
Whatcom, Washington. The prevailing party in any such action shall be entitled
to recover, in addition to any relief or award ordered by the court, reasonable
attorneys fees and all costs of court.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this 26th day of August 1999.
AR Associates, Inc. - Employer Rich Van Diest, Employee
/s/ George Munson /s/ Rich Van Diest
By: George Munson, Director Rich Van Diest
Exhibit No. 21
<TABLE>
<CAPTION>
Name of Subsidiary State of Incorporation Name Under Which Subsidiary
Does Business
- -------------------------- --------------------------- ---------------------------
<S> <C> <C>
Ultra Clear Manufacturing British Columbia, Canada Ultra Clear Manufacturing
and Distribution, Ltd.
La Compagnie Ultra Clair, Inc. Quebec, Canada La Compagnie Ultra Clair, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001045040
<NAME> AR Associates, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<EXCHANGE-RATE> 1.000 1.000
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 0
<CURRENT-LIABILITIES> 31,933 29,433
<BONDS> 0 0
0 0
0 0
<COMMON> 4,000 4,000
<OTHER-SE> (35,933) (33,433)
<TOTAL-LIABILITY-AND-EQUITY> 0 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> (2,500) (7,518)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,500) (7,518)
<EPS-BASIC> (0.001) (0.002)
<EPS-DILUTED> (0.001) (0.002)
</TABLE>
