SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
GREATESTESCAPES.COM INC.
----------------------
(Name of Small Business Issuer)
Washington 98-02-24 -95
-------------------------------- ------------------------------
(State or Other Jurisdiction of I.R.S. Employer Identification
Incorporation or Organization) Number
Guy Brooks
730-800 West Pender Street, Vancouver, B.C. Canada V6C 2V6
----------------------------------------------------------------------------
(Address of Principal Executive Offices including Zip Code)
(604) 683-1668
--------------------------
(Issuer's Telephone Number)
Securities to be Registered Under Section 12(b) of the Act: None
Securities to be Registered Under Section 12(g) of the Act: Common Voting
Stock, NPV
(Title of Class)
Date of earliest event reported: October 16, 2000
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. CHANGES IN CONTROL OF REGISTRANT.
(a) Merger Agreement. Pursuant to an Agreement and Plan of Reorganization
(the "Merger Agreement") dated October 12, 2000, Greatestescapes.com Corp. (the
"Company"), a Nevada corporation, acquired all the outstanding shares of common
stock of Capstra Capital, Corp.("Capstra"), a Washington corporation, from the
shareholders thereof in an exchange of an aggregate of 450,000 shares of common
stock of the Company and other consideration consisting of cash and payments of
certain fees and expenses equal to $30,000 (the "Acquisition"). Immediately
following the Acquisition Greatestescapes (Washington) Corp.("Subco") a
Washington corporation and a wholly-owned subsidiary of the Company merged with
Capstra (the "Merger").
The Acquisition was approved by the unanimous consent of the Board of
Directors of Capstra and its shareholders on October 12, 2000. The Acquisition
was effective on October 12, 2000. The Merger was approved by unanimous consent
of the respective Board of Directors of Subco and the Company on October 12,
2000. The Merger was effective on October 16, 2000. The Acquisition and Merger
is intended to qualify as reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Upon effectiveness of the Acquisition and Merger, pursuant to Rule 12g-3(a)
of the General Rules and Regulations of the Securities and Exchange Commission
(the "Commission"), the Company elected to become the successor issuer to
Capstra for reporting purposes under the Securities Exchange Act of 1934 and
elects to report under the Act effective October 16, 2000.
A copy of the Merger Agreement is filed as an exhibit to this Form 8-K and
is incorporated in its entirety herein. The foregoing description is modified by
such reference.
(b) Control of the Company. The Company had 5,884,734 shares of common
stock issued and outstanding prior to the Acquisition, and 6,334,734 shares
issued and outstanding following the Acquisition. Capstra had 5,000,000 shares
of common stock issued and outstanding prior and after the Acquisition.
The following table sets forth each person known by Capstra to be the
beneficial owner of five percent or more of the Capstra's Common Stock, prior to
the closing of the Acquisition, all directors individually and all directors and
officers of Capstra as a group. Except as noted, each person has sole voting
and investment power with respect to the shares shown.
================================================================================
NAME AND ADDRESS OF SHARES OF ATTRIBUTED APPROXIMATE
BENEFICIAL COMMON BENEFICIAL PERCENTAGE
OWNER STOCK OWNERSHIP OWNED
BENEFICIALLY
OWNED
--------------------------------------------------------------------------------
Unigro U.S.A. Inc. 2,750,000 Frits Jelgersma 55%
1221 Lexington Court
El Dorado Hills,
CA 95762
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Carrie Nelson 450,000 NA 9%
639 Thurston Crt.
Port Moody B.C.
Canada V3H 4J4
--------------------------------------------------------------------------------
Lynne Tam 450,000 NA 9%
2433 West 47th Ave.
Vancouver, B.C.
Canada V6M 2N3
--------------------------------------------------------------------------------
John Mackay 450,000 NA 9%
2280 S.W. Marine Drive
Vancouver B.C.
Canada V6P 6C2
--------------------------------------------------------------------------------
Officers and Directors
as a Group 450,000 NA 9%
(2 persons)
================================================================================
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of October 12, 2000, after
taking into effect the Acquisition, of (1) each person who is known to the
Company to own beneficially more than 5% of the Company's outstanding Common
Stock, (2) each of the Company's directors and officers, and (3) all directors
and officers of the Company as a group:
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Owner of Class
-------------- ------------------- ------------------- --------
$.001 Par Value Guy Brooks President and Director 10.1 %
Common Stock 5255 Gulf Place 646,068 common shares (1)
West Vancouver, B.C.
Canada V7W 2V9
$.001 Par Value Victoria Brooks Chief Operating Officer 16.2%
Common Stock 5255 Gulf Place and Director
West Vancouver, B.C. 1,027,000 common shares(2)
Canada V7W 2V9
$.001 Par Value Brian Buchanan Vice President Corporate 4.7%
Common Stock 2876-139A Street Development and Director
White Rock, B.C. 300,000 common shares
Canada, V4P 2N1
$.001 Par Value Shiraz Hussein Treasurer and Director 0.39%
Common Stock 4911 Wintergreen Ave. 25,000 common shares
Richmond, B.C.
Canada V7C 1L4
<PAGE>
$.001 Par Value James Henshall Director 0.39%
Common Stock #602-1040 West 25,000 common shares
Georgia St.
Vancouver, B.C.
Canada V7C 1L4
$.001 Par Value Duncan Merrin 350,000 common shares 5.5%
Common Stock c/o Oberon Group Ltd.
111 North Bride Road
#18-01
Peninsula Plaza,
Singapore 179098
$.001 Par Value Mervyn Zabinsky 375,000 common shares 5.9%
Common Stock 23 Woodwoards Road
Richmond, B.C.
Canada V7E 6G7
All Directors and Officers as a Group 2,023,068 common shares 31.9%
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) Criteria for Merger. The consideration exchanged pursuant to the
Acquisition Agreement was negotiated between Capstra and the Company.
In evaluating the Acquisition, Capstra used criteria such as the value of assets
of the Company, the Company's anticipated operations and acquisitions, material
contracts, business name and reputation, quality of management, and current and
anticipated operations. Capstra determined that the consideration for the merger
was reasonable. In evaluating Capstra, the Company placed a primary emphasis on
Capstra's status as a reporting company under the Section 12(g) of the
Securities Exchange Act of 1934, (the "Act") as amended, and Capstra's
facilitation of the Company becoming a reporting company under the Act.
(b) Corporate History of the Company.
The Company is an Internet multi-media publishing corporation. It's main focus
is publishing a monthly travel magazine known as WebZine on the Internet over
the website known as www.greatestescapes.com and developing its book publishing
division known as GreatestEscapes.com Publishing. The Company is attempting to
develop an on-line department store. Since 1997, the founders of the Company
have been in the process of researching the technology, design and development
of an Internet-based multi-media publishing business. With Victoria Brooks'
unique and interesting writing style combined with 21st century technology and
marketing, the Company believes it can become an Internet multi-media success.
Offices. The Company has a records office in Las Vegas, Nevada and an
administration office in Vancouver, British Columbia that consists of 1,200
square feet and is leased for $2,800.00 a month. Finally, the Company occupies
<PAGE>
an editorial office in West Vancouver, British Columbia, which consists of 1,000
square feet and is provided by Guy Brooks and Victoria Brooks, officers and
directors of the Company. At this time, such space is provided to the Company
free of charge. The Company's administration office is occupied pursuant to a
monthly lease with a non-affiliated person. Its editorial office occupies 20% of
Editor-in-Chief Victoria Brooks and Publisher Guy Brooks' residence. The Company
believes its present business premises are adequate for its current needs.
Employees. As of September 15, 2000, the Company had no employees. From
time-to-time, the Company uses the services of independent contractors and
consultants to support product research and development, marketing, sales and
business development. Currently the Company utilizes the services of
approximately 25 part-time and full-time consultants depending on need.
Internet Business. The Company's WebZine generates revenues through advertising
sold by a commission sales force and marketing agents. The Company also generate
revenues from its on-line virtual department store, which offers an extensive
range of essential travel products as well as unique and unusual travel-related
items and travel accessories. The Company receives sales commissions on travel
services sold by external travel providers through its Internet publications.
The Company has also developed a range of travel books to be distributed both
through traditional bookstores and over the Internet.
History of Victoria Brooks' Greatest Escapes Travel WebZine. First appearing on
the Internet on February 1, 1998, www.greatestescapes.com is updated every month
with new feature stories from professional travel writers from around the world.
There are currently regular contributors from Mexico City, San Francisco,
Ottawa, Washington, and Southern California. These professional writers
currently provide these feature stories at no cost to the Company. The Company
anticipates paying some or all of these professional travel writers in the
future.
Regular monthly "Trips and Tales" include Victoria Brooks' feature stories with
color photos, (i.e., The Havana Camera Caper or Baja Desert Dream); Suzie
Rodriguez's stories from around the world (i.e., 21 Offbeat Things to Do in San
Francisco or The Back Country of the Cote D' Azur); and adventure travel stories
(Open Cockpit over Ottawa- A Capital Adventure). Famous restaurants from around
the world are reviewed with their signature recipes provided, and travel related
book and videos are reviewed. Visitors have access to an extensive range of
travel links broken down geographically and in numerous general categories,
including lists of bed and breakfasts, pet friendly hotels, discount hotel
reservation systems and other information relevant to tourists and business
travelers.
The Company's website gets about 200,000 hits every month. The popularity of its
WebZine has allowed the Company to charge hotel properties featured in stories a
sponsorship fee. Additionally, as advertisers want to be included in its
WebZine's various "virtual tips" links, the Company anticipates generating
additional revenues through such advertising.
Competition. The Company faces competition from other WebZines such as Salon
Magazine and Wanderlust, which have been on the Internet for a few years and
enjoy a substantial following. Although the Internet industry is relatively
young there is great competition for the Internet users' business and there is
intense competition for visitors to a site. Electronic commerce, commonly called
"e-commerce", is a new and expanding method of buying and selling products and
services, and its competitors which have been on the Internet longer than the
<PAGE>
Company may enjoy customer loyalty. The Company's competitors may have an
advantage over the Company because they have been in business longer than the
Company has. Many of its competitors have greater research and development,
marketing, financial and other resources than the Company has. As a result of
their size and the breadth of their product offerings, certain of these
companies have been and will be able to gain a disproportionate share of the
virtual community market.
Internet Service Provider. The Company's Internet service provider is CSP
Internet, one of Canada's leading Internet services providers. CSP Internet
provides a complete range of Internet services, including dial-up connections,
business connections, consulting services, web serving options, web site
production and web advertising.
WebZines, which are magazines transmitted over the Internet, offer significant
advertising benefits to travel service providers. Forrester Research projects
that by 2002, travel sales on the Internet will be worth US$26 billion in the
United States market alone. The Company's WebZine offers travel service
providers with the opportunity to establish an Internet address or to increase
public awareness of those travel service providers' existing Internet websites.
Advertisers can feature a three-page brochure with a reservation system
reference.
Reports to Security Holders. On or about June 26, 2000, the Company was cleared
to be listed on the Pink Sheets maintained by the National Association of
Securities Dealers, Inc ("NASD"). The Company has concluded the Merger with
Capstra in order to become a Reporting Company with the Securities and
Exchange Commission (the "SEC") to enable it to apply for listing on the
Over-the-Counter Bulletin Board also maintained by the NASD. As a result of the
Merger, the Company will become a reporting company with the SEC and will
thereafter provide an annual report to its security holders, which will include
audited financial statements. The public may read and copy any materials filed
with the SEC at the SEC's Public Reference Room at 450 Fifth Street N.W.,
Washington, D.C. 20549. The public may also obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is http://www.sec.gov. The Company
currently maintains its own Internet address at www.greatestescapes.com.
(e) Risk Factors Associated with the Company and its Business: The following
risks relate specifically to the Company's business and should be considered
carefully. The Company's business, financial condition and results of operations
could be materially and adversely affected by any of the following risks.
The Company's limited operating history makes the evaluation of the Company's
current business and the forecasting of the Company's future results difficult.
The Company has only a limited operating history upon which an evaluation of the
Company's current business and prospects can be based, each of which must be
considered in light of the risks, expenses and problems frequently encountered
by all companies in the early stages of development, and particularly by such
companies entering new and rapidly developing markets like the Internet.
Risks related to the Internet may affect the Company's success.
There are many risks associated with operations on the Internet that may
adversely affect the Company's success. Such risks include, without limitation,
the following:
<PAGE>
* the possibility that the Internet will fail to achieve broad acceptance
* the Company's inability to attract or retain clients;
* a new and relatively unproven business model;
* the Company's ability to anticipate and adapt to a developing market;
* failure of the Company's network infrastructure (including its servers,
hardware and software) to efficiently handle its Internet traffic;
* changes in laws that may adversely affect the Company's business;
* the Company's ability to manage effectively rapidly expanding operation,
including the amount and timing of capital expenditures and other costs
relating to the expansion of the Company's operations;
* the introduction and development of different or more extensive solutions
by the Company's direct and indirect competitors (including those with
greater financial, technical and marketing resources) which may cause loss
of market share;
* the Company's inability to maintain and support increased levels of
traffic on the Company's installed sites;
* the Company's inability to attract, retain and motivate qualified
personnel;
Future growth predictions may be inaccurate.
The Company's limited operating history makes the prediction of future results
difficult or impossible. Furthermore, the Company's limited operating history
leads the Company to believe that period-to-period comparisons of the Company's
operating results may not be meaningful and that the results for any particular
period should not be relied upon as an indication of future performance. To the
extent that revenues do not grow at anticipated rates, the Company's business,
results of operations and financial condition would be materially and adversely
affected.
The Company anticipates that losses may continue.
The Company anticipates incurring losses for the forseeable future. The extent
of future losses will depend, in part, on the amount of growth in revenues from
the Company's services and products. The Company expects that operating costs
will increase during the next several years, especially in the areas of sales
and marketing, product development and general and administrative expenses as it
pursues its business strategy. Thus, the Company will need to generate
increased revenues faster than the rate of growth in costs to achieve
profitability. To the extent that increases in its operating expenses precede or
are not subsequently followed by corresponding increases in revenues, or if it
is unable to adjust operating expense levels accordingly, the Company's
business, results of operations and financial condition would be materially and
adversely affected. There can be no assurance that the Company will sustain
profitability or that its operating losses will not increase in the future.
<PAGE>
The Company's future success is dependent on the continued growth in use of and
the commercial viability of the Internet.
The Company's future success is substantially dependent upon the continued
growth in the use of the Internet. To support product and service revenues, the
Internet's recent and rapid growth must continue, and use of the Internet must
become widespread. None of these can be assured. The Internet may prove not to
be a viable information communications medium and information marketplace. If
use of the Internet does not continue to grow, the Company's business, results
of operations and financial condition would be materially and adversely
affected.
Additionally, there are several issues that could lead to resistance against the
acceptance of the Internet as a viable commercial marketplace. To the extent
that the Internet continues to experience significant growth in the number of
users and the level of use, there can be no assurance that its technical
infrastructure will continue to be able to support the demands placed upon it.
The necessary technical infrastructure for significant increases in electronic
news dissemination and e-commerce related to it, such as a reliable network
backbone, may not be timely and adequately developed. In addition, performance
improvements, such as high-speed modems, may not be introduced in a timely
fashion. Furthermore, security and authentication concerns with respect to
transmission over the Internet of confidential information, such as credit card
numbers, may remain. Also, the Internet could lose its viability due to delays
in the development or adoption of new standards and protocols required to handle
increased levels of activity, or due to increased governmental regulation.
Changes in or insufficient availability of telecommunications services could
result in slower response times and adversely affect usage of the Internet. To
the extent the Internet's technical infrastructure does not effectively support
the growth that may occur, the Company's business, results of operations and
financial condition would be materially and adversely affected.
The Company's business model and acceptance of the Company's products is
unproven in the developing market in which the Company operates.
The Company's business model is new and relatively unproven. The model depends
upon the Company's ability to generate multiple revenue streams by diversifying
the Company's product and service offerings. To be successful, the Company
must, among other things, develop and market products and services that achieve
broad market acceptance by its client companies. No assurance can be given that
the Company's business model will be successful or that it can sustain revenue
growth or be profitable. The market for the Company's products and services is
new, rapidly developing and characterized by an increasing number of market
entrants. As is typical of any new and rapidly evolving market, demand and
market acceptance for recently introduced products and services are subject to
a high level of uncertainty and risk. Moreover, because this market is new and
rapidly evolving, it is difficult to predict its future growth rate, if any, and
its ultimate size. If the market fails to develop, develops more slowly than
expected or becomes saturated with competitors, or if the Company's products and
services do not achieve or sustain market acceptance, the Company's business,
results of operations and financial condition would be materially and adversely
affected.
Potential fluctuations in the Company's operating results and quarterly
fluctuations may adversely affect the Company's trading price.
<PAGE>
The Company's operating results may fluctuate significantly in the future as a
result of a variety of factors, many of which are outside of the Company's
control. As a strategic response to changes in the competitive environment, the
Company may from time to time make certain pricing, service or marketing
decisions or acquisitions that could have a material short-term or long-term
adverse effect on the Company's business, results of operations and financial
condition.
Its officers, directors and entities affiliated with them, control the Company.
In the aggregate, ownership of the Company shares by management represents a
large proportion of the Company issued and outstanding shares of common stock.
These stockholders, if acting together, will be able to significantly influence
all matters requiring approval by the Company's stockholders, including the
election of directors and the approval of mergers or other business combination
transactions.
The Company's future performance is dependent on key personnel.
The Company's performance is substantially dependent on the performance of the
Company's senior management and key technical personnel. In particular, the
Company's success depends on the continued efforts of the Company senior
management team, especially the Company's Chief Executive Officer, Guy Brooks
and the Company's Chief operating Officer, Victoria Brooks. The loss of the
services of any of the Company executive officers or other key employees could
have a material adverse effect on the Company business, results of operations
and financial condition.
A majority of the Company's senior management is inexperienced in managing an
Internet public company.
To manage its potential growth, the Company must continue to implement and
improve its operational and financial systems, and must expand, train and manage
its employee base. Moreover the existing senior management has not had any
previous experience managing a growing Internet public company. There can be no
assurance that the Company will be able to effectively manage the expansion of
its operations, that the Company's systems, procedures or controls will be
adequate to support its operations or that its management will be able to
achieve the rapid execution necessary to fully exploit the market opportunity
for its products and services. Any inability to manage growth effectively could
have a material adverse effect on the Company's business, results of operations
and financial condition.
The Company may suffer system failures on its web server system which could
result in negative publicity, and adversely affect the Company's market
acceptance.
There is a reliance on third parties for both services and equipment by the
Company and its suppliers, all of which are a vital element to the operation of
the business.
In the past, users have occasionally experienced difficulties with Internet and
online services due to system failures, including failures unrelated to the
Company systems. Any disruption in Internet access provided by third parties
could have a material adverse effect on the Company's business, results of
operations and financial condition.
<PAGE>
The Company's operations are dependent in part upon the Company's ability to
protect the Company's operating systems against damage from human error, fire,
floods, power loss, telecommunications failures, break-ins and similar events.
The Company does not presently have redundant, multiple-site capacity in the
event of any such occurrence. The Company's servers are also vulnerable to
computer viruses, break-ins and similar disruptions from unauthorized tampering
with the Company's computer systems. The occurrence of any of these events
could result in the interruption, delay or cessation of service, which could
have a material adverse effect on the Company's business, results of operations
and financial condition.
There are security risks to the Company's network.
Experienced programmers ("hackers") may attempt on occasion to penetrate the
Company's network security. Since a hacker who is able to penetrate the
Company's network security could misappropriate proprietary information or cause
interruptions in the Company's products and services or do other damage, the
Company may be required to expend significant capital and resources to protect
against or to alleviate problems caused by such parties. Additionally, the
Company's may not have a timely remedy against a hacker who is able to penetrate
the Company's network security. Such purposeful security breaches could have a
material adverse effect on the Company's business, results of operations and
financial condition. In addition to purposeful security breaches, the
inadvertent transmission of computer viruses could expose the Company to a
material risk of loss or litigation and possible liability.
In offering certain payment services for some products and services, the Company
could become increasingly reliant on encryption and authentication technology
licensed from third parties to provide the security and authentication necessary
to effect secure transmission of confidential information, such as customer
credit card numbers. Advances in computer capabilities, discoveries in the field
of cryptography and other discoveries, events, or developments could lead to a
compromise or breach of the algorithms that the Company licensed encryption and
authentication technology used to protect such confidential information. If such
a compromise or breach of the Company licensed encryption authentication
technology occurs, it could have a material adverse effect on the Company's
business, results of operations and financial condition. the Company may be
required to expend significant capital and resources to protect against the
threat of such security, encryption and authentication technology breaches or to
alleviate problems caused by such breaches. Concerns over the security of
Internet transactions and the privacy of users may also inhibit the growth of
the Internet generally, particularly as a means of conducting commercial
transactions.
The Company's ability to attract additional financing as needed may affect its
future success.
Additional financing will be required by the Company as it expects negative
operating cash flow for the coming months until the routine income from its
operations has grown to cover the cost of their support and development. Such
financing, if obtained by the Company, may result in the issuance of additional
securities and may not be available on terms favorable to it.
The Company expects that it will continue to experience negative operating cash
flow on occasion for the foreseeable future as a result of significant spending
on product development and infrastructure. Accordingly, the Company will need
to raise additional funds in a timely manner in order to fund the Company's
anticipated expansion and new enhanced services or products, respond to
<PAGE>
competitive pressures or acquire complementary products, businesses or
technologies. Additional funds will have to be raised through the issuance of
equity or convertible debt securities causing the percentage of ownership of the
Company's current stockholders to be reduced, stockholders to experience
additional dilution and such securities may have rights, preferences or
privileges senior to those of the holders of the common stock.
The Company does not have any contractual restrictions on the Company's ability
to incur debt and, accordingly, the Company could incur significant amounts of
indebtedness to finance its operations. Any such indebtedness could contain
covenants, which would restrict the Company's operations. There can be no
assurance that additional financing if and when needed will be available on
terms favorable to the Company, or at all. If adequate funds are not available
or are not available on acceptable terms, it would have a material adverse
effect on the Company's ability to fund its expansion, take advantage of
acquisition opportunities, develop or enhance services or products or respond to
competitive pressures.
Future acquisitions of other business entities by the Company would entail
numerous risks and uncertainties which could have an adverse affect on its
operations and financial condition.
As part of the Company's business strategy, it expects to review acquisition
prospects that would complement its existing business, augment the distribution
of its products or enhance its technological capabilities. Future acquisitions
by the Company could result in potentially dilutive issuances of equity
securities, large and immediate write-offs, the incurrence of debt and
contingent liabilities or amortization expenses related to goodwill and other
intangible assets, any of which could materially and adversely affect the
Company's business, results of operations and financial condition.
Furthermore, acquisitions entail numerous risks and uncertainties, including
difficulties in the assimilation of operations, personnel, technologies,
products and information systems of the acquired companies, the diversion of
management's attention from other business concerns, the risks of entering
geographic and business markets in which the Company has no or limited prior
experience and the potential loss of key employees of acquired organizations.
No assurance can be given as to the Company's ability to successfully integrate
any businesses, products, technologies or personnel that might be acquired in
the future, and the Company's failure to do so could have a material adverse
effect on its business, results of operations and financial condition.
It is unclear how any existing and future laws enacted will be applied to the
Internet industry and what affect such laws will have on the Company.
A number of legislative and regulatory proposals under consideration in the US
and Canada may lead to laws or regulations concerning various aspects of the
Internet, including, but not limited to, online content, user privacy,
taxation, access charges, liability for third-party activities and jurisdiction.
Additionally, it is uncertain how the judiciary to the Internet will apply
existing laws. The adoption of new laws or the application of existing laws may
decrease the growth in the use of the Internet, which could in turn decrease the
demand for the Company's products and services, increase the Company's cost of
doing business or otherwise have a material adverse effect on the Company's
business, results of operations and financial condition.
<PAGE>
Internet user privacy has become an issue both in the US and abroad. The Company
cannot predict the exact form of the regulations that the US government may
adopt to protect such privacy. Any such action could affect the way in which the
Company is are allowed to conduct its business, especially those aspects that
involve clients being restricted in the collection or use of personal
information, and could have a material adverse effect on the Company business,
results of operations and financial condition.
The tax treatment of the Internet and e-commerce is currently unsettled.
Canadian and US government departments have made by working groups a number of
proposals. Governments could impose taxes on the sale of goods and services and
certain other Internet activities. Recently, the Internet Tax Freedom Act was
signed into law in the US, placing a three-year moratorium on new state and
local taxes on certain aspects of Internet commerce in the US. However, there
can be no assurance that future laws imposing taxes or other regulations on
commerce over the Internet would not substantially impair the growth of
e-commerce and as a result have a material adverse effect on the Company's
business, results of operations and financial condition.
Although the Company's servers are located in the Canada, the governments of
other foreign countries might attempt to take action against the Company for
violations of their laws. There can be no assurance that violations of such
laws will not be alleged or charged by provincial, state or foreign governments
and that such laws will not be modified, or new laws enacted, in the future.
Any of the foregoing could have a material adverse effect on the Company's
business, results of operations and financial condition.
Any significant deterioration in the general economic conditions would have an
adverse effect on the Company's business, result of operations or financial
condition.
Time spent on the Internet by individuals, purchases of new computers and
purchases of membership subscriptions to Internet sites are typically
discretionary for consumers and may be particularly affected by adverse trends
in the general economy. The success of the Company's operations depends to a
significant extent upon a number of factors relating to discretionary consumer
spending, including economic conditions (and perceptions of such conditions by
consumers) affecting disposable consumer income such as employment, wages and
salaries, business conditions, interest rates, availability of credit and
taxation for the economy as a whole and in regional and local markets where the
Company operate. There can be no assurance that consumer spending will not be
adversely affected by general economic conditions, which could negatively impact
the Company's results of operations or financial condition. Any significant
deterioration in general economic conditions or increases in interest rates may
inhibit consumers' use of credit and cause a material adverse effect on the
Company's revenues and profitability. In addition, the Company's business
strategy relies on advertising by and agreements with other Internet companies.
Any significant deterioration in general economic conditions that adversely
affects these companies could also have a material adverse effect on the
Company's business, results of operations and financial condition.
The value and transferability of the Company shares may be adversely impacted by
the limited trading market for the Company's common stock, the penny stock rules
and futures share issuance. There is a limited market for the Company's common
stock in the US.
<PAGE>
No assurance can be given that a market for the Company's common stock will be
quoted on the NASD's Over the Counter Bulletin Board.
The sale or transfer of the Company common stock by shareholders in US may be
subject to the so-called "penny stock rules."
Under Rule 15g-9 of the Exchange Act, a broker or dealer may not sell a "penny
stock" (as defined in Rule 3a51-1) to or effect the purchase of a penny stock
by any person unless:
(a) such sale or purchase is exempt from Rule 15g-9;
(b) prior to the transaction the broker or dealer has (1) approved the
person's account for transaction in penny stocks in accordance with Rule
15g-9, and (2) received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock to
be purchased; and
(c) the purchaser has been provided an appropriate disclosure statement as
to penny stock investment.
The Securities and Exchange Commission ("Commission") adopted regulations that
generally define a penny stock to be any equity security other than a security
excluded from such definition by Rule 3a51-1. Such exemptions include, but are
not limited to (1) an equity security issued by an issuer that has (i) net
tangible assets of at least $2,000,000, if such issuer has been in continuous
operations for at least three years, (ii) net tangible assets of at least
$5,000,000, if such issuer has been in continuous operation for less than three
years, or (iii) average revenue of at least $6,000,000 for the preceding three
years; (2) except for purposes of Section 7(b) of the Exchange Act and Rule 419,
any security that has a price of $5.00 or more; and (3) a security that is
authorized or approved for authorization upon notice of issuance for quotation
on the NASDAQ Stock Market, Inc.'s Automated Quotation System.
It is likely that shares of the Company's common stock, assuming a market were
to develop in the US therefore, will be subject to the regulations on penny
stocks; consequently, the market liquidity for the common stock may be
adversely affected by such regulations limiting the ability of broker/dealers
to sell the Company's common stock and the ability of shareholders to sell their
securities in the secondary market in the US.
Moreover, the Company shares may only be sold or transferred by the Company
shareholders in those jurisdictions in the US in which an exemption for such
"secondary trading" exists or in which the shares may have been registered.
The Company has not declared any dividends since inception, and has no present
intention of paying any cash dividends on its common stock in the foreseeable
future. The payment by the Company of dividends, if any, in the future, rests
in the discretion of the Company's Board of Directors and will depend, among
other things, upon the Company's earnings, its capital requirements and
financial condition, as well as other relevant factors.
The possible issuance of additional shares may impact the value of the Company
stock.
<PAGE>
The Company is authorized to issue up to 200,000,000 shares of common stock. It
is the Company's intention to issue more shares. Sales of substantial amounts of
common stock (including shares issuable upon the exercise of stock options, the
conversion of the notes and the exercise of the warrants), or the perception
that such sales could occur, could materially adversely affect prevailing market
prices for the common stock and the ability of the Company to raise equity
capital in the future.
(d) Management's Discussion and Analysis of Financial Condition and Results of
Operations
To increase its website traffic, the Company is developing custom-built search
engine-focused entry pages for all relevant keywords and phrases; extensive
monitoring for maximizing placement on Excite and other major search engines;
customizing its positioning strategies on Yahoo! The Company also conducts a
server log analysis to better target customers and prospective customers, and
devote significant resources to website maintenance. The Company also plans to
submit its website to over 400 secondary Internet search engines. Boris Chow of
BO2.com Ltd., has designed award winning web sites for many companies. He was
retained by the Company to create a more dynamic appearance for its WebZine. The
Company's re-designed web site encompasses a number of cutting edge design
techniques and Internet navigational features that the Company hopes will help
position its WebZine as a leading Internet Travel WebZine.
Internet Promotion. As of February 1, 2000, the Company appointed a new
Internet marketing firm, AEI Productions, Inc., based in South Florida. ("AEI")
AEI will create positioning strategies with major search engines such as Yahoo!,
as well as continuing to make submissions to secondary Internet search engines.
Multi-Media. The first in what is planned as a series of thematic literary
travel guide books became available in preferred Canadian book stores in March,
2000 and United States bookstores in July, 2000. The Company also anticipates
developing a range of DVD/CD-ROMs and a television travel series cross-marketing
its Internet properties.
Virtual Department Store. In January 2000, the Company signed an agreement with
Authorizenet.com Corporation, in conjunction with Card Service International, to
provide online credit card authorization for its online virtual department
store, which is currently under construction. Products to be offered include
travel adapters, silk sleeping bags, travel lingerie, luggage, portable computer
equipment, sporting goods and equipment, cigars and smoking paraphernalia,
computer software and games, videos, books and book reviews, music on compact
discs, and information on discounts on items such as insurance, long distance
telephone rates, and travel-related products.
Banner Advertising. The Company believes that banner advertising (on either a
"click-through" or page impression basis) is the most popular revenue generator
on the Internet. External agents are being contracted to sell banner ads on
www.greatestescapes.com . Typically advertisers pay approximately $3 to $6 per
1000 page impressions, which we believe is more advantageous to the advertiser
than paying on the same number of "click-throughs" which require the visitor to
actually click on the banner. Page impressions only require the visitor to click
on the page where the banner appears. For example, on a page that receives
1,000,000 hits a month, one banner advertisement on just one page would generate
between $3,000 to $6,000 per month.
Brochure Advertising. The Company's WebZine is becoming an important travel
resource for travelers planning their trips to various destinations around the
world. The various feature stories obtained from correspondents around the globe
<PAGE>
enables the Company to expand its range of "Tours" offered on the WebZine home
page. The "Tours" are not packaged tours for sale, but rather a display, in one
convenient location, of all previously featured stories, restaurant reviews and
brochures on a given destination. The WebZine's Tours currently include Florida,
California, Cuba, Jamaica, British Columbia, Mexico, Belize, Spain and France.
The Company anticipates hiring a commissioned sales force to sell advertising
brochures to tourism-oriented businesses in the geographic locations of the
Tours. The Company takes the local tourism-related business's brochure and
publishs it in its WebZine, with text and photographs included. The believes the
market for such advertisers is significant, and includes businesses as diverse
as small bike rental shops, restaurants, bed and breakfasts, hotels, motels,
local tour companies, national or international car rental companies, tourist
attractions, airlines, wine and liquor products and distributors, real estate
offices, time share projects, mutual fund companies, zoo's, aquariums,
planetariums, adventure tours, eco-tours, tennis clubs, horse back riding
stables, bowling alleys, casinos, ski resorts, ski rentals, golf courses, golf
rental shops, golf instruction schools, golf driving ranges, spa resorts, day
spas, spa equipment manufacturers and distributors, spa cream manufacturers and
distributors, retail skin products such as moisturizers, sunblock and massage
oils, cooking schools, gourmet food providers, art galleries and other
businesses which rely on tourists.
Advertisers with existing web sites benefit from the increased coverage obtained
from being in the Company's WebZine. Companies which do not have an existing web
site or which have a web site which is undeveloped or unpromoted, which is more
common, are able to establish their own Internet address and Internet presence
through the Company's WebZine. A typical brochure published on its WebZine
features a one to three-page layout which includes references to the
advertiser's reservation system, e-mail and telephone number. The advertiser's
online address is www.greatestescapes.com/advertiser's name. The Company
believes that this is a cost-effective way for advertisers to acquire an
Internet presence without incurring the high set-up costs and ongoing
maintenance fees of creating a web site.
The Growth of E-Commerce. Electronic commerce, or e-commerce, accounted for
nearly $3 billion in transactions in 1998 in North America. Travel related items
are expected to comprise a significant portion of e-commerce, as worldwide
travel related sales are projected to be almost $12 billion by 2002. In 1998,
worldwide travel related sales amounted to approximately $1 billion.
Significantly, the travel industry amounts to annual commerce of approximately
$500 billion. The Company believes that e-commerce over the Internet will
attract an increasing share of travel industry commerce. According to the
Economist, Internet shopping is rapidly coming of age. Jupiter Communications, a
consultancy that specializes in analyzing the e-commerce market, and its major
rival, Forrester Research, predict that, as more people shop online, more
retailers utilize the Internet and more products are offered. The most popular
purchases tend to be those that need research and are high in value, but, after
a slow start, even groceries are starting to be bought on-line. Moreover,
Forrester Research projects that, by 2002, travel and computer hardware sales
will be worth $26 billion and $10 billion, respectively, in the United States
market alone.
Mail order catalogues revolutionized the way people bought goods in the early
1900's. Television marketing in the 1950's was considered state of the art. The
Company believes that the Internet is the new medium for commerce and
communication. According to a research paper by the Organization for Economic
Co-operation and Development, global electronic commerce is expected to explode
to about a trillion dollars worldwide in the next seven years, from a current
<PAGE>
$26 billion per year. Media reports that during the 1998 Christmas season,
approximately 20 to 25 million people in the United States shopped online.
E-Commerce Operations. The Company is building a virtual department store,
Victoria Brooks' Greatest Escapes Department Store, to sell travel-related
products and services at the WebZine. This virtual department store (its
pre-opening address is www.greatestescapes.com/shop) is starting off as an eight
floor virtual department store selling essential travel items as well as unusual
and unique products and services. The Company believes that the growing
acceptance of e-commerce represents a substantial opportunity for it to conduct
its business over the Internet. Various industry estimates predict that such
Internet e-commerce transactions are estimated to increase from the 1997 global
level of approximately $12 billion to $426 billion by the year 2002. There can
be no assurance, however, that Internet commerce will continue to expand, or
that its e-commerce operations will be successful.
The Company already has its own secure server for handling credit card
transactions at its WebZine. The Company will very rarely, if ever, inventory
product. Items will be described along with a small picture of the item on the
respective `floor' of the virtual department store. If a virtual shopper wants
more information, he or she clicks on the icon to acquire additional product
information. To purchase an item, a consumer clicks on the "buy" icon and is
connected to a secure point of purchase.
Products to be sold include travel adapters, silk sleeping bags, travel
lingerie, luggage, portable and traveling computer equipment, sporting goods and
equipment, cigars and smoking paraphernalia, computers, computer software and
games, videos, books and book reviews, music on compact discs, music reviews,
and information on available discounts on items such as insurance, long distance
telephone rates, and travel related products. The Company anticipates providing
department store "managers" with opportunities to enter into joint ventures with
the Company or to participate on a profit-sharing basis. Travel services will be
sold through external travel providers initially, with the Company receiving
commissions on services sold. A range of private label travel services including
discount "last minute" hotels, airline tickets and cruise ship bookings is
planned to be branded under the name Greatest Escapes. Greatest Escapes
DVD/CD-ROMs will be distributed through traditional retail outlets as well as
www.greatestescapes.com.
Since 1997, the Company's founders have devoted time and resources to make a
product with a wide market appeal. Management of the Company believes there are
three steps in developing a successful Internet business:
1. Develop a product having appeal to the target market, ultimately
inspiring increased user traffic on the website;
2. Establish a plan of commerce, thus increasing the opportunity to post
advertisements or banner style ads.
3. Develop a strategy for selling products through over the Internet.
The Company believes it has addressed these three important steps. It believes
WebZine is highly regarded while enjoying moderate success. The Company has
attempted to create an environment where both travelers and travel service
providers can come together to share the same resources. WebZine is free for
travelers. However, travel service providers pay for advertising.
<PAGE>
The Company hopes to have multi-dimensional income streams. It intends to try to
position the Company to benefit from the anticipated growth within the Internet.
The Company hopes that it will be able to earn revenue through:
1. Advertising sold by external Internet advertising/marketing
consultants.
2. An on-line department store which will offer a wide range of travel-
related products.
3. Travel services sold through external travel providers, with the
Company receiving a commission on items sold.
4. Enhancement of multi-media opportunities by offering a wide range of
travel books. The Company hopes that the travel books will be distributed
through traditional bookstores as well as on www.greatestescapes.com and
www.LiteraryTrips.com .
5. A GreatestEscapes.com or LiteraryTrips.com television series which will
try to create greater brand name awareness, provide distribution royalties and
cross-marketing opportunities for the WebZine.
The Company hopes to someday distribute DVD/CD-ROMs through traditional retail
outlets as well as over its website, www.greatestescapes.com.
Literary Travel Guides. During 1999, the Company created a new division,
GreatestEscapes.com Publishing, to produce traditional print publications. The
Company 'sfirst project, Literary Trips: Following in the Footsteps of Fame, is
a thematic guidebook containing a compilation of approximately 24 destination
pieces (traveler's tales with guidebook information at the end of each piece) on
a destination surrounding a famous literary figure (for example, Ian Fleming in
Jamaica, John Steinbeck in California, Ernest Hemingway in Cuba, Paul Bowles in
Morocco, Graham Greene in Viet Nam, etc.). Each story has 4 to 15 pages of text
with 2 to 7 pages of graphics, photographs, pen-and-ink sketches, and maps. The
book presently has approximately 368 pages. The manuscript is in bookstores
across Canada and in the United States. The book is also available in the
Company's virtual department store and at www.LiteraryTrips.com.
In December 1999, the Company signed an agreement with a British Columbia
company, Sandhill Book Marketing Ltd., one of Canada's leading book
distributors, to effectuate the distribution of the Company's titles in Canada.
The Company has entered into a distribution contract with WORDS Distributing
Co., located in Oakland, California, whereby WORDS Distributing Co. will
distribute the Company's titles in the United States.
Television. The Company is currently developing a proposal for a 13 part travel
television series, titled Greatest Escapes, which could be sold to networks such
as A & E, TLC, Life, The Travel Network, Discovery, Prime, Women's Television
Network, plus the hundreds of smaller independent stations. Both the television
show and the WebZine would be used to advertise each other, further building and
enforcing the Victoria Brooks Greatest Escapes brand name. If the series is
produced and achieves recognition through North American or European
distribution, the value of advertising on the Company's WebZine would be greatly
enhanced. However, the television production industry is notoriously difficult
to enter, and the Company has no experience in producing a television series.
Therefore, the Company's development of a television series is highly
speculative, and there can be no assurance that we will successfully produce
such a television series.
<PAGE>
Potential Acquisitions. The Company is seeking appropriate acquisition targets
to accelerate growth and revenue projections. Such targets include existing
on-line department stores and Internet travel booking companies. The Company
anticipates that the ultimate acquisition of a travel service provider will also
contribute to the Company's revenue sources.
Regulation. The Internet has been under increasing scrutiny by various state,
federal and international regulatory agencies. The Company may be subject to
various existing or proposed forms of government regulations, including
restrictions on interstate telecommunications to promote certain transactions
and age-based content restrictions. Any future violation of, and the cost of
compliance with, these laws and regulations could have a material adverse effect
on the Company's business, financial condition and results of operations.
Third-Party Reliance. The Company may become dependent upon various third
parties for one or more significant services required for the Company's
business. Because the capacity of those third parties to provide different
services the Company needs may be limited for economic or other reasons, it's
inability to continue to receive services from existing providers or to obtain
similar services from additional providers could have a material adverse effect
on the Company.
Reliance on Growth and Use of the Internet. The substantial growth in the use of
and interest in the Internet is a recent phenomenon. There can be no assurance
that communication or commerce over the Internet will become more widespread or
that extensive content will continue to be provided over the Internet. The
Internet may not prove to be a viable commercial marketplace for a number of
reasons, including potentially inadequate development of the necessary
infrastructure, such as a reliable network backbone, or timely development and
commercialization of performance improvements, including high speed modems. In
addition, to the extent that the Internet continues to experience significant
growth in the number of users and level of use, there can be no assurance that
the Internet infrastructure will continue to be able to support the demands
placed upon it by such potential growth or that the performance or reliability
of the Web will not be adversely affected by this continued growth. In addition,
the Internet could lose its viability due to delays in the development or
adoption of new standards and protocols required to handle increased levels of
Internet activity, or due to increased governmental regulation. Changes in or
insufficient availability of telecommunications services to support the Internet
also could result in slower response times and adversely affect usage of the Web
and the Company's online media properties. If use of the Internet does not
continue to grow, or if the Internet infrastructure does not effectively support
growth that may occur, the Company's business, operating results and financial
condition would be materially and adversely affected.
Regulatory and Market Influences. The Internet is subject to changing political,
economic and regulatory influences that will affect the procurement practices
and operation of Internet directory service organizations. Changes in current
Internet directory service reimbursement systems could result in the need for
unplanned product enhancements, in delays or cancellations, or in the revocation
of endorsement of the services of the Company. Any of these occurrences could
have a material adverse effect on the Company's business, financial condition
and results of operations. During the past several years, various Internet
directory service industries and telecommunications industries have been subject
to an increase in governmental and international regulation. Certain proposals
to reform the telecommunications and Internet service systems are periodically
under consideration by the appropriate regulators. These programs may contain
proposals to increase government involvement in Internet directory services and
otherwise change the operating environment for the Company's customers. The
Company cannot predict what impact, if any, such factors might have on the
<PAGE>
Company's business, financial condition and results of operations. In addition,
many Internet directory service providers are consolidating to create integrated
Internet directory service delivery systems with greater regional market power.
As a result, these emerging systems could have greater bargaining power, which
may lead to price erosion of the Company's products. The Company's failure to
maintain adequate price levels would have a material adverse effect on the
Company's business, financial condition and results of operations. Other
legislative or market-driven reforms could have unpredictable effects on the
Company's business, financial condition and results of operations.
Liquidity and Capital Resources. The Company had cash resources of $11,911.00 at
February 28, 1999. At February 29, 2000, the Company had cash resources of
$14,090.00. At February 28, 1999, the Company had total current assets of
$11,942.00 and total current liabilities of $15,460.00. At February 28, 1999,
total current liabilities exceeded total current assets by $3,518.00. At
February 29, 2000, the Company had total current assets of $20,477.00 and total
current liabilities of $23,552.00. At February 29, 2000, total current
liabilities exceeded total current assets by $3,075.00.
At February 29, 2000, the Company had cash resources of $14,090.00. The Company
had cash resources of $8,831.00 at May 31, 2000. At February 2, 2000, the
Company had total current assets of $17,560.00 and total current liabilities of
$23,552.00. At February 29,, 2000, total current liabilities exceeded total
current assets by $3,075.00. At May 31, 2000, the Company had total current
assets of $19,757.00 and total current liabilities of $30,809.00. At May 31,
2000, total current liabilities exceeded total current assets by $11,052.00. The
cash and equivalents constitute the Company's present internal sources of
liquidity. Because neither the Company nor its subsidiaries are generating any
significant royalty revenues, the Company's only external source of liquidity is
the sale of the Company's capital stock.
Results of Operations. The Company has not yet realized any significant revenue
from operations, nor does the Company expect to in the foreseeable future. The
net loss from operations from February 10, 1999 (inception), to February 29,
2000, was $276,498.00 due primarily to the expenditure of funds for
administrative and general expenses, development of the Company's website and
related activities, including, but not limited to, content development,
management fees and professional fees. The Company has not yet realized any
significant revenue from operations, nor does the Company expect to in the
foreseeable future. The net loss from operations from February 29, 2000, to May
31, 2000 was $100,546.00 due primarily to the expenditure of funds for
administrative and general expenses, development of the Company's website and
related activities, including, but not limited to, content development,
management fees and professional fees.
In order to address the going concern problem discussed in the Company's
financial statements, the Company will require additional cash. The Company will
also require additional cash to implement the Company's business strategies,
including cash for (i) payment of increased operating expenses and (ii) further
implementation of those business strategies. No assurance can be given, however,
that the Company will have access to the capital markets in the future, or that
financing will be available on acceptable terms to satisfy the Company's cash
requirements needed to implement the Company's business strategies. The
Company's inability to access the capital markets or obtain acceptable financing
could have a material adverse effect on the Company's results of operations and
financial condition and could severely threaten the Company's ability to operate
as a going concern.
<PAGE>
The Company's forecast of the period of time through which the Company's
financial resources will be adequate to support the Company's operations is a
forward-looking statement that involves risks and uncertainties, and actual
results could vary as a result of a number of factors.
The Company anticipates that it will need to raise additional capital within the
next 12 months in order to continue as a going concern. Such additional capital
may be raised through additional public or private financings, as well as
borrowings and other resources. To the extent that additional capital is raised
through the sale of equity or equity-related securities, the issuance of such
securities could result in dilution of the Company's stockholders. There can be
no assurance that additional funding will be available on favorable terms, if at
all. If adequate funds are not available within the next 12 months, the Company
may be required to curtail the Company's operations significantly or to obtain
funds through entering into arrangements with collaborative partners or others
that may require it to relinquish rights to certain of the Company's assets that
the Company would not otherwise relinquish.
The Company does not anticipate any material expenditures within the next 12
months that will affect the Company's liquidity. The Company does not anticipate
any significant research and development within the next 12 months, nor does the
Company anticipate that it will lease or purchase any significant equipment
within the next 12 months. The Company does not anticipate a significant change
in the number of its employees within the next 12 months. The Company is not
aware of any material commitment or condition that may affect the Company's
liquidity within the next 12 months.
(e) Description of Property
Property held by the Company. As of the dates specified in the following table,
the Company held the following property:
Property February 29, 2000 May 31, 2000
-------- ----------------- ------------
Cash $ 14,090.00 $ 8,831.00
Property
and Equipment $ 2,916.00 $ 2,697.00
(f) Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of September 15, 2000 by (i) each
person or entity known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of common stock, (ii) each of the Company's directors
and named executive officers, and (iii) all directors and executive officers of
the Company as a group.
Name and Address Amount and Nature Percent
Title of Class of Beneficial Owner of Beneficial Owner of Class
-------------- ------------------- ------------------- --------
$.001 Par Value Guy Brooks President and Director 10.2 %
Common Stock 5255 Gulf Place 646,068 common shares (1)
<PAGE>
West Vancouver, B.C.
Canada V7W 2V9
$.001 Par Value Victoria Brooks Chief Operating Officer 16.2%
Common Stock 5255 Gulf Place and Director
West Vancouver, B.C. 1,027,000 common shares(2)
Canada V7W 2V9
$.001 Par Value Brian Buchanan Vice President Corporate 4.7%
Common Stock 2876-139A Street Development and Director
White Rock, B.C. 300,000 common shares
Canada, V4P 2N1
$.001 Par Value Shiraz Hussein Treasurer and Director 0.39%
Common Stock 4911 Wintergreen Ave. 25,000 common shares
Richmond, B.C.
Canada V7C 1L4
$.001 Par Value James Henshall Director 0.39%
Common Stock #602-1040 West 25,000 common shares
Georgia St.
Vancouver, B.C.
Canada V7C 1L4
$.001 Par Value Duncan Merrin 350,000 common shares 5.5%
Common Stock c/o Oberon Group Ltd.
111 North Bride Road
#18-01
Peninsula Plaza,
Singapore 179098
$.001 Par Value Mervyn Zabinsky 375,000 common shares 5.9%
Common Stock 23 Woodwoards Road
Richmond, B.C.
Canada V7E 6G7
All Directors and Officers as a Group 2,023,068 common shares 31.9%
(1) Includes 206,068 shares owned by BBB Consultants Ltd., a company controlled
by Guy Brooks.
(2) All such shares are held in the name of Victoria Brooks Investments Inc., a
company controlled by Victoria Brooks.
<PAGE>
Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect to
securities. In accordance with Commission rules, shares of the Company's common
stock which may be acquired upon exercise of stock options or warrants which are
currently exercisable or which become exercisable within 60 days of the date of
the table are deemed beneficially owned by the optionees. Subject to community
property laws, where applicable, the persons or entities named in the table
above have sole voting and investment power with respect to all shares of the
Company's common stock indicated as beneficially owned by them.
(g) Directors, Executive Officers, Promoters and Control Persons
Executive Officers of the Company:
Name: Age: Office(s):
----- ---- ----------
Guy Brooks 44 President, CEO
Victoria H. Brooks 49 COO
Brian Buchanan 52 Vice President
Bill Kaleta 51 Vice President
Shiraz Hussein 52 Treasurer
Board of Directors of the Company:
Name: Age: Title:
----- ---- ------
Victoria H. Brooks 49 Co-Chairman
Guy Brooks 44 Co-Chairman
Brian Buchanan 52 Director
Shiraz Hussein 52 Director
James Henshall 53 Director
Biographical Information on Company's Officers and Directors:
Victoria Brooks, age 49, is the Chief Operating Officer and a director of the
Company. Mrs. Brooks is also a director of GreatestEscapes.com Holdings Ltd., a
subsidiary of the Company. She is also the Editor-in-Chief of all of the
Company's publications and a partner with Guy Brooks in the creation and
development of GreatestEscapes.com Corp. Mrs. Brooks is a freelance travel
writer and photographer and five-time published guidebook author. Mrs. Brooks is
the creator and co-author of the Kick Start business travel guide series.
Together with her husband Guy, they have had five of their Kick Start guides
published--Vietnam, Indonesia, Malaysia, Hong Kong and Costa Rica. Mrs. Brooks
writes freelance travel pieces for various Canadian and North American
publications. Mrs. Brooks has a degree from Evergreen University in English
Literature and has studied Journalism at Mount Royal College in Calgary,
Alberta, Canada. She is an active member of the prestigious American Society of
Travel Writers, the American Society of Journalists and Authors, the Writers
Union of Canada, the Periodical Writers Association of Canada and the Travel
Media Association of Canada. From 1980 to 1985, Mrs. Brooks worked in sales for
<PAGE>
Qualico Calgary. From 1989 to 1992, Mrs. Brooks was the owner of Electric Sox &
Stocks. From 1993 to 1999, Mrs. Brooks was an Editor and Freelance Writer for
Kick Start Publishing.
Guy Brooks, age 44, is the President, Chief Executive Officer and a director of
the Company. Mr. Brooks is also the President and a director of
Greatestescapes.com Holdings Ltd., a subsidiary of the Company. He is also the
Publisher and partner with Victoria in the development of GreatestEscapes.com
Corp. Mr. Brooks has experience in project management and business development
of both private and public companies. He is currently Director of a publicly
listed gold exploration company and a Director of one Internet-related start-up
company. Mr. Brooks studied Journalism at Carleton University. At various times,
Mr. Brooks has held the following professional memberships: Australian Society
of Investment & Financial Advisors; Institute of Company Directors; and Rotary
Club of Perth. From 1990 to 1993, Mr. Brooks was the General Manager of Key to
Asia Consulting. Also from 1990 to 1993, Mr. Brooks was the State General
Manager for The Over 50's Friendly Society. From 1993 to 1999, Mr. Brooks has
been a representative of Regal Capital Investments. From 1993 to 1999, Mr.
Brooks was the Publisher and a partner in Kick Start Publishing. From 1996 to
1997, Mr. Brooks was the President of South East Asia Brewing. From 1997 to
present, Mr. Brooks was Co-Chairman of the Board of Directors and President of
Global Brewing Services. From 1999 to present, Mr. Brooks has been the President
of BBB Consultants Ltd.
Brian Buchanan, age 52, is the Vice President of Corporate Development and a
director of the Company. Mr. Buchanan brings a travel and business experience to
the Company. His has experience in marketing and human resource techniques. Mr.
Buchanan has developed management techniques that the Company hopes will enhance
productivity as well as cultivate valuable relations with local business
associates. His corporate background includes being Vice President and Director
of Marketing for one of Canada's largest Insurance Brokerage companies for nine
years. He is currently President and Chief Executive Officer of The Asia Group
of Companies Holdings Ltd. and President and a Director of a publicly-traded
junior mining company active in Southeast Asia. In 1979, Mr. Buchanan studied
Business Administration at Fraser Valley College. Mr. Buchanan's professional
memberships include the Insurance Council of British Columbia and Sales &
Marketing Executives of Vancouver. From 1983 to 1991, Mr. Buchanan was a Vice
President and a director of TOS Insurance. From 1991 to 1992, Mr. Buchanan was
the General Manager of Southern Cross Agriculture. Also from 1991 to 1993, Mr.
Buchanan was the Insurance Manager at TN Stevens Association. From 1993 to 1994,
Mr. Buchanan was the General Sales Manager of Bow Mac Saturn Saab. From 1994 to
present, Mr. Buchanan has been the President of Asia Group of Companies Holding
Ltd. From 1995 to present, Mr. Buchanan has been the President of Spire Ventures
Ltd.
William Kaleta, age 51, is the Chief Information Officer and Vice President
Engineering of the Company. Mr. Kaleta has understanding and knowledge in the
development of computer software for small and large corporations. Previously
with Epost Innovations Inc., a company trading on the Over-the-Counter Bulletin
Board maintained by the National Association of Securities Dealers, Corp.
("CYPOST") as Chief Information Officer and Lead Programmer, he was instrumental
in establishing CYPOST as a leader in their industry. The Company believe the
appointment of Mr. Kaleta is consistent with the Company's objective to
establish Victoria Brooks' Greatest Escapes Travel WebZine as a popular travel
webzine. Mr. Kaleta is familiar with many of the computer languages.
Shiraz Hussein, age 53, is a director of the Company. In 1969, Mr. Hussein
<PAGE>
earned a degree in Business Administration from Filton College in the United
Kingdom. Mr. Hussein is currently a principal of Razzle & Company, a company
which provides accounting services to reporting and non-reporting companies
since October, 1988. Mr. Hussein has been a director of Arcturus Resources Ltd.
and Spire Ventures Ltd., two reporting issuers. He also served as Secretary for
Welcome Opportunities Ltd., a reporting issuer. He has been a director and
officer of the Company since February, 1999.
James Henshall, age 53, has been a director of the Company since 1998. In 1970,
Mr. Henshall earned a law degree at the University of Alberta in Canada. In
1974, Mr. Henshall earned a Bachelor of Arts degree at the University of Western
Ontario in Canada. Mr. Henshall is a member of the Canadian Bar Association as
well as the British Columbia Bar Association. From 1974 to 1978, Mr. Henshall
worked as a Associate Attorney for Russell Dumoulin, in Canada. From 1978 to
1982, Mr. Henshall was a Partner at the law firm of Henshall Cottick. From 1982
to 1987, Mr. Henshall was a Partner with the law firm of Knott Pollard Morgan.
From 1987 to 1995, Mr. Henshall was a Partner with the law firm of Alexander
Holburn. Mr. Henshall currently works as an attorney with C.C. China Capital
International Corp. He is also the Senior Vice President for C.C. China Capital
International Corp.
Other Key Personnel
Katherine Means is a communications professional with 20 years of experience as
a newspaper and magazine reporter, editor and feature writer. Her recent
professional emphasis has been on travel and lifestyle writing. Katherine is
Senior Contributing Editor to the Company's WebZine. Over the past 20 years her
career as a magazine and newspaper editor has taken her to Jakarta and back to
Houston where she now resides. As a freelance writer, Katherine has written for
numerous publications including; Conroe Courier daily newspaper, Ultra Magazine
(a regional lifestyle 4-color monthly magazine), local Houston newspapers,
Adweek, American Automobile Association World, American Express Expression,
Associated Press Special Editions, Body Smart (a health and fitness
publication), Communication Arts, Continental Airlines Profiles, Houston
Advanced Research Center Corollary, Houston Home & Living, Houston Magazine, San
Francisco Review of Books, Singapore Airlines Silver Kris, Southwest Airlines
Spirit, and others. Ms. Means has a Bachelor of Arts in Journalism from Ohio
State University, and completed graduate courses in journalism at The University
of North Washington. She also holds a certificate in publishing from Rice
University and is active in various service organizations.
Suzie Rodriguez is www.greatestescapes.com's Senior Contributing Editor. The
daughter of a United States Air Force officer, she has traveled extensively in
South America, Africa, Japan, Europe and the South Pacific. A freelance writer
whose work has appeared in many national newspapers and magazines, Ms. Rodriguez
is also the author of two books, one of which, Found Meals of the Lost
Generation (published by Faber and Faber), about Americans in Paris in the
1920s, has been translated into five languages. She holds two degrees from
California's Stanford University, has attended the Sorbonne, and is currently at
work on a biography of wealthy salonist and proto-feminist Natalie Clifford
Barney.
Jim Johnson is the Company's "Man about Town" correspondent. Mr. Johnson has
been a freelance travel writer for 15 years, primarily for the travel sections
of Sunday newspapers like the Los Angeles Times, Atlanta Journal-Constitution,
Boston Globe, and smaller papers published in the United States.
<PAGE>
Rita Cooke is the Editorial Director of Insider magazine and Editor-in-Chief of
the Creative Alliance Monthly newsletter. She lives in Los Angeles and has also
written 14 screenplays. Ms. Cooke is on the Steering Committee of Cinewomen in
Los Angeles and is currently working on a book titled Screenwriters: From
Inspiration to Action. Ms. Cooke's travel articles have been published in both
national and international publications.
(h) Executive Compensation - Remuneration of Directors and Officers.
Any compensation received by officers, directors, and management personnel of
the Company will be determined from time to time by the Board of Directors of
the Company. Officers, directors, and management personnel of the Company will
be reimbursed for any out-of-pocket expenses incurred on behalf of the Company.
Summary Compensation Table. The table set forth below summarizes the annual and
long-term compensation for services in all capacities to the Company payable to
the Chief Executive Officer of the Company and the other executive officers of
the Company whose total annual salary and bonus is anticipated to exceed $50,000
during the year ending The Board of Directors of the Company has recently
adopted an incentive stock option plan for its executive officers which will
result in additional compensation.
--------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
--------------------------------------------------------------------------------
Name and Other Annual All Other
Principal Year Salary Bonus Compensation Compensation
Position ($) ($)
--------------------------------------------------------------------------------
Guy Brooks Up to 02/28/1999 None None None None
President, CEO Up to 02/29/2000 $18,000.00 None None None
and Director
--------------------------------------------------------------------------------
Victoria Brooks Up to 02/29/1999 None None None None
COO and Up to 02/29/2000 $18,000.00 None None None
Director
--------------------------------------------------------------------------------
Brian Buchanan Up to 02/28/1999 None None None None
VP of Corporate Up to 02/29/2000 $16,720.00 None None None
Development
and Director
--------------------------------------------------------------------------------
Compensation of Directors. Directors who are also employees of the Company
receive no extra compensation for their service on the Board of Directors of the
Company.
Employment Contracts. The Company has not entered into any employment contracts,
but anticipates entering into employment contracts with certain management and
other key personnel.
Stock Option Plans. The Board of Directors of the Company have recently adopted
a stock option plan ("Stock Option Plan"). Pursuant to the provisions of the
proposed Stock Option Plan, certain shares of the Company's $.001 par value
<PAGE>
common stock will be reserved for issuance upon exercise of options. The Stock
Option Plan will be designed to retain qualified and competent officers,
employees, and directors of the Company. The Company's Board of Directors, or a
committee thereof, shall administer the Stock Option Plan and will be
authorized, in its sole and absolute discretion, to grant options thereunder to
all eligible employees of the Company, including officers and directors (whether
or not employees) of the Company. Options will be granted pursuant to the
provisions of the Stock Option Plan on such terms and at such prices as
determined by the Company's Board of Directors. Options granted under the Stock
Option Plan will be exercisable after the period specified in the option
agreement. Options granted under the Stock Option Plan will not exercisable
after the expiration of 10 years from the date of grant. The Stock Option Plan
will also authorize the Company to make loans to optionees to enable them to
exercise their options. At present, no options have been granted.
Stock Awards Plan. The Company has not adopted a Stock Awards Plan, but may do
so in the future. The terms of any such plan have not been determined.
(h) Certain Relationships and Related Transactions
Related Party Transactions. On or about February 9, 1999, the Company purchased
the intellectual property of Kick Start Publishing, a partnership owned by
Victoria Brooks and Guy Brooks, for $1.00. The intellectual property included
the Company's WebZines, travel names and trade names, and the Company's virtual
department store. On March 19, 1999, Victoria Brooks Investments, Corp. received
1,000,000 shares of the Company's common stock in a transaction which qualified
for the nonpublic offering exemption under Section 4(2) of the Securities Act of
1933 and which also qualified for the exemption specified by Regulation S.
The Company pays consulting and accounting fees to Razzle & Company, a company
controlled by Shiraz Hussein, Treasurer and a director of the Company.
Victoria Brooks, Chief Operating Officer and a director of the Company, has
entered into a contract with the Company whereby she is paid a fee for supplying
content for the Company's website.
Brian Buchanan, Vice-President of Corporate Development and a director of the
Company, has made loans to the Company. The Company has agreed to pay such loans
when the funds become available.
The Company will attempt to resolve any such conflicts of interest in favor of
the Company. The officers and directors of the Company are accountable to the
Company and its shareholders as fiduciaries, which requires that such officers
and directors exercise good faith and integrity in handling the Company's
affairs. A shareholder may be able to institute legal action on behalf of the
Company on or behalf of that shareholder and all other similarly situated
shareholders to recover damages or for other relief in cases of the resolution
of conflicts in any manner prejudicial to the Company.
(i) Legal Proceedings
There are no legal actions pending against the Company nor are any such legal
actions contemplated.
(j) Market for Common Equity and Related Stockholder Matters
<PAGE>
On or about June 26, 2000 the Company was cleared by the NASD to list the
Company's securities on the Pink Sheets maintained by the NASD. With the
completion of the Merger, the Company is applying for participation on the OTC
Bulletin Board, an electronic quotation medium for securities traded outside the
Nasdaq Stock Market. There can be no assurance that the Company will be approved
for participation on the OTC Bulletin Board.
(k) Recent Sales of Unregistered Securities
There have been no sales of unregistered securities by the Company within the
last three (3) years which would be required to be disclosed pursuant to Item
701 of Regulation S-B, except for the following:
On February 25, 1999, Victoria Brooks paid $5,000.00 for 1,000,000 shares of the
Company's common stock. Such shares were issued in reliance upon the exemption
from registration and prospectus delivery requirements of Regulation S.
On or about February 26, 1999, Guy Brooks, Brian Buchanan, Shiraz Hussein and
James Henshall, all officers and/or directors of the Company, purchased 850,000
shares of the Company's common stock for $.005 per share for a total of $4,250.
The transactions qualified for the non-public offering exemption specified by
Section 4(2) of the Securities Act of 1933 and Rule 504 of Regulation D.
Also on February 26, 1999, 13 shareholders paid $.005 per share for 2,610,000
shares of the Company's common stock for a total of $13,050 under the exemption
provided by Rule 504 of Regulation D.
On or about April 2, 1999, 16 shareholders paid $99,249.90, or $.15 per share,
for 661,666 shares of the Company's common stock under an offering exempt for
registration pursuant to Rule 504 of Regulation D.
On or about June 14, 1999, 9 shareholders paid $150,825, or $.25 per share, for
603,300 shares of the Company's common stock under an exemption from
registration specified by Regulation S.
On or about July, 7, 1999, 1 shareholder paid $12,500 or $.25 per share, for
50,000 shares of the Company's common stock under an exemption from registration
specified by Regulation S.
On or about November 5 1999, 1 shareholder paid $20,000, or $.25 per share, for
80,000 shares of the Company's common stock under an exemption from registration
specified by Regulation S.
On or about February 8, 2000, 4 shareholders paid $78,300, or $.25 per share,
for 312,000 shares of the Company's common stock under an exemption from
registration specified by Regulation S.
On or about March 28, 2000, 1 shareholder paid $3,450 or $.25 per share, for
13,800 shares of the Company's common stock under an exemption from registration
specified by Regulation S.
On or about July 5, 2000, 2 shareholders paid $51,517 or $.25 per share, for
206,608 shares of the Company's common stock under an exemption from
registration specified by Regulation S.
k) Description of Securities
The Company is authorized to issue 200,000,000 shares of common stock, $.001 par
value, each share of common stock having equal rights and preferences, including
<PAGE>
voting privileges. The Company is not authorized to issue shares of preferred
stock. As of September 15, 2000, there were 5,8884,734 shares of the Company's
common stock issued and outstanding.
The shares of $.001 par value common stock of the Company constitute equity
interests in the Company entitling each shareholder to a pro rata share of cash
distributions made to shareholders, including dividend payments. The holders of
the Company's common stock are entitled to one vote for each share of record on
all matters to be voted on by shareholders. There is no cumulative voting with
respect to the election of directors of the Company or any other matter, with
the result that the holders of more than 50% of the shares voted for the
election of those directors can elect all of the Directors. The holders of the
Company's common stock are entitled to receive dividends when, as and if
declared by the Company's Board of Directors from funds legally available
therefor; provided, however, that cash dividends are at the sole discretion of
the Company's Board of Directors. In the event of liquidation, dissolution or
winding up of the Company, the holders of common stock are entitled to share
ratably in all assets remaining available for distribution to them after payment
of liabilities of the Company and after provision has been made for each class
of stock, if any, having preference in relation to the Company's common stock.
Holders of the shares of Company's common stock have no conversion, preemptive
or other subscription rights, and there are no redemption provisions applicable
to the Company's common stock. All of the outstanding shares of Company's common
stock are duly authorized, validly issued, fully paid and non-assessable.
(l) Indemnification of Directors and Officers
Currently, the Company does not have a provision in either the Company's
Articles of Incorporation or Bylaws limiting the liability of the Company's
officers and directors. The Company may, in the future and with shareholders'
consent, amend the Company's Articles of Incorporation to limit the liability of
the Company's officers and directors. In such a case, the Company's officers and
directors will not be liable to the Company for monetary damages occurring
because of a breach of their fiduciary duty as officers and directors in certain
circumstances. Such limitation will not affect liability for any breach of an
officer's or director's duty to the Company or the Company's shareholders (i)
with respect to approval by the officer or director of any transaction from
which he or she derives an improper personal benefit, (ii) with respect to acts
or omissions involving an absence of good faith, that he or she believes to be
contrary to the best interests of the Company or the Company's shareholders,
that involve intentional misconduct or a knowing and culpable violation of law,
that constitute an unexcused pattern of inattention that amounts to an
abdication of his or her duty to the Company or the Company's shareholders, or
that indicate a reckless disregard for his or her duty to the Company or the
Company's shareholders in circumstances in which he or she was or should have
been aware, in the ordinary course of performing his or her duties, of a risk of
serious injury to the Company or the Company's shareholders, or (iii) based on
transactions between the Company and the Company's officers and directors or
another corporation with interrelated officers or directors or on improper
distributions, loans or guaranties pursuant to applicable sections of the
General Corporation Law of Nevada. Such limitation of liability does not affect
the availability of equitable remedies such as injunctive relief or rescission.
Indemnification Agreements. The Company anticipates that the Company will enter
into indemnification agreements with each of the Company's directors and
executive officers pursuant to which the Company shall indemnify each such
director and officer for all expenses and liabilities, including criminal
<PAGE>
monetary judgments, penalties and fines, incurred by each such director and
officer in connection with any criminal or civil action brought or threatened
against such director and officer because of such director and officer being or
having been an executive officer or director of the Company. To be entitled to
indemnification by the Company, such person must have acted in good faith and in
a manner such person believed to be in the best interests of the Company and,
with respect to criminal actions, such director and officer must have had no
reasonable cause to believe his or her conduct was unlawful.
DISCLOSURE OF OPINION OF SECURITIES AND EXCHANGE COMMISSION REGARDING
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
INSOFAR AS INDEMNIFICATION FOR LIABILITIES OCCURRING PURSUANT TO THE SECURITIES
ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE
COMPANY PURSUANT TO THE FOREGOING PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT
IT IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE SECURITIES ACT OF
1933 AND IS, THEREFORE, UNENFORCEABLE.
(m) Financial Statements
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with Form 8K (see Item 7 below).
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable
ITEM 4. CHANGES IN REGISTRANT'S ACCOUNTANT.
Not Applicable
ITEM 5. OTHER EVENTS.
Successor Issuer Election
Upon effectiveness of the Merger on October 16, 2000, pursuant to Rule 12g-3(a)
of the General Rules and Regulations of the Commission, the Company became the
successor issuer to Capstra for reporting purposes under the Securities Exchange
Act of 1934 (the "Exchange Act") and elects to report under the Exchange Act
effective October 16, 2000.
ITEM 6. RESIGNATION OF DIRECTORS AND EXECUTIVE OFFICERS.
The officers and directors of Capstra, John Mackay and Rod Saunders, resigned
such offices as a result of the merger with the Company. The officers and
directors of the Company will continue as the officers and directors of the
successors issuer.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
(a) Index to Financial Statements.
Audited Financial Statements of the Company:
Auditors Report F-1
Balance Sheet as at February 28, 1999 and February 29, 2000 F-2
Statement of Operations F-3
Statement of Stockholders' Deficit F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6 through F-8
Unaudited (Auditor Reviewed) Financial Statements:
Independent Accountant's Report F-9
Balance Sheet as at May 31, 2000 and February 29, 2000 F-10
Statement of Operations for Three Months Ended May 31, 2000 F-11
Statement of Stockholders' Deficit from February 10, 1999
to May 31, 2000 F-12
Statement of Cash Flows for Three Months Ended May 31, 2000 F-13
Notes to Financial Statements F-14
Unaudited (Management Prepared) Financial Statements F-15
Balance Sheet as at Aug 31, 2000 and February 29, 2000 F-16
Statement of Operations for six Months Ended August 31, 2000 F-17
Statement of Cash Flows for six Months Ended August 31, 2000 F-18
Statement of Stockholders' Deficit from Inception
to August 31, 2000 F-19
Notes to Financial Statements F-20
<PAGE>
(b) Index to Exhibits.
Copies of the following documents are filed with this Form 8K as exhibits:
Exhibits Page
1 Corporate Charter E-1
2 Articles of Incorporation E-2 through E-4
3 Bylaws E-5 through E-15
4 Intellectual Property Assignment Between Kick
Start Publishing and Greatestescapes.com E-16
through E-17
5 Public Relations Agreement Between Between Kathleen
Carney & Associates and Greatestescapes.com E-18 through E-19
6 Distribution Agreement Between WORDS Distributing
and Greatescapes.com Publishing E-20 through E-32
7 Supplier Agreement Between Organic Buckwheat Pillow
Products of Canada & USA and Greatestescapes.com E-33 through E-40
8 Supplier Agreement Between Microsoie, Inc.
and Greatestescapes.com E-41 through E-48
9 Supplier Agreement Between Ulysses Press
and Greatestescapes.com E-49 through E-57
10 Supplier Agreement Between SunDreamer
and Greatestescapes.com E-58 through E-65
11 Supplier Agreement Between Attart Industries, Inc.
and Greatestescapes.com E-66 through E-73
12 Merger Agreement between the Company
and Capstra Capital Corp. E-74
<PAGE>
F-1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS TO THE BOARD OF DIRECTORS AND
STOCKHOLDERS OF GREATESTESCAPES.COM CORP.(A Development Stage Company)
We have audited the accompanying balance sheets of Greatestescapes.com Corp. as
at February 29, 2000 and February 28, 1999 and the related statements of
operations, shareholders' deficit and cash flows for the year, the initial 19
day period and the period from inception, February 10, 1999 through February 29,
2000. 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 audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. 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. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at February 29, 2000 and
February 28, 1999 and the results of its operations and the cash flows for the
year, the initial 19 day period and the period from inception February 10, 1999
through February 29, 2000 in conformity with generally accepted accounting
principles in the United States.
/s/ Pannell Kerr Forster
Chartered Accountants
Vancouver, Canada
May 4, 2000
<PAGE>
Page F-2
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Balance Sheets
(U.S. Dollars)
February 29, February 28,
2000 1999
--------------------------------------------------------------------------------
Assets
Current
Cash $ 14,090 $ 11,911
Account receivable 3,470 30
--------------------------------------------------------------------------------
17,560 11,941
Property and Equipment (note 3) 2,916 0
Other (note 4) 1 1
--------------------------------------------------------------------------------
$ 20,477 $ 11,942
================================================================================
Liability
Current
Accounts payable $ 23,552 $ 15,460
--------------------------------------------------------------------------------
Commitment (note 7)
Stockholders' Deficit
Common Stock, $0.001 par value; 200,000,000
shares authorized, 5,121,666 (1999 - 4,460,000)
shares issued and outstanding 5,122 4,460
Additional Paid-In Capital 116,428 17,840
Share Subscriptions 150,825 0
Other Comprehensive Income 1,048 0
Accumulated Deficit (276,498) (25,818)
--------------------------------------------------------------------------------
(3,075) (3,518)
--------------------------------------------------------------------------------
$ 20,477 $ 11,942
================================================================================
See notes to financial statements.
<PAGE>
Page F-3
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Statements of Operations
(U.S. Dollars)
Period
from Inception
Initial 19 Day February 10,
Year Ended Period Ended 1999 Through
February 29, February 28, February 29,
2000 1999 2000
--------------------------------------------------------------------------------
Expenses
Administrative and general 24,294 0 24,294
Advertising and promotion 14,798 0 14,798
Bank charges 374 75 449
Corporate development 24,720 0 24,720
Depreciation 515 0 515
Designers, editors and writers 37,999 0 37,999
Investor relations 4,065 0 4,065
Management fees 36,000 0 36,000
Office 8,337 0 8,337
Printing and reproductions 11,051 0 11,051
Professional fees 35,778 25,417 61,195
Regulatory fees 7,990 0 7,990
Telephone 3,815 326 4,141
Website development 40,944 0 40,944
--------------------------------------------------------------------------------
Net Loss for Period $ 250,680 $ 25,818 $ 276,498
================================================================================
Net Loss Per Share $ 0.05 $ 0.01
================================================================================
Weighted Average Number
of Shares Outstanding 4,620,738 4,460,000
================================================================================
See notes to financial statements.
<PAGE>
Page F-4
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Statements of Stockholders' Deficit
(U.S. Dollars)
<TABLE>
<CAPTION>
Additional Other Total
Common Stock Paid-In Share Comprehensive Accumulated Stockholders'
Number Amount Capital Subscriptions Income Deficit Deficit
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 10, 1999
(Inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Issuance of Common
Stock 4,460,000 4,460 17,840 0 0 0 22,300
Net Loss 0 0 0 0 0 (25,818) (25,818)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
February 28, 1999 4,460,000 4,460 17,840 0 0 (25,818) (3,518)
Issuance of Common
Stock 661,666 662 98,588 0 0 0 99,250
Share Subscriptions
Received 0 0 0 150,825 0 0 150,825
Other Comprehensive
Income 0 0 0 0 1,048 0 1,048
Net Loss 0 0 0 0 0 (250,680) (250,680)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
February 29, 2000 5,121,666 $ 5,122 $ 116,428 $ 150,825 $ 1,048 $(276,498) $ (3,075)
===================================================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
Page F-5
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Statements of Cash Flows
(U.S. Dollars)
Period
from Inception
Initial 19 Day February 10,
Year Ended Period Ended 1999 Through
February 29, February 28, February 29,
2000 1999 2000
--------------------------------------------------------------------------------
Operating Activities
Net loss $(250,680) $ (25,818) $(276,498)
Adjustments to reconcile net
loss to net cash used by
operating activities
Depreciation 515 0 515
Changes in operating assets
and liabilities
Account receivable (3,440) (30) (3,470)
Accounts payable 8,092 15,460 23,552
--------------------------------------------------------------------------------
Net Cash Used by Operating
Activities (245,513) (10,388) (255,901)
--------------------------------------------------------------------------------
Investing Activities
Acquisition of intellectual
property 0 (1) (1)
Acquisition of property and
equipment (3,431) 0 (3,431)
--------------------------------------------------------------------------------
Net Cash Used by Investing
Activities (3,431) (1) (3,432)
--------------------------------------------------------------------------------
Financing Activities
Share subscriptions received 150,825 0 150,825
Issuance of common stock 99,250 22,300 121,550
--------------------------------------------------------------------------------
Net Cash Provided by
Financing Activities 250,075 22,300 272,375
--------------------------------------------------------------------------------
Effect of Foreign Currency
Translation on Cash 1,048 0 1,048
--------------------------------------------------------------------------------
Cash Inflow 2,179 11,911 14,090
Cash, Beginning of Period 11,911 0 0
--------------------------------------------------------------------------------
Cash, End of Period $ 14,090 $ 11,911 $ 14,090
================================================================================
See notes to financial statements.
<PAGE>
Page F-6
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Notes to Financial Statements
Year Ended February 29, 2000 and Initial 19 Day Period Ended February 28, 1999
(U.S. Dollars)
1. BACKGROUND AND BUSINESS
The Company was incorporated on February 10, 1999 under the laws of the State of
Nevada. The Company is in the development stage as more fully defined in
statement No. 7. of the Financial Accounting Standards Board. The Company
intends to operate as a multi media travel related publishing enterprise. The
Company markets and will market travel-related products based on the content of
its print publications as well as its digital Internet magazine. Products will
include a wide range of goods including books, individual stories and hundreds
of items in its online store www.GreatestEscapesStore.com. The Company intends
developing other travel products to be sold and distributed through its on-line
department store, two websites www.GreatestEscapesStore.com and
www.LiteraryTrips.com and other more traditional outlets.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Property and equipment
Property and equipment are carried at cost less accumulated depreciation.
Depreciation of property and equipment are calculated as follows:
Equipment and furniture - 30% Declining balance
(b) Foreign currency translation
Amounts recorded in foreign currency are translated into U.S. dollars as
follows:
(i) Current assets and current liabilities, at the rate of exchange in effect at
the balance sheet date;
(ii) Expenses at the average rate of exchange for the period
Gains arising from this translation of foreign currency are accounted for as
other comprehensive income shown as a separate component of stockholders'
deficit.
(c) Net loss per share
Net loss per share computations are based on the weighted average number of
common shares outstanding during the year.
(d) Financial instruments
The Company's financial instruments consist of cash, account receivable and
accounts payable. Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit risk.
<PAGE>
Page F-7
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Notes to Financial Statements
Year Ended February 29, 2000 and Initial 19 Day Period Ended February 28, 1999
(U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES
(e) Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates and would impact future results
of operations and cash flows.
3. PROPERTY AND EQUIPMENT
2000 1999
--------------------------------------------------------------------------------
Accumulated
Cost Depreciation Net Net
--------------------------------------------------------------------------------
Equipment and
furniture $ 3,431 $ 515 $ 2,916 $ 0
================================================================================
4. OTHER ASSET
During the initial 19 day period ended February 28, 1999, the Company purchased
intellectual property from Kick Start Publishing (a Proprietorship) for
consideration of $1.00 cash. This intellectual property includes any trademark,
travel names, associated registrations, etc. specifically relating to Greatest
Escapes Travel Report and Greatest Escapes Travel Webzine.
5. RELATED PARTY TRANSACTIONS
During the year ended February 29, 2000, the Company paid related parties
$89,706 in administration, corporate development, management and professional
fees. The above transactions were completed in the normal course of operations
on normal market terms and were recorded at fair market value as estimated by
management.
6. INCOME TAXES
A deferred tax asset stemming from the Company's net operating loss carry
forward, has been reduced by a valuation account to zero due to uncertainties
regarding the utilization of the deferred assets. At February 29, 2000, the
Company has available a net operating loss carry forward of approximately
$270,000 which it may use to offset future federal taxable income. The net
operating loss carry forward if not utilized, will begin to expire in 2014.
<PAGE>
Page F-8
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Notes to Financial Statements
Year Ended February 29, 2000 and Initial 19 Day Period Ended February 28, 1999
(U.S. Dollars)
7. COMMITMENT
During the year ended February 29, 2000, the Company entered into a marketing
agreement with Net Media, an unrelated third party. The Company agreed to
compensate Net Media for services rendered with the following:
i) 50,000 common shares of the Company;
ii) 20% sales commission on all advertising placed and/or contracted directly or
indirectly by Net Media for the Company and their affiliates;
iii) 20% production commission on all required material;
iv) $5,000 monthly draw against production and sales commissions earned; and,
v) 8-10% on on-line product and service sales introduced by Net Media (unless
otherwise agreed prior to listing the product or service).
Subsequent to the year end, the Company terminated its agreement with Net Media
for non- performance. It is management's opinion that amounts paid to the date
of this report will satisfy the Company's obligations under the agreement.
<PAGE>
Page F-9
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Financial Statements
(U.S. Dollars)
May 31, 2000 and February 29, 2000
(Unaudited)
INDEX Page
Independent Accountant's Report 1
Financial Statements
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Deficit 4
Statements of Cash Flows 5
Notes to the Financial Statements 6
--------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANT'S REPORT
We have reviewed the accompanying interim financial statements of
Greatestescapes.com Corp. as at May 31, 2000, and for the three month period
then ended. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
date and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying statements for them to be in conformity with
generally accepted accounting principles.
/s/ Pannell Kerr Forster
Chartered Accountants
Vancouver, Canada
July 15, 2000
<PAGE>
Page F-10
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Balance Sheets
(U.S. Dollars)
(Unaudited)
May 31, February 29,
2000 2000
--------------------------------------------------------------------------------
Assets
Current
Cash $ 8,831 $ 14,090
Account receivable 10,926 3,470
--------------------------------------------------------------------------------
Total Current Assets 19,757 17,560
Property and Equipment 2,697 2,916
Other 1 1
--------------------------------------------------------------------------------
Total Assets $ 22,455 $ 20,477
================================================================================
Liability
Current
Accounts payable and accrued liabilities $ 30,809 $ 23,552
--------------------------------------------------------------------------------
Stockholders' Deficit
Common Stock, $0.001 par value; 200,000,000 shares
authorized, 5,121,666 shares issued and outstanding 5,122 5,122
Additional Paid-In Capital 116,428 116,428
Share Subscriptions 246,800 150,825
Other Comprehensive Income 340 1,048
Accumulated Deficit (377,044) (276,498)
--------------------------------------------------------------------------------
Total Stockholders' Deficit (8,354) (3,075)
--------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit $ 22,455 $ 20,477
================================================================================
See notes to financial statements.
<PAGE>
Page F-11
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Statements of Operations
(U.S. Dollars)
(Unaudited)
Period
from Inception
February 10,
1999 Through
Three Months Ended May 31, May 31,
2000 1999 2000
--------------------------------------------------------------------------------
Expenses
Administrative and general $ 6,750 $ 3,726 $ 31,044
Advertising and promotion 1,736 0 16,534
Bank charges 342 69 791
Corporate development 6,000 8,720 30,720
Depreciation 219 0 734
Designers, editors and writers 6,280 1,544 44,279
Investor relations 7,125 3,028 11,190
Management fees 5,597 24,000 41,597
Office 2,093 2,663 10,430
Printing and reproductions 4,923 443 15,974
Professional fees 45,516 8,194 106,711
Regulatory fees 990 6,465 8,980
Telephone 1,635 895 5,776
Website development 11,340 3,365 52,284
--------------------------------------------------------------------------------
Net Loss for Period $ 100,546 $ 63,112 $ 377,044
================================================================================
Net Loss Per Share $ 0.02 $ 0.01
================================================================================
Weighted Average Number of
Shares Outstanding 5,121,666 4,576,393
================================================================================
See notes to financial statements.
<PAGE>
Page F-12
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Statements of Stockholders' Deficit
Period from Inception to May 31, 2000
(U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Additional Other Total
Common Stock Paid-In Share Comprehensive Accumulated Stockholders'
Number Amount Capital Subscriptions Income Deficit Deficit
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 10, 1999
(Inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Issuance of Common
Stock 4,460,000 4,460 17,840 0 0 0 22,300
Net Loss 0 0 0 0 0 (25,818) (25,818)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
February 28, 1999 4,460,000 4,460 17,840 0 0 (25,818) (3,518)
Issuance of Common
Stock 661,666 662 98,588 0 0 0 99,250
Share Subscriptions
Received 0 0 0 150,825 0 0 150,825
Other Comprehensive
Income 0 0 0 0 1,048 0 1,048
Net Loss 0 0 0 0 0 (250,680) (250,680)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
February 29, 2000 5,121,666 5,122 116,428 150,825 1,048 (276,498) (3,075)
Share Subscriptions
Received 0 0 0 95,975 0 0 95,975
Other Comprehensive
Income 0 0 0 0 (708) 0 (708)
Net Loss 0 0 0 0 0 (100,546) (100,546)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, May 31, 2000 5,121,666 $ 5,122 $ 116,428 $ 246,800 $ 340 $(377,044) $ (8,354)
===================================================================================================================================
</TABLE>
See notes to financial statements.
<PAGE>
Page F-13
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Statements of Cash Flows
(U.S. Dollars)
(Unaudited)
Period
from Inception
February 10,
1999 Through
Three Months Ended May 31, May 31,
2000 1999 2000
--------------------------------------------------------------------------------
Operating Activities
Net loss $ (100,546) $ (63,112) $ (377,044)
Adjustments to reconcile net
loss to net cash used by
operating activities
Depreciation 219 0 734
Changes in operating assets
and liabilities
Account receivable (7,456) (883) (10,926)
Accounts payable 7,257 (10,052) 30,809
--------------------------------------------------------------------------------
Net Cash Used by Operating
Activities (100,526) (74,047) (356,427)
--------------------------------------------------------------------------------
Investing Activities
Acquisition of intellectual
property 0 0 (1)
Acquisition of property and
equipment 0 (2,377) (3,431)
--------------------------------------------------------------------------------
Net Cash Used by Investing
Activities 0 (2,377) (3,432)
--------------------------------------------------------------------------------
Financing Activities
Share subscriptions received 95,975 0 246,800
Issuance of common stock 0 99,250 121,550
--------------------------------------------------------------------------------
Net Cash Provided by Financing
Activities 95,975 99,250 368,350
--------------------------------------------------------------------------------
Effect of Foreign Currency
Translation on Cash (708) (223) 340
--------------------------------------------------------------------------------
Cash Inflow (Outflow) (5,259) 22,603 8,831
Cash, Beginning of Period 14,090 11,911 0
--------------------------------------------------------------------------------
Cash, End of Period $ 8,831 $ 34,514 $ 8,831
================================================================================
See notes to financial statements.
<PAGE>
Page F-14
--------------------------------------------------------------------------------
GREATESTESCAPES.COM CORP.
(A Development Stage Company)
Notes to Financial Statements
Three Months Ended May 31, 2000
(U.S. Dollars)
(Unaudited)
1. BASIS OF PRESENTATION
These unaudited financial statements have been prepared in accordance with
generally accepted accounting principles in the United States for interim
financial information. These financial statements are condensed and do not
include all disclosures required for annual financial statements. The
organization and business of the Company, accounting policies followed by the
Company and other information are contained in the notes to the Company's
February 29, 2000 audited financial statements.
In the opinion of the Company's management, these financial statements reflect
all adjustments necessary to present fairly the Company's financial position at
May 31, 2000, the results of operations and its cash flows for the three months
ended May 31, 2000 and 1999. The results of operations for the three months
ended May 31, 2000 are not necessarily indicative of the results to be expected
for the entire fiscal year.
2. COMPARATIVE FIGURES
Operating results for the three month period ended May 31, 1999 were not audited
or reviewed.
<PAGE>
Page F-15
GreatestEscapes.com, Inc.
(A Development Stage Company)
Financial Statements
(Stated in U.S. Dollars)
August 31, 2000 and February 29, 2000
(Unaudited)
<PAGE>
Page F-16
GreatestEscapes.com, Inc.
(A Development Stage Company)
Balance Sheets
(Stated in U.S. Dollars)
(Unaudited)
================================================================================
August 31, February 29,
2000 2000
$ $
--------------------------------------------------------------------------------
Assets
Current
Cash and term deposits 2,171 14,090
Accounts receivable 8,861 3,470
--------------------------------------------------------------------------------
11,032 17,560
Property and Equipment 7,833 2,916
Other 1 1
--------------------------------------------------------------------------------
Total Assets 18,866 20,477
--------------------------------------------------------------------------------
Liabilities
Current
Accounts payable and accrued liabilities 44,222 23,552
--------------------------------------------------------------------------------
Stockholders' Deficit
Common Stock, $0.001 par value; 200,000,000
shares authorized,
5,884,734 shares issued and outstanding 5,885 5,122
Additional Paid-In Capital 306,432 116,428
Share Subscriptions 117,633 150,825
Other Comprehensive Income 325 1,048
Accumulated Deficit (455,631) (276,498)
--------------------------------------------------------------------------------
Total Stockholders' Deficit (25,356) (3,075)
--------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit 18,866 20,477
--------------------------------------------------------------------------------
<PAGE>
Page F-17
GreatestEscape.com, Inc.
(A Development Stage Company)
Statements of Operations
(U.S. Dollars)
(Unaudited)
================================================================================
Period
Six months Six Months from Inception
ended ended February 10,
August 31, August 31, 1999 Through
2000 1999 August 31, 2000
$ $ $
--------------------------------------------------------------------------------
Revenue 8,203 0 8,203
--------------------------------------------------------------------------------
Expenses
Administrative and general 17,480 11,690 41,774
Advertising and promotion 4,058 2,850 18,856
Bank charges and interest 598 152 1,047
Corporate development 12,038 13,610 36,758
Depreciation 871 180 1,386
Designers, editors and writers 17,027 14,335 55,026
Investor communications 7,655 3,029 11,720
Management fees 5,936 36,000 41,936
Office 13,464 4,832 21,801
Printing and reproductions 7,893 1,014 18,944
Professional fees 63,196 17,775 124,391
Regulatory filing fees 1,227 6,912 9,217
Telephone and faxes 2,852 1,862 6,993
Website development 33,041 12,704 73,985
--------------------------------------------------------------------------------
187,336 126,945 463,834
--------------------------------------------------------------------------------
Net Loss for the period (179,133) (126,945) (455,631)
--------------------------------------------------------------------------------
<PAGE>
Page F-18
GreatestEscape.com, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Stated in U.S. Dollars)
(Unaudited)
================================================================================
Period
Six months Six Months from Inception
ended ended February 10,
August 31, August 31, 1999 Through
2000 1999 August 31, 2000
$ $ $
--------------------------------------------------------------------------------
Operating Activities
Net loss (179,133) (126,945) (455,631)
Adjustments to reconcile net
loss to net cash used by
operating activities
Depreciation 871 180 1,386
Changes in Operating Assets and
Liabilities
Accounts receivable (5,391) (1,865) (8,861)
Accounts payable 20,670 (10,052) 44,222
--------------------------------------------------------------------------------
Net Cash Used in Operating
Activities (162,983) (138,682) (418,884)
--------------------------------------------------------------------------------
Investing Activities
Acquisition of intellectual property 0 0 (1)
Acquisition of property and equipment (5,788) (2,377) 2,357
--------------------------------------------------------------------------------
(5,788) (2,377) 2,356
--------------------------------------------------------------------------------
Financing Activities
Share subscriptions received 157,575 146,750 308,400
Issuance of common stock 0 0 121,550
--------------------------------------------------------------------------------
Net Cash Provided by Financing
Activities 157,575 146,750 429,950
--------------------------------------------------------------------------------
Effect of Foreign Currency
Translation on Cash (723) - 325
--------------------------------------------------------------------------------
Cash Inflow (Outflow) (11,919) 5,691 2,171
Cash, Beginning of Period 14,090 11,911 0
--------------------------------------------------------------------------------
Cash, End of period 2,171 17,602 2,171
--------------------------------------------------------------------------------
<PAGE>
Page F-19
GreatestEscape.com Inc.
(A Development Stage Company)
Statement of Shareholders' Deficit
Period from Inception to August 31, 2000
(Stated in U.S. Dollars)
(Unaudited)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Common Stock Additional Other Total
Paid-In Share Comprehensive Accumulated Stockholders'
Number Amount Capital Subscriptions Income Deficit Equity
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 10, 1999
(Inception) 0 0 0 0 0 0 0
Issuance of Common Stock 4,460,000 4,460 17,840 0 0 0 22,300
Net Loss 0 0 0 0 0 (25,818) (25,818)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
February 28, 1999 4,460,000 4,460 17,840 0 0 (25,818) (3,518)
Issuance of Common Stock 661,666 662 98,588 0 0 0 99,250
Share Subscriptions
Received 0 0 0 150,825 0 0 150,825
Other Comprehensive Income 0 0 0 0 1,048 0 1,048
Net Loss 0 0 0 0 0 (250,680) (250,680)
-----------------------------------------------------------------------------------------------------------------------------------
Balance,
February 29, 2000 5,121,666 5,122 116,428 150,825 1,048 (276,498) (3,075)
Issuance of Common Stock 763,068 763 190,004 (190,767) 0 0 0
Share Subscriptions
Received 0 0 0 157,575 0 0 157,575
Other Comprehensive 0 0 0 0 (723) 0 (723)
Net Loss 0 0 0 0 0 (179,133) (179,133)
-----------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2000 5,884,734 5,885 306,432 117,633 325 (455,631) (25,356)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Page F-20
GreatestEscape.com Inc.
(A Development Stage Company)
Notes to Financial Statements
Six Months Ended August 31, 2000
(Stated in U.S. Dollars)
(Unaudited)
================================================================================
1. BASIS OF PRESENTATION
These unaudited financial statements are condensed and do not include all
disclosures required for annual financial statements. The organization and
business of the Company, accounting policies followed by the Company and
other information are contained in the notes to the Company's February 29,
2000 audited financial statements.
<PAGE>
Item 8. Change in Fiscal Year.
Not Applicable
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREATESTESCAPES.COM CORP.
--------------------------------------
(Registrant)
Dated: October 16, 2000 . By: /s/ Guy Brooks
--------------------------------------
Guy Brooks President
<PAGE>
EXHIBITS
THE GREAT SEAL OF THE STATE OF NEVADA
[SEAL]
STATE OF NEVADA
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that GREATESTESCAPES.COM CORP. did on FEBRUARY 10, 1999, file in
this office the original Articles of Incorporation; that said Articles are now
on file and of record in the office of the Secretary of State of the State of
Nevada, and further, that said Articles contain all the provisions required by
the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of
State, at my office, in Las Vegas, Nevada, on FEBRUARY 10, 1999.
THE GREAT SEAL OF THE STATE OF NEVADA
[SEAL]
/s/ Dean Heller
Secretary of State
By /s/ [ILLEGIBLE]
Certification Clerk
<PAGE>
E-1
--------------------------------------------------------------------------------
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
FEB 10 1999
No. C3145-99
------------
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
Greatestescapes.Com Corp.
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, have this day voluntarily associated ourselves together
for the purposes of forming a corporation under the laws of the State of Nevada
and we do hereby certify:
I
The name of this corporation is Greatestescapes.Com Corp.
II
The resident agent of said corporation shall be Pacific Corporate Services, Inc,
7631 Bermuda Road, Las Vegas NV 89123 and such other offices as may be
determined by the By-Laws in and outside of the State of Nevada.
III
The objects to be transacted, business and pursuit and nature of the business,
promoted or carried on by this corporation are and shall continue to be engaged
in any lawful activity except banking or insurance.
IV
The members of the governing board shall be styled Directors and the first Board
of Directors shall consist of one (1). The number of stockholders of said
corporation shall consist of one (1). The number of directors and stockholders
of this corporation may, from time to time, be increased or decreased by an
amendment to the Buy-laws of this Corporation in that regard, and without the
necessity of amending these Articles of Incorporation. The names and addresses
of the first Board of Directors and of the incorporators signing these Articles
are as follows:
Kathy Whyte 16688-102 Avenue, Surrey, B.C. Canada V4N 4X2
V
The Corporation is to have perpetual existence.
<PAGE>
E-2
--------------------------------------------------------------------------------
VI
The total authorized capitalization of this Corporation shall be and is the sum
of 200,000,000 shares of Common Stock at $0.001 par value, said stock to carry
full voting power and the said shares shall be issued fully paid at such time as
the Board of Directors may designate, in exchange for cash, property, or
services, the stock of other corporations or other values, rights or things, and
the judgment of the Board of Directors as to the value thereof shall be
conclusive.
VII
The capital stock shall be and remain non-assessable. The private property of
the stockholders shall not be liable for the debts or liabilities of the
Corporation.
IN WITNESS WHEREOF, I have set my hand this 8th day of February, 1999.
/s/ K. Whyte
------------------------------------
Kathy Whyte
CITY OF SURREY, )
PROVINCE OF BRITISH )
COLUMBIA )
On this 8 day of February, 1999, before me a Notary Public in and for said City
of Surrey, Province of British Columbia, personally appeared, Kathy Whyte, known
to me to be the person whose name is subscribed to the foregoing instrument, and
she duly acknowledged to me that she executed the sane for the purpose therein
mentioned.
IN WITNESS WHEREOF, I have set my hand and offered by official seal in the said
City of Surrey, Province of British Columbia, Canada, the day and year in this
Certificate first above written.
/s/ Janice A. McMath
-----------------------------
Notary Public
JANICE A. McMATH
NOTARY PUBLIC
200, 10351 - 150 STREET
SURREY, B.C. V3R 4B1 588-1202
<PAGE>
E-3
--------------------------------------------------------------------------------
STATE OF NEVADA
Secretary of State
I hereby certify that this is a
true and complete copy of
the document as filed in this
office.
FEB 10 '99
/s/ Dean Heller
DEAN HELLER
Secretary of State
By: /s/ [ILLEGIBLE]
----------------------
<PAGE>
E-4
--------------------------------------------------------------------------------
BY-LAWS
OF
Greatestescapes.Com Corp.
A Nevada Corporation
ARTICLE I - OFFICES
The registered office of the Corporation in the State of Nevada shall be located
in the City and State designated in the Articles of Incorporation. The
Corporation may also maintain offices at such other places within or without the
State of Nevada as the Board of Directors may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings: (Chapter 78.310)
The annual meeting of the shareholders of the Corporation shall be held at the
time fixed, from time to time, by the Directors.
Section 2 - Special Meetings: (Chapter 78.310)
Special meetings of the shareholders may be called by the Board of Directors or
such person or persons authorized by the Board of Directors and shall be held
within or without the State of Nevada.
Section 3 - Place of Meetings: (Chapter 78.310)
Meetings of shareholders shall be held at the registered office of the
Corporation, or at such other places, within or without the State of Nevada as
the Directors may from time to time fix. If no designation is made, the meeting
shall be held at the Corporation's registered office in the state of Nevada.
Section 4 - Notice of Meetings: (Section 78.370)
(a) Written or printed notice of each meeting of shareholders, whether annual or
special, signed by the president, vice president or secretary, stating the time
when and place where it is to be held, as well as the purpose or purposes for
which the meeting is called, shall be served either personally or by mail, by or
at the direction of the president, the secretary, or the officer or the person
calling the meeting, not less than ten or more than sixty days before the date
of the meeting, unless the lapse of the prescribed time shall have been waived
before or after the taking of such action, upon each shareholder of record
entitled to vote at such meeting, and to any other shareholder to whom the
giving of notice may be required by law. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, addressed to the
shareholder as it appears on the share transfer records of the Corporation or to
the current address, which a shareholder has delivered to the Corporation in a
written notice.
--------------------------------------------------------------------------------
* Unless otherwise stated herein all references to "Sections" in these Bylaws
refer to those sections contained in Title 78 of the Nevada Private Corporations
Law.
NV Bylaws-1
<PAGE>
E-5
--------------------------------------------------------------------------------
(b) Further notice to a shareholder is not required when notice of two
consecutive annual meetings, and all notices of meetings or of the taking of
action by written consent without a meeting to him or her during the period
between those two consecutive annual meetings; or all, and at least two payments
sent by first-class mail of dividends or interest on securities during a
12-month period have been mailed addressed to him or her at his or her address
as shown on the records of the Corporation and have been returned undeliverable.
Section 5 - Quorum: (Section 78.320)
(a) Except as otherwise provided herein, or by law, or in the Articles of
Incorporation (such Articles and any amendments thereof being hereinafter
collectively referred to as the "Articles of Incorporation"), a quorum shall be
present at all meetings of shareholders of the Corporation, if the holders of a
majority of the shares entitled to vote on that matter are represented at the
meeting in person or by proxy.
(b) The subsequent withdrawal of any shareholder from the meeting, after the
commencement of a meeting, or the refusal of any shareholder represented in
person or by proxy to vote, shall have no effect on the existence of a quorum,
after a quorum has been established at such meeting.
(c) Despite the absence of a quorum at any meeting of shareholders, the
shareholders present may adjourn the meeting.
Section 6 - Voting and Acting: (Section 78.320 & 78.350)
(a) Except as otherwise provided by law, the Articles of Incorporation, or these
Bylaws, any corporate action, the affirmative vote of the majority of shares
entitled to vote on that matter and represented either in person or by proxy at
a meeting of shareholders at which a quorum is present, shall be the act of the
shareholders of the Corporation.
(b) Except as otherwise provided by statute, the Certificate of Incorporation,
or these bylaws, at each meeting of shareholders, each shareholder of the
Corporation entitled to vote thereat, shall be entitled to one vote for each
share registered in his name on the books of the Corporation.
(c) Where appropriate communication facilities are reasonably available, any or
all shareholders shall have the right to participate in any shareholders'
meeting, by means of conference telephone or any means of communications by
which all persons participating in the meeting are able to hear each other.
Section 7 - Proxies: (Section 78.355)
Each shareholder entitled to vote or to express consent or dissent without a
meeting, may do so either in person or by proxy, so long as such proxy is
executed in writing by the shareholder himself, his authorized officer,
director, employee or agent or by causing the signature of the stockholder to be
affixed to the writing by any reasonable means, including, but not limited to, a
facsimile signature, or by his attorney-in-fact there unto duly authorized in
writing. Every proxy shall be revocable at will unless the proxy conspicuously
states that it is irrevocable and the proxy is coupled with an interest. A
telegram, telex, cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, shall be treated as a valid proxy, and
treated as a substitution of the original proxy, so long as such transmission is
a complete reproduction executed by the shareholder. If it is determined that
NV Bylaws-2
<PAGE>
E-6
--------------------------------------------------------------------------------
the telegram, cablegram or other electronic transmission is valid, the persons
appointed by the Corporation to count the votes of shareholders and determine
the validity of proxies and ballots or other persons making these determinations
must specify the information upon which they relied. No proxy shall be valid
after the expiration of six months from the date of its execution, unless
otherwise provided in the proxy. Such instrument shall be exhibited to the
Secretary at the meeting and shall be filed with the records of the Corporation.
If any shareholder designates two or more persons to act as proxies, a majority
of those persons present at the meeting, or, if one is present, then that one
has and may exercise all of the powers conferred by the shareholder upon all of
the persons so designated unless the shareholder provides otherwise.
Section 8 - Action Without a Meeting: (Section 78.320)
Unless otherwise provided for in the Articles of Incorporation of the
Corporation, any action to be taken at any annual or special shareholders'
meeting, may be taken without a meeting, without prior notice and without a vote
if written consents are signed by a majority of the shareholders of the
Corporation, except however if a different proportion of voting power is
required by law, the Articles of Incorporation or these Bylaws, than that
proportion of written consents is required. Such written consents must be filed
with the minutes of the proceedings of the shareholders of the Corporation.
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number, Term, Election and Qualifications: (Section 78.115, 78.330)
(a) The first Board of Directors and all subsequent Boards of the Corporation
shall consist of (), not less than 1 nor more than 9, unless and until otherwise
determined by vote of a majority of the entire Board of Directors. The Board of
Directors or shareholders all have the power, in the interim between annual and
special meetings of the shareholders, to increase or decrease the number of
Directors of the Corporation. A Director need not be a shareholder of the
Corporation unless the Certificate of Incorporation of the Corporation or these
Bylaws so require.
(b) Except as may otherwise be provided herein or in the Articles of
Incorporation, the members of the Board of Directors of the Corporation shall be
elected at the first annual shareholders' meeting and at each annual meeting
thereafter, unless their terms are staggered in the Articles of Incorporation of
the Corporation or these Bylaws, by a plurality of the votes cast at a meeting
of shareholders, by the holders of shares entitled to vote in the election.
(c) The first Board of Directors shall hold office until the first annual
meeting of shareholders and until their successors have been duly elected and
qualified or until there is a decrease in the number of Directors. Thereinafter,
Directors will be elected a the annual meeting of shareholders and shall hold
office until the annual meeting of the shareholders next succeeding his
election, unless their terms are staggered in the Articles of Incorporation of
the Corporation (so long as at least one-fourth in number of the Directors of
the Corporation are elected at each annual shareholders' meeting) or these
Bylaws, or until his prior death resignation or removal. Any Director may resign
at any time upon written notice of such resignation to the Corporation.
NV Bylaws-3
<PAGE>
E-7
--------------------------------------------------------------------------------
(d) All Directors of the Corporation shall have equal voting power unless the
Articles of Incorporation of the Corporation provide that the voting power of
individual Directors or classes of Directors are greater than or less than that
of any other individual Directors or classes of Directors, and the different
voting powers may be stated in the Articles of Incorporation or may be dependent
upon any fact or event that may be ascertained outside the Articles of
Incorporation if the manner in which the fact or event may operate on those
voting powers is stated in the Articles of Incorporation. If the Articles of
Incorporation provide that any Directors have voting power greater than or less
than other Directors of the Corporation, every reference in these Bylaws to a
majority or other proportion of Directors shall be deemed to refer to majority
or other proportion of the voting power of all Directors or classes of
Directors, as may be required by the Articles of Incorporation.
Section 2 - Duties and Powers: (Section 78.120)
The Board of Directors shall be responsible for the control and management of
the business and affairs, property and interests of the Corporation, and may
exercise all powers of the Corporation, except such as those stated under Nevada
state law, are in the Articles of Incorporation or by these Bylaws, expressly
conferred upon or reserved to the shareholders or any other person or persons
named therein.
Section 3 - Regular Meetings; Notice: (Section 78.310)
(a) A regular meeting of the Board of Directors shall be held either within or
without the State of Nevada at such time and at such place as the Board shall
fix.
(b) No notice shall be required of any regular meeting of the Board of Directors
and, if given, need not specify the purpose of the meeting; provided, however,
that in case the Board of Directors shall fix or change the time or place of any
regular meeting when such time and place was fixed before such change, notice of
such action shall be given to each director who shall not have been present at
the meeting at which such action was taken within the time limited, and in the
manner set forth in these Bylaws with respect to special meetings, unless such
notice shall be waived in the manner set forth in these Bylaws.
Section 4 - Special Meetings; Notice: (Section 78.310)
(a) Special meetings of the Board of Directors shall be held at such time and
place as may be specified in the respective notices or waivers of notice
thereof.
(b) Except as otherwise required statute, written notice of special meetings
shall be mailed directly to each Director, addressed to him at his residence or
usual place of business, or delivered orally, with sufficient time for the
convenient assembly of Directors thereat, or shall be sent to him at such place
by telegram, radio or cable, or shall be delivered to him personally or given to
him orally, not later than the day before the day on which the meeting is to be
held. If mailed, the notice of any special meeting shall be deemed to be
delivered on the second day after it is deposited in the United States mails, so
addressed, with postage prepaid. If notice is given by telegram, it shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
NV Bylaws-4
<PAGE>
E-8
--------------------------------------------------------------------------------
A notice, or waiver of notice, except as required by these Bylaws, need not
specify the business to be transacted at or the purpose or purposes of the
meeting.
(c) Notice of any special meeting shall not be required to be given to any
Director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or after the meeting. Notice of any adjourned meeting
shall not be required to be given.
Section 5 - Chairperson:
The Chairperson of the Board, if any and if present, shall preside at all
meetings of the Board of Directors. If there shall be no Chairperson, or he or
she shall be absent, then the President shall preside, and in his absence, any
other director chosen by the Board of Directors shall preside.
Section 6 - Quorum and Adjournments (Section 78.315)
(a) At all meetings of the Board of Directors, or any committee thereof, the
presence of a majority of the entire Board, or such committee thereof, shall
constitute a quorum for the transaction of business, except as otherwise
provided by law, by the Certificate of Incorporation, or these Bylaws.
(b) A majority of the directors present at the time and place of any regular or
special meeting, although less than a quorum, may adjourn the same from time to
time without notice, whether or not a quorum exists. Notice of such adjourned
meeting shall be given to Directors not present at time of the adjournment and,
unless the time and place of the adjourned meeting are announced at the time of
the adjournment, to the other Directors who were present at the adjourned
meeting.
Section 7 - Manner of Acting: (Section 78.315)
(a) At all meetings of the Board of Directors, each director present shall have
one vote, irrespective of the number of shares of stock, if any, which he may
hold.
(b) Except as otherwise provided by law, by the Articles of Incorporation, or
these bylaws, action approved by a majority of the votes of the Directors
present at any meeting of the Board or any committee thereof, at which a quorum
is present shall be the act of the Board of Directors or any committee thereof.
(c) Any action authorized in writing made prior or subsequent to such action, by
all of the Directors entitled to vote thereon and filed with the minutes of the
Corporation shall be the act of the Board of Directors, or any committee
thereof, and have the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of the Board or committee for all
purposes.
(c) Where appropriate communications facilities are reasonably available, any or
all directors shall have the right to participate in any Board of Directors
NV Bylaws-5
<PAGE>
E-9
--------------------------------------------------------------------------------
meeting, or a committee of the Board of Directors meeting, by means of
conference telephone or any means of communications by which all persons
participating in the meeting are able to hear each other.
Section 8 - Vacancies: (Section 78.335)
(a) Unless otherwise provided for by the Articles of Incorporation of the
Corporation, any vacancy in the Board of Directors occurring by reason of an
increase in the number of directors, or by reason of the death, resignation,
disqualification, removal or inability to act of any director, or other cause,
shall be filled by an affirmative vote of a majority of the remaining directors,
though less than a quorum of the Board or by a sole remaining Director, at any
regular meeting or special meeting of the Board of Directors called for that
purpose except whenever the shareholders of any class or classes or series
thereof are entitled to elect one or more Directors by the Certificate of
Incorporation of the Corporation, vacancies and newly created directorships of
such class or classes or series may be filled by a majority of the Directors
elected by such class or classes or series thereof then in office, or by a sole
remaining Director so elected.
(b) Unless otherwise provided for by law, the Articles of Incorporation or these
Bylaws, when one or more Directors shall resign from the board and such
resignation is effective at a future date, a majority of the directors, then in
office, including those who have so resigned, shall have the power to fill such
vacancy or vacancies, the vote otherwise to take effect when such resignation or
resignations shall become effective.
Section 9 - Resignation: (Section 78.335)
A Director may resign at any time by giving written notice of such resignation
to the Corporation.
Section 10 - Removal (Section 78.335)
Unless otherwise provided for by the Articles of Incorporation, one or more or
all the Directors of the Corporation may be removed with or without cause at any
time by a vote of two-thirds of the shareholders entitled to vote thereon, at a
special meeting of the shareholders called for that purpose, unless the Articles
of Incorporation provide that Directors may only be removed for cause, provided
however, such Director shall not be removed if the Corporation states in its
Articles of Incorporation that its Directors shall be elected by cumulative
voting and there are a sufficient number of shares cast against his or her
removal, which if cumulatively voted at an election of Directors would be
sufficient to elect him or her. If a Director was elected by a voting group of
shareholders, only the shareholders of that voting group may participate in the
vote to remove that Director.
Section 11 - Compensation (Section 78.140)
The Board of Directors may authorize and establish reasonable compensation of
the Directors for services to the Corporation as Directors, including, but not
limited to attendance at any annual or special meeting of the Board.
NV Bylaws-6
<PAGE>
E-10
--------------------------------------------------------------------------------
Section 12 - Committees: (Section 78.125)
Unless otherwise provided for by the Articles of Incorporation of the
Corporation, the Board of Directors, may from time to time designate from among
its members one or more committees, and alternate members thereof, as they deem
desirable, each consisting of one or more members, with such powers and
authority (to the extent permitted by law and these Bylaws) as may be provided
in such resolution. Unless the Articles of Incorporation or Bylaws state
otherwise, the Board of Directors may appoint natural persons who are not
Directors to serve on such committees authorized herein. Each such committee
shall serve at the pleasure of the Board and, unless otherwise stated by law,
the Certificate of Incorporation of the Corporation or these Bylaws, shall be
governed by the rules and regulations stated herein regarding the Board of
Directors.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office: (Section
78.130)
(a) The Corporation's officers shall have such titles and duties as shall be
stated in these Bylaws or in a resolution of the Board of Directors which is not
inconsistent with these Bylaws. The officers of the Corporation shall consist of
a president, secretary and treasurer, and also may have one or more vice
presidents, assistant secretaries and assistant treasurers and such other
officers as the Board of Directors may from time to time deem advisable. Any
officer may hold two or more offices in the Corporation.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
duly elected and qualified, subject to earlier termination by his or her death,
resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation
to the Corporation.
Section 3 - Removal:
Any officer elected by the Board of Directors may be removed, either with or
without cause, and a successor elected by the Board at any time, and any officer
or assistant officer, if appointed by another officer, may likewise be removed
by such officer.
Section 4 - Vacancies:
(a) A vacancy, however caused, occurring in the Board and any newly created
Directorships resulting from an increase in the authorized number of Directors
may be filled by the Board of Directors.
NV Bylaws-7
<PAGE>
E-11
--------------------------------------------------------------------------------
Section 5 - Bonds:
The Corporation may require any or all of its officers or Agents to post a bond,
or otherwise, to the Corporation for the faithful performance of their positions
or duties.
Section 6 - Compensation:
The compensation of the officers of the Corporation shall be fixed from time to
time by the Board of Directors.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock: (Section 78.235)
<PAGE>
(a) The shares of the Corporation shall be represented by certificates or shall
be uncertificated shares.
(b) Certificated shares of the Corporation shall be signed, (either manually or
by facsimile), by officers or agents designated by the Corporation for such
purposes, and shall certify the number of shares owned by him in the
Corporation. Whenever any certificate is countersigned or otherwise
authenticated by a transfer agent or transfer clerk, and by a registrar, then a
facsimile of the signatures of the officers or agents, the transfer agent or
transfer clerk or the registrar of the Corporation may be printed or
lithographed upon the certificate in lieu of the actual signatures. If the
Corporation uses facsimile signatures of its officers and agents on its stock
certificates, it cannot act as registrar of its own stock, but its transfer
agent and registrar may be identical if the institution acting in those dual
capacities countersigns or otherwise authenticates any stock certificates in
both capacities. If any officer who has signed or whose facsimile signature has
been placed upon such certificate, shall have ceased to be such officer before
such certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer at the date of its issue.
(c) If the Corporation issues uncertificated shares as provided for in these
Bylaws, within a reasonable time after the issuance or transfer of such
uncertificated shares, and at least annually thereafter, the Corporation shall
send the shareholder a written statement certifying the number of shares owned
by such shareholder in the Corporation,
(d) Except as otherwise provided by law, the rights and obligations of the
holders of uncertificated shares and the rights and obligations of the holders
of certificates representing shares of the same class and series shall be
identical.
Section 2 - Lost or Destroyed Certificates: (Section 104.8405)
The Board of Directors may direct a new certificate or certificates to be issued
in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed if the owner:
(a) so requests before the Corporation has notice that the shares have been
acquired by a bona fide purchaser.
NV Bylaws-8
<PAGE>
E-12
--------------------------------------------------------------------------------
(b) files with the Corporation a sufficient indemnity bond; and
(c) satisfies such other requirements, including evidence of such loss, theft or
destruction, as may be imposed by the Corporation.
Section 3 - Transfers of Shares: (Section 104.8401, 104.8406, & 104.8416)
(a) Transfers or registration of transfers of shares of the Corporation shall be
made on the stock transfer books of the Corporation by the registered holder
thereof, or by his attorney duly authorized by a written power of attorney; and
in the case of shares represented by certificates, only after the surrender to
the Corporation of the certificates representing such shares with such shares
properly endorsed, with such evidence of the authenticity of such endorsement,
transfer, authorization and other matters as the Corporation may reasonably
require, and the payment of all stock transfer taxes due thereon.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares as the absolute owner thereof for all purposes and, accordingly, shall
not be bound to recognize any legal, equitable or other claim to, or interest
in, such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4 - Record Date: (Section 78.215 & 78.350)
(a) The Board of Directors may fix, in advance, which shall not be more than
sixty days before the meeting or action requiring a determination of
shareholders, as the record date for the determination of shareholders entitled
to receive notice of, or to vote at, any meeting of shareholders, or to consent
to any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividends, or allotment of any
rights, or for the purpose of any other action. If no record date is fixed, the
record date for shareholders entitled to notice of meeting shall be at the close
of business on the day preceding the day or which notice is given, or, if no
notice is given, the day on which the meeting is held, or if notice is waived,
at the close of business on the day before the day on which the meeting is held.
(b) The Board of Directors may fix a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted for
shareholders entitled to receive payment of any dividend or other distribution
or allotment of any rights of shareholders entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action.
(c) A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
Board of Directors fixes a new record date for the adjourned meeting.
Section 5 - Fractions of Shares/Scrip: (Section 78.205)
The Board of Directors may authorize the issuance of certificates or payment of
money for fractions of a share, either represented by a certificate or
uncertificated, which shall entitle the holder to exercise voting rights,
receive dividends and participate in any assets of the Corporation in the event
of liquidation, in proportion to the fractional holdings; or it may authorize
NV Bylaws-9
<PAGE>
E-13
--------------------------------------------------------------------------------
the payment in case of the fair value of fractions of a share as of the time
when those entitled to receive such fractions are determined; or it may
authorize the issuance, subject to such conditions as may be permitted by law,
of scrip in registered or bearer form over the manual or facsimile signature of
an officer or agent of the Corporation or its agent for that purpose,
exchangeable as therein provided for full shares, but such scrip shall not
entitle the holder to any rights of shareholder, except as therein provided. The
scrip may contain any provisions or conditions that the Corporation deems
advisable. If a scrip ceases to be exchangeable for full share certificates, the
shares that would otherwise have been issuable as provided on the scrip are
deemed to be treasury shares unless the scrip contains other provisions for
their disposition.
ARTICLE VI - DIVIDENDS (Section 78.215 & 78.288)
(a) Dividends may be declared and paid out of any funds available therefor, as
often, in such amounts, and at such time or times as the Board of Directors may
determine and shares may be issued pro rata and without consideration to the
Corporation's shareholders or to the shareholders of one or more classes or
series.
(b) Shares of one class or series may not be issued as a share dividend to
shareholders of another class or series unless:
(i) so authorized by the Articles of Incorporation;
(ii) a majority of the shareholders of the class or series to be issued approve
the issue; or
(iii) there are no outstanding shares of the class or series of shares that are
authorized to be issued.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be subject to
change by the Board of Directors from time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL (Section 78.065)
The corporate seal, if any, shall be in such form as shall be prescribed and
altered, from time to time, by the Board of Directors. The use of a seal or
stamp by the Corporation on corporate documents is not necessary and the lack
thereof shall not in any way affect the legality of a corporate document.
ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders:
All Bylaws of the Corporation shall be subject to alteration or repeal, and new
Bylaws may be made, by a majority vote of the shareholders at the time entitled
to vote in the election of Directors even though these Bylaws may also be
altered, amended or repealed by the Board of Directors.
Section 2 - By Directors: (Section 78.120)
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, Bylaws of the Corporation.
NV Bylaws-10
<PAGE>
E-14
--------------------------------------------------------------------------------
ARTICLE X - WAIVER OF NOTICE: (Section 78.375)
Whenever any notice is required to be given by law, the Articles of
Incorporation or these Bylaws, a written waiver signed by the person or persons
entitled to such notice, whether before or after the meeting by any person,
shall constitute a waiver of notice of such meeting.
ARTICLE XI - INTERESTED DIRECTORS: (Section 78.140)
No contract or transaction shall be void or voidable if such contract or
transaction is between the corporation and one or most of its Directors or
Officers, or between the Corporation and any other corporation, partnership,
association, or other organization in which one or more of its Directors or
Officers, are directors or officers, or have a financial interest, when such
Director or Officer is present at or participates in the meeting of the Board,
or the committee of the shareholders which authorizes the contract or
transaction or his, her or their votes are counted for such purpose, if:
(a) the material facts as to his, her or their relationship or interest and as
to the contract or transaction are disclosed or are known to the Board of
Directors or the committee and are noted in the minutes of such meeting, and the
Board or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested Directors, even though the
disinterested Directors be less than a quorum; or
(b) the material facts as to his, her or their relationship or relationships or
interest or interests and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the shareholders;
or
(c) the contract or transaction is fair as to the Corporation as of the time it
is authorized, approved or ratified, by the Board of Directors, a committee of
the shareholders; or
(d) the fact of the common directorship, office or financial interest is not
disclosed or known to the Director or Officer at the time the transaction is
brought before the Board of Directors' of the Corporation for such action.
Such interested Directors may be counted when determining the presence of a
quorum at the Board of Directors' or committee meeting authorizing the contract
or transaction.
ARTICLE XII - ANNUAL LIST OF OFFICERS, DIRECTORS AND REGISTERED AGENT: (Section
78.150 & 78.165)
The Corporation shall, within sixty days after the filing of its Articles of
Incorporation with the Secretary of State, and annually thereafter on or before
the last day of the month in which the anniversary date of incorporation occurs
each year, file with the Secretary of State a list of its president, secretary
and treasurer and all of its Directors, along with the post office box or street
address, either residence or business, and a designation of its resident agent
in the state of Nevada. Such list shall be certified by an officer of the
Corporation.
NV Bylaws-11
<PAGE>
E-15
--------------------------------------------------------------------------------
INTELLECTUAL PROPERTY ASSIGNMENT
THIS ASSIGNMENT is made effective this 9th of February 1999, by Victoria and Guy
Brooks (a.k.a. Kick Start Publishing) ("Assignor") having offices at 5255 Gulf
Place West Vancouver, British Columbia, Canada and GreatestEscapes.com Inc.,
("Assignee") a Nevada corporation, having offices at #450-800 West Pender
Street, Vancouver, British Columbia Canada, V6C 2V6. The Assignor and Assignee
are collectively referred to herein as the "Parties".
WHEREAS, the Assignor is the owner of Greatest Escapes Travel Report and
Greatest Escapes Travel Webzine, and also if any trademark, travel names,
associated registrations, etc., specifically relating to Greatest Escapes Travel
Report and Greatest Escapes Travel Webzine.
Collectively referred to as "Property".
WHEREAS, the Assignee is interested in acquiring the Property including all
domestic and foreign rights, registrations, and applications, from the Assignor,
as part of the business to which the Property pertains, and the Assignor is
interested in transferring the Property to the Assignee.
NOW, THEREFORE, the Assignor, for the sum of one United States dollar and other
good and valuable consideration, the receipt, adequacy and sufficiency of which
is acknowledged by the Assignor:
1. Hereby sells, assigns, transfers and conveys to the Assignee, its successors
and assigns, the Assignor's entire right, title and interest in and to the
Property and its associated registrations and applications, both domestic and
foreign, together with the good will of the business associated with and
symbolized by the Property; which for greater clarity excludes copyrights
retained by authors of materials which have been used by the Assignor, Kick
Start Publishing, and
a) Will, upon written request of Assignee, its successors and assigns, execute
reasonable documents prepared at the expense of Assignee, its successors and
assigns, to perfect its title to any and all rights in the Property conveyed
hereunder; and
b) Will retain no rights in the Property or any use thereof; and
<PAGE>
E-16
--------------------------------------------------------------------------------
c) Acknowledges Assignee's rights in the Property and will make no attempt,
either directly or indirectly, to challenge those rights or undertake any act
inconsistent with Assignee's rights, including but not limited to, attempting to
register the Property or bringing any action or proceeding to contest the
validity of the Property in any country, territory or region; and
2. The Assignor represents that as of the effective date of this agreement the
Assignor knows of no other actual or potential claims or actions by a third
parties that would impair or have a tendency to impair the Property value of the
Property.
3. The Assignee agrees that it will not use the property in any way that would
damage the good name and reputation of Victoria Brooks, Guy Brooks or Kick Start
Publishing or the Assignor. In the event that Victoria Brooks, Guy Brooks, Kick
Start Publishing or the Assignor, notifies the Assignee that they, in their sole
discretion reasonably exercised feel that the property is being used in a way
that damages their good name and reputation, the Assignee shall immediately
desist from such use.
4. This Agreement shall be construed in accordance with the laws of British
Columbia and may not be amended in whole or in part save by the written
agreement of all the parties hereto:
IN WITNESS WHEREOF, Assignor has given legal effect to this Assignment by its
duly authorized representatives, dated February 9, 199.
Kick Start Publishing
Authorized Signatories
By: /s/ Victoria Brooks
------------------------------------------
Victoria Brooks (in her personal capacity)
By: /s/ Guy Brooks
------------------------------------------
Guy Brooks (in his personal capacity)
GreatestEscapes.com, Corp.
/s/ [ILLEGIBLE]
-----------------------------------------
Authorized Signatory
<PAGE>
E-17
--------------------------------------------------------------------------------
KathleneCarney+Associates
Public Relations 1926 Castle Drive Specializing in Petaluma, CA 94954 Media
Exposure 707-765-1234 Fax: 707-765-0186
May 16, 2000
Guy Brooks
Greatest Escapes Publishing
5255 Gulf Place
West Vancouver, B.C. Canada V7W 2V9
Dear Guy,
This letter is to confirm our agreement that you have retained Kathlene
Carney+Associates as a public relations firm to promote Literary Trips:
Following in the Footsteps of Fame (Greatest Escapes, Sept. 2000) for the period
of June 1-Sept. 30, 2000. This appointment becomes effective upon signing this
letter and receipt of first payment and may be canceled by either party upon
receipt of thirty days written notice.
PUBLICITY CAMPAIGN
June 2000
We will submit press materials and books to book review and travel editors at
print media with long leads including:
National and Regional Magazines
Travel (Travel & Leisure, Conde Nast Traveler, Sojourns, etc.) Book Trades and
Literary Review (Publishers Weekly, Kirkus Reviews, Library Journals, etc.)
History & Preservation (Preservation, Reminisce, etc.) Airline Inflights
(Hemispheres, etc.) General Interest and News (Newsweek, Time, Parade, etc.)
Men's, Women's and Seniors' Magazines (Men's Journal, Esquire, Harper's Bazaar,
Modern Maturity, etc.)
Regional (Magazines in each U.S. region featured in the book.)
Newspapers
Major papers with long leads (New York Times Book Review, Washington Post Book
Review, Los Angeles Times Book Review, etc.)
The client will provide a press release so we can hit the ground running and
Carney+Associates will develop additional press materials as necessary.
Carney+Associates will follow-up with key publications by telephone, fax, and
email to ascertain interest and discuss coverage.
1
<PAGE>
E-18
--------------------------------------------------------------------------------
July-September 2000
We will send press materials and books (where appropriate) to print and
electronic media with shorter leads including:
Newspapers: Book review and travel editors at major daily newspapers in the top
20 U.S. markets and Canada, including the markets where the "Literary Trips"
writers reside.
TV and Radio: Appropriate national, syndicated, and regional literary and travel
radio and TV shows. Including markets where the "Literary Trips" writers reside.
We will continue to follow-up with key media contacts by phone, fax, or email.
FEES:
Our fee for this campaign is $6000, plus expenses (telephone, postage &
shipping, copies, fax, etc.). The fee is due in four monthly installments of
$1500 each, beginning June 1, 2000 and continuing through September 1, 2000.
Invoices will be sent on the 15th of each month for the next fee installment and
accrued expenses.
In the event of delinquency, work will be suspended until receipt of payment,
and any delay caused by late payments is wholly the responsibility of the
client. A 1-1/2% monthly service charge will be applied to all delinquent
accounts.
As is traditional in public relations, the client agrees to indemnify and hold
harmless Kathlene Carney+Associates and any of our subcontractors against and
from all losses, claims, damages, expenses or liabilities which may incur based
on information, representations, reports or data you furnish us, to the extent
that such material is prepared, approved, used and/or distributed by us.
As is also standard in public relations, our services are limited to the
faithful representation of our clients and the conscientious effort toward
securing media interviews. Publicists can not guarantee any specific media
placements, nor can we be legally responsible for how anyone is represented or
portrayed in the media.
If this looks amenable to you, pleas sign below and fax a copy back to me. I
appreciate the opportunity to work with you to promote Literary Trips: Following
in the Footsteps of Fame and I look forward to a successful campaign!
Sincerely,
/s/ Kathlene Carney
--------------------------
Kathlene Carney
/s/ [ILLEGIBLE] May 19, 2000
-------------------------- ------------------------
Signature Date
<PAGE>
E-19
--------------------------------------------------------------------------------
DISTRIBUTION AGREEMENT
AGREEMENT, commencing on the 1st day of May, 2000, by and between WORDS
Distributing ("Distributor"), 7900 Edgewater Drive, Oakland California 94621, a
division of Book People Employees Association, a California corporation, and,
GreatestEscapes.com Publishing, ("Publisher"), 5255 Gulf Place, West Vancouver,
BC, Canada V7W 2V9 for sales and distribution of Publisher's books and related
materials by Distributor in the territories and under the terms and conditions
set forth below:
1. TERRITORY
1.1 EXCLUSIVE RIGHTS Publisher appoints Distributor to act as its exclusive
agent for sales of its books to the book trade, including but not limited to
general and specialty bookstores, book wholesalers (including library jobbers
and I.D. wholesalers), warehouse clubs, direct mail catalogs, book clubs,
department stores, college bookstores, public libraries and school libraries in
the United States of America.
1.2 NON-EXCLUSIVE RIGHTS Publisher shall appoint Distributor to act as its
non-exclusive agent for sales of its books to other types of outlets which
purchase books for resale or final consumption, including but not limited to
institutions and specialty retailers and wholesalers.
2. OWNERSHIP OF TITLES Publisher's inventory is on consignment to Distributor
and remains the property of the Publisher until books are invoiced by
Distributor. Inventory again becomes the property of Publisher when and if a
customer returns books to Distributor and Distributor issues credit against
Publisher's sales.
3. PERFORMANCE BY DISTRIBUTOR
3.1 TRADE NOTIFICATION Distributor will notify all appropriate trade accounts
that it has undertaken distribution of Publisher's books. It will also notify
such trade media as Publisher's Weekly, Bookselling This Week and other
appropriate media.
3.2 SALES REPRESENTATION
3.2.1 Distributor will maintain and manage a nationwide sales force, to be made
up of in-house and independent sales representatives, for the purpose of
soliciting orders from bookstores and other trade accounts, such representation
to include fair and reasonable presentation of Publisher's books at the national
chains and national and regional wholesalers.
3.2.2 Distributor will endeavor to maximize sales for Publisher's new and
backlist books through trade outlets, with consideration given to Publisher's
expectation for sales and consistent with Publisher's level of promotion
publicity and advertising for such books as well as with sound business
practices within the publishing industry.
3.2.3 Distributor will conduct sales conferences for trade representatives
before the commencement of each selling season. Publisher's new titles will be
presented at these conferences by Distributor.
3.2.4 Distributor will exhibit at its own expense at the annual BEA trade show
and selected national and regional trade and library conventions as determined
by Distributor, representing Distributor's complete line of publishers and
titles. For those publishers who wish to attend shows and represent their own
lines in Distributor's booth, Publisher will be charged a prorated fee based on
the space used. Space for publisher display may be limited. Publishers may also
<PAGE>
E-20
--------------------------------------------------------------------------------
elect to display separately at any of these shows or conventions.
3.2.5 Distributor will provide its major trade accounts with sample copies of
Publisher's books (see Paragraph 4.9) and will keep them apprized of significant
review attention, promotion, publicity and advertising.
3.3 CUSTOMARY DISTRIBUTION SERVICES Distributor will perform the following
services which are customarily rendered by a book distributor, and bear the cost
of the necessary materials and staff: order taking and processing, invoicing,
shipping, receiving, customer service, and collection of accounts receivable.
3.4 SUPPLEMENTAL FEES AND CHARGES Publisher will be charged for supplemental
services at Distributor's standard rates for services provided to Publisher by
Distributor. These charges may be levied for: stock transfer, coop advertising,
title delay or cancellation, sales materials, inventory overstock, stickering,
re-jacketing, review copy mailing (see Exhibit A).
3.5 INVENTORY MAINTENANCE Warehousing: Distributor will warehouse quantities of
Publisher's stock sufficient to fill six months demand in a clean, dry, secure
facility.
3.6 CHARGE FOR EXCESS INVENTORY If after one year from publication date,
Distributor is holding an excess supply of any of Publisher's book, Distributor
may, on 30 days' notice, return to Publisher, at Publisher's expense, any or all
excess inventory. Excess is defined as inventory in excess of six month's
projected sales demand based on a book's net sales for the previous six months.
If Publisher requests and Distributor is able, Distributor will continue to
store Publisher's excess inventory at a rate of $0.02 per book per month. Fifty
(50) copies or carton amount near 50 will be warehoused free of charge for the
life of each title.
3.7 PHYSICAL INVENTORY COUNT Distributor will conduct a physical inventory of
Publisher's stock annually and will send a report detailing any discrepancies to
Publisher within thirty (30) working days of said inventory.
3.8 INSURANCE Distributor will insure Publisher's inventory on consignment at
Distributor's warehouse at Distributor's expense.
3.9 SALES AND MANAGEMENT REPORTS
3.9.1 Distributor will provide a monthly summary of the previous month's sales
and returns activity on a per-title basis, by units and by gross billings and
gross credits; a report of amount due to Publisher and a payment schedule for
same; an accounting of books received during the month; and accounting of books
removed from inventory (for sales and promotion, as hurt, for bulk shipment, and
as Publisher withdrawals).
3.9.2 Distributor will provide a monthly summary of the previous month's sales
by territory and account type (independent retail, national chain, wholesale,
etc.) on a per-title basis, by units and gross billings and gross credits.
3.9.3 Distributor will provide a monthly summary of the previous month's
backorders for Publisher's not-yet-published and out-of-stock titles.
3.9.4 Distributor will provide monthly summary of "hurts", books damaged through
handling.
<PAGE>
E-21
--------------------------------------------------------------------------------
3.10 ADVERTISING AND PROMOTION SERVICES BILLABLE TO PUBLISHER
3.10.1 Twice a year, Distributor will prepare and print a complete catalog of
all titles sold by Distributor, for which Publisher will be charged back a
pro-rata share of the costs less 25% which will be underwritten by Distributor.
Catalog will be mailed to trade accounts and supplied to sales reps in the
field.
3.10.2 Distributor and Publisher may mutually agree to place advertising in
Publishers Weekly or other trade vehicles, in which case Publisher will be
charged back a pro-rata share of the costs less 25%, which will be underwritten
by Distributor.
3.10.3 All production costs, and all publicity, promotion and advertising costs
that have not been assigned to Distributor by this Agreement, are the sole
responsibility of Publisher.
4. PERFORMANCE BY PUBLISHER. Publisher agrees to:
4.1 Supply Distributor with proper ISBN numbers, copyright information,
specifications and prices sufficiently far in advance for Distributor to prepare
order forms and other sales materials required by Distributor and its sales
force. Publisher will also supply Distributor with a "tip sheet" containing
pertinent information about new titles and their authors, as well as jackets,
covers, advance reading copies and other materials as may be required to
facilitate sales efforts.
4.2 Promptly notify Distributor in writing of any changes in title, author,
price, publication date or other relevant information.
4.3 Supply R.R. Bowker with appropriate Advance Book Information for Books in
Print, and notify Bowker of any changes in relevant information.
4.4 Provide editorial information and cover graphics for the purpose of
cataloging in accordance with Distributor's schedule (see Exhibit B).
4.5 Inform Distributor of production schedules for new titles and reprints, and
promptly notify Distributor if changes occur in these schedules.
4.6 Provide Distributor not less than sixty (60) days written notice before
orders for any new titles are to be solicited.
4.7 Include the following notice in Publisher's catalogs: Distributed to the
Trade by (Distributor name, address, phone and fax numbers)
4.8 List Distributor in any trade ads.
4.9 Provide up to fifty (50) sample copies of each book for Distributor's sales
purposes, and as needed and mutually agreed upon, review copies for Booksellers.
4.10 Pay the costs of listing its titles on microfiche and in catalogs at
Ingram, Baker & Taylor and other accounts which assess such fees, which costs
are deducted from payments due Distributor. Distributor will provide a statement
of these costs with Publisher's monthly report.
4.11 Promptly notify Distributor when Publisher intends to cease printing any
title, or has made any sales of edition, format or ownership rights of its books
in the United States or Canada.
4.12 MANUFACTURE AND DELIVERY Publisher agrees to perform the following:
4.12.1 Supply Distributor such quantities of books as may be required to fill
Booksellers' purchase orders.
4.12.2 Pay all transportation costs to supply Distributor.
4.12.3 Ship according to Distributor's shipping requirements (see Exhibit C).
4.12.4 Bear risk of loss of books until their delivery to and acceptance by
Distributor at Distributor's facility.
4.12.5 Furnish all new titles and reprints with retail prices, ISBN's and bar
codes. Distributor reserves the right to require such changes as may be
<PAGE>
E-22
--------------------------------------------------------------------------------
necessary to effectively sell and distribute Publisher's books in the future.
Publisher agrees to compensate Distributor for any charges that may be incurred
should these requirements not be met.
4.13 TRANSFER OF ORDERS Publisher will promptly forward all orders it receives
from the book trade to Distributor for processing, and endeavor to inform its
customers that its books may be ordered from Distributor or its sales
representatives.
5. TERMS AND CONDITIONS OF SALES TO DISTRIBUTOR'S CUSTOMERS
5.1 Publisher agrees to allow Distributor to sell Publisher's books in
combination with books of other publishers represented by Distributor for
discounts under its current schedule (see Exhibit D), which are subject to
change from time to time.
5.2 Distributor will not sell Publisher's books at a discount greater than 55%
off retail without the express consent of Publisher.
5.3 Retail prices are at the sole discretion of the Publisher.
5.4 ORDER FULFILLMENT AND RETURNS PROCESSING
5.4.1 Publisher agrees to allow Distributor to ship its books in a manner it
deems appropriate for maximum efficiency of its fulfillment operation and in
order to minimize freight costs to its customers.
5.4.2 Publisher agrees to allow Distributor to use its own discretion in
accepting books returned for credit, and in determining which books returned to
Distributor are unacceptable for sale, or "hurt". Distributor will return hurt
books to Publisher at Publisher's expense unless instructed to destroy them.
5.4.3 Distributor will be entitled to retain an amount equal to 4% of
Publisher's monthly gross credits issued as a service charge for processing
returns of Publisher's books.
5.5 ASSIGNMENT OF ACCOUNTS RECEIVABLE Publisher conveys, transfers and assigns
to Distributor all of Publisher's right, title and interest to accounts
receivable for sales of Publisher's titles by Distributor to Distributor's
accounts.
5.6 SALE ON CONSIGNMENT Publisher agrees to allow Distributor to sell
Publisher's books on consignment, where the marketplace requires such terms.
Publisher's monthly reports will detail inventory transfers to consignment
accounts, and sales made by such accounts. Sales made by such account, minus
returns credited to their customers, will be paid according to terms outlined in
Section 8 of this Agreement.
5.7 EXTENSION OF CREDIT
5.7.1 Publisher acknowledges that the extension of credit to any customer is at
the sole discretion of Distributor, which assumes the risk and the
responsibility of collecting monies owed it.
<PAGE>
E-23
--------------------------------------------------------------------------------
5.7.2 Notwithstanding the foregoing, Publisher may at any time request
Distributor to grant credit to a customer to whom it would normally refuse to
grant credit, or to extend the amount of credit or length of time normally
extended under Distributor's terms of sale. Distributor may grant such requests,
but will under no obligation to pay Publisher for any sale to such customer
unless and until the amount due is actually paid to Distributor, and any
expenses incurred by Distributor in collecting the amount due is reimbursed to
it by Publisher. In the event the amount due is deemed bad debt, Distributor
will not be further obliged to Publisher for such sales; or if Distributor has
made payment for such sales, in full or in part, Publisher will be liable to
Distributor for the full amount previously paid, with payment to be deducted
from current payment due publisher.
6. LENGTH OF AGREEMENT
6.1 This agreement shall commence on the date of its execution and shall
continue in full force and effect for a period of twenty-four (24) months from
that date. Agreement shall automatically renew on its anniversary date for
twelve (12) month periods thereafter. Either party may terminate this Agreement
after the initial term or any succeeding term by giving the other party at least
six (6) months prior written notice.
6.2 Notwithstanding the foregoing, either party may terminate this agreement at
any time upon at least thirty (30) days written notice to the other party if
there has been a substantial failure on the part of either party to perform an
obligation agreed to herein and such failure is not rectified in a reasonable
amount of time.
7. COURSE OF TERMINATION OF AGREEMENT AND CONCLUSION OF SERVICES
7.1 Performance of duties. Upon notice of termination, Distributor shall
continue performing all distribution services required under this Agreement for
the period between notification and the actual Termination Date. Publisher shall
continue performing its obligation as stipulated in this Agreement for the
period between notification and the Termination Date.
7.2 Payment. Distributor will calculate an appropriate reserve against returns
based on gross sales and returns rate. Beginning with the month after notice of
termination, Distributor shall withhold from monies it would otherwise pay to
Publisher an amount no less than the calculated returns reserve plus any
outstanding fees and charges. Distributor will issue a final accounting and will
make its final payment for net sales minus fees and charges no later than one
year from Termination Date.
7.3 Return of inventory. Within forty-five (45) days after the Termination Date,
Distributor shall return all copies of Publisher's books in Distributor's
warehouse to a location specified by Publisher, the cost of which return shall
be borne by the party initiating the termination of this Agreement unless the
termination is for uncured breach, in which case the breaching party shall bear
the cost.
7.4 Acceptance of returns. Distributor agrees to accept returns of Publisher's
books for a period of six (6) months following the Termination Date. Publisher's
books received as returns after Termination Date will be returned at Publisher's
expense at intervals mutually agreed upon by Distributor and Publisher.
7.5 In the event of notice of termination, Publisher may contract with a new
distributor effective on the Termination Date, and such new distributor may
commence its activities on or after such a date, it being understood that in no
event will such distributorship titles distributed by Distributor until the day
following Termination Date.
7.6 Distributor agrees to forward all orders to Publisher for a period of six
months after the Termination Date. Such orders will be sent to Publisher on a
<PAGE>
E-24
--------------------------------------------------------------------------------
weekly basis and Publisher shall be charged at a rate of $5.00 per batch per
week.
7.7 If Bookpeople continues to carry Publisher's books on a nonexclusive
wholesale basis after the termination of this exclusive agreement, other
arrangements will be made to protect the interests and needs of both Distributor
and Publisher.
8. TERMS OF PAYMENT TO PUBLISHER
8.1 Distributor will pay Publisher seventy-five (75) percent of the net sale to
Distributor's accounts.
8.2 The amount due Publisher for any given month's sales will be paid on the
following schedule.
50% of total amount due 90 days after the end of the month 50% of total amount
due 120 days after the end of the month
8.3 Returns from Distributor's customers will be deducted from Publisher's sales
the same month the customer is credited.
8.4 Chargebacks. Distributor will provide a monthly statement of charges for
services performed under the terms of this agreement. Monies owed Distributor
for performing such services will be deducted from Publisher's current payment.
8.5 Reimbursement for a Negative Account Balance. With respect to any situation
where the Publisher's account balance is in deficit due to Bookseller's return
for which Distributor has previously remitted the Publisher's payment, Publisher
shall pay Distributor within sixty (60) days after the end of the month in which
Publisher's balance becomes negative, a sum equal to the deficit balance on
Publisher's account. Distributor also retains the right to offset for such
deficit.
8.6 MONIES HELD AGAINST RETURNS
8.6.1 Distributor will hold a reserve against future returns based on 25% of
Publisher's gross sales calculated on the sum of each month's sales during the
first year of this agreement, and on a 12 month rolling average thereafter.
Distributor reserves the right to adjust the amount held in reserve fund to a
reasonable percentage it deems prudent if returns are higher than the historic
norm.
8.6.2 Publisher agrees that Distributor may establish a higher reserve
percentage for any title deemed "high risk" by Distributor, provided that
Publisher is so notified in writing.
9. SHRINKAGE. Distributor will be liable for inventory shrinkage over 2% per
title of the total number of copies of each title warehoused during the year by
Distributor. Shrinkage is defined as inventory that cannot be accounted for, and
does not include books damaged in the normal course of handling or shipping, or
destroyed or damaged in the case of fire, flooding or theft from Distributor's
premises. Distributor's liability for shrinkage in excess of 2% will be the
number of copies in excess of 2% times the lesser of the publisher's unit cost
or 20% of the retail price. Shrinkage will be reported thirty (30) days after
the physical inventory. Any shrinkage payment due will be made thirty (30) days
after the report is issued.
<PAGE>
E-25
--------------------------------------------------------------------------------
10. REMAINDERING
10.1 Publisher may at any time remainder all of or part of its inventory of
books, provided it has given Distributor not less than thirty (30) days' notice.
Publisher will be responsible for all costs incurred in making the sale,
including the cost of processing and shipping.
10.2 Publisher agrees to allow Distributor to continue to accept returns of
books sold at full price prior to remaindering.
11. CHARGE FOR DELAY OR CANCELLATION OF NEW BOOKS To defray the costs incurred
by Distributor in re-selling or canceling orders for books intentionally or
otherwise delayed more than six months past the announced publication date, as
published in Publisher's seasonal catalogs, or in the event the title is
canceled entirely, Publisher agrees to pay a penalty of $250 per title so
delayed or canceled.
12. INSPECTION Distributor will permit Publisher to inspect Publisher's books in
inventory at any time during normal business hours given ten (10) working days
notice.
13. NOTICES Any written notices required or permitted under this Agreement shall
be deemed to be delivered when personally delivered, or when deposited by mail,
postage prepaid, addressed to the other party at its address set forth on page 1
of this Agreement, except that any notice required under Section 6 shall be
delivered by certified mail, return receipt requested. Either party may change
its address by notice delivered in accordance with this paragraph.
14. WARRANTIES AND INDEMNIFICATION Publisher warrants that it has the power to
enter into this agreement and to grant to Distributor the rights granted herein;
and that the books and/or any advertising, promotion, or publicity issued in
connection therewith do not in the whole or in part infringe any copyright or
violate any right of privacy or other personal or property right, or contain
obscene, libelous, or other matter contrary to law. Publisher will defend,
indemnify and hold Distributor harmless from any loss, expense (including
attorney's fees), or damages occasioned by any claim, demand, motion or suit
arising out of any breach of the foregoing warranties.
15. WAIVER A waiver by either party of any of the terms and conditions of this
agreement in any instance will not be deemed or construed to be a waiver of such
terms or conditions for the future.
16. SEVERABILITY If any term, provision, covenant or condition of the Agreement
is held invalid or unenforceable for any reason, the remainder of the provisions
of this Agreement shall continue in full force and effect as if this Agreement
had been executed with the invalid portion eliminated.
17. MODIFICATION AND/OR ASSIGNMENTS This agreement may not be modified unless in
writing and signed by both parties. Either party may assign this agreement, with
written notice of such assignment made to the other party, detailing the name,
address and principals of the assignee, notice to be provided no less than 10
days in advance of any such assignment. This Agreement shall inure for the
benefit of, and shall be binding upon, the successors and assigns of each of the
parties.
<PAGE>
E-26
--------------------------------------------------------------------------------
18. FORCE MAJEURE Notwithstanding anything to the contrary in this Agreement,
the parties hereto shall each be excused from performance of their respective
duties and obligations hereunder while and to the extent that performance is
prevented by an act of God, strike or labor dispute, war or war condition, not,
civil disorder, government regulations, embargo, fire, flood, accident,
earthquake or any cause beyond the reasonable control of such party.
19. PRELIMINARY DISPUTE RESOLUTION: Both parties agree to exercise good faith
efforts in dispute resolution. Such good faith efforts will encompass, but are
not limited to the following: (1) Immediate communication with the other party
of perceived problems with any aspect of the business relationship; (2) Mutual
respect for each party's business and staff; and (3) Informal resolution of
disputes if possible.
19.1 ARBITRATION OF DISPUTES If a dispute is not informally resolvable, the
parties agree to and shall arbitrate the dispute in the State of California. The
arbitration process shall be through selection of a neutral, third party
arbitrator under the rules, regulations, and procedures of the American
Arbitration Association. The parties agree that the arbitrator's written
decision shall be final and binding upon the parties in conformity with the
purpose of this section. The arbitrator's decision may be enforced in a court of
appropriate jurisdiction. All fees and expenses relating to the arbitration
and/or litigation (including attorneys fees and legal costs) incurred by the
prevailing party shall be paid to the prevailing party by the non-prevailing
party.
20. GOVERNING LAW The validity, interpretation and performance of this Agreement
shall be governed by and construed under the laws of the State of California
without giving effect to principles of conflict of law.
21. ENTIRE AGREEMENT This agreement contains all of the agreements between the
parties with respect to the subject matter hereof, and no other agreement,
understanding or representation, whether written or oral, shall supersede,
modify, amend or otherwise alter the date hereof.
IN WITNESS WHEREOF, each of the parties have authorized their representative to
execute this agreement.
/s/ [ILLEGIBLE] 03/06/00
---------------------------- ------------
Publisher
/s/ [ILLEGIBLE] 02/28/00
---------------------------- ------------
Distributor
<PAGE>
E-27
--------------------------------------------------------------------------------
EXHIBIT A
SUPPLEMENTAL FEES AND SERVICES
STICKERING $.10 per book, labels provided by publisher
RE-JACKETING $.25 per book, jackets provided by publisher
PUBLISHER WITHDRAWALS AND BULK TRANSFERS
All freight costs will be charged to Publisher's account. Handling fees:
Minimum charge: $5.00
2-9 full cases $2.50 per case
10 or more full cases $1.00 per case
1 full original pallet $10.00
Process review copies with labels provided, $1.00 each
Other special warehouse services, such as: special packing for display dumps,
prepacks, assortments; special inspection of shipments from printers/binders,
etc. $20.00 per hour
Note: Fees are subject to change
<PAGE>
E-28
--------------------------------------------------------------------------------
WORDS CALENDAR
EXHIBIT B
For publisher reference, July 30 1997 revision. Your deadlines in bold.
-----------------------------------------------------------------------
JANUARY FEBRUARY MARCH
Early Early Early
Sales & Mktg review 2/1 Fall title Operations review
information and cover
graphics due
1-1, Sign new publishers Title forms Middle
for Fall catalog B&W graphics Marketing meetings
Line art for full page begin
Solicit Fall title catalog spreads
information Hot Words meeting
Middle BEA promotion and Budgeting
Operations review attendance plans
Late Solicit Sales
Sales survey back Conference Materials
Travel arrangements for
Sales Conference
--------------------------------------------------------------------------------
APRIL MAY JUNE
Early Early Early
4/1 Sales Conference Sales Conference BEA
Materials due. Color Color repros of covers
graphics for slides for sales kits (color Middle
xeroxes) Sales & Mktg review
Middle
Solicit BEA materials New publishers backlist Late
in the building Advertising meeting
Prep for Sales Conference
BEA materials due Sales survey back
Marketing meetings end Color cover posters
Catalogs and promo
Advertising meeting materials
Stocking orders, new pubs Middle
Mail sales kits surveys
Data entry for sales kits
done Late
BEA
Late
Printed catalogs
<PAGE>
E-29
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
JULY AUGUST SEPTEMBER
Early Early Early
Operations review 8-1 Sign new publishers for 9-1 Spring title
Spring information due
BEA Booth space decision Title forms
Solicit Spring title B&W graphics
catalog information Line art for full
page spreads
Solicit regional materials
Middle
Fall regionals start
Late Revisit budget
Regional materials due
--------------------------------------------------------------------------------
OCTOBER NOVEMBER DECEMBER
Early Early Early
Solicit Sales Conf Material 11/1 Sales Conference Sales conference
materials due
Middle Color graphics for slides Color repros of
Marketing meetings begin covers for sales
Stocking order and case kits (color xerox)
Hot Words meeting quantity info for new pubs
New publisher
Late Prep for sales conference backlist in the
Advertising meeting building
Middle
Data entry for sales kits Middle
done Mail sales kits and
surveys
Marketing meetings end
Advertising meeting
Late
Printed catalogs
--------------------------------------------------------------------------------
<PAGE>
E-30
--------------------------------------------------------------------------------
Exhibit C
Words
---------------------------------------------------------------------
Distributing Company
ORDER FULFILLMENT GUIDELINES
DOCUMENTATION
Always include one packing slip for the entire shipment. The packing slip should
include:
1. Our purchase order number(s) for all the titles in the shipment. A Xerox of
our purchase order is acceptable.
2. The full title of each book in the shipment.
3. The quantity you are shipping of each book.
4. The list, or retail price of each title.
5. If you are shipping less books than the number we've requested on our
purchase order, please indicate whether the remainder have been backordered or
have been cancelled.
PACKING AND SHIPPING INFORMATION
1. All books are to be packed in cartons. Use a minimum 275 lb. test box (test
strength appears on the bottom in a small circle). Use a double or triple wall
carton if possible.
2. Avoid packing or wrapping the books in newspaper -- the ink rubs off very
easily.
3. Make sure boxes are tightly packed -- if the books can slide at all the
corners will be damaged and the covers scuffed.
4. If you are shipping by bookpost (please don't), take extra care in packing
and taping (tape edges, corners, and any stress or weak places; use tape
reinforced with fibers). We believe the post office employs a team of trained
elephants who step on, crunch, and toss all the "special" fourth class
shipments.
5. Where possible, avoid slipping books into boxes spine up -- or tell your
printer. Many books are damaged this way.
MARKING BOXES IN THE SHIPMENT
1. All boxes should have an indication on them as to the total number of cartons
in the shipment, eg, the first box should say "1 of 20", the second should say
"2 of 20", etc., for a 20 carton shipment. You may express this as 1/20, 2/20,
etc.
2. The box containing the packing slip should be clearly marked, and the packing
slip should be inside the top of the box, or in a well secured "packing slip
enclosed" envelope on the outside of the box.
3. Our purchase order number(s) for the shipment should be written on the boxes
-- including the numbers on the shipping label is common practice.
4. Not covering up the printers labels indicating the title and quantity is
helpful, and adjusting these labels to indicate changes you have made is also
appreciated. Our receivers do double check all cases that have been re-taped
since they left the printers.
SHIPPING INFORMATION
For small shipments (10 cartons or less) we recommend you use United Parcel
Service (UPS). UPS rates will often be justified by a decrease in damaged
returns.
When sending larger shipments (usually over 10 cartons or 200 lbs) we recommend
you use a freight carrier. Stack the boxes neatly on a pallet, and wrap it well.
Put a note on the pallet saying "Do Not Break Shrink Wrap" and ship it as one
item (ie., "1 pallet of 26 cartons" not "26 cartons"). This keeps your order
from being broken up by the freight company, and also means that we can quickly
sign for it and start the receiving procedure, rather than having to count all
the boxes while the trucker waits.
--------------------------------------------------------------------
If you have any particular shipping or packing problems or questions you can
call our Receiving Dept. For Order Fulfillment problems call your Publisher
Liaison.
--------------------------------------------------------------------
<PAGE>
E-31
--------------------------------------------------------------------------------
EXHIBIT D
WORDS DISTRIBUTING DISCOUNT
SCHEDULE:
quantity ordered disc.
1-4 20%
5-9 40%
10-24 42%
25-49 43%
50-99 44%
100-149 45%
150-299 46%
300+ 47%
wholesale case quantities only 52%
college text 20%
special discounts:
new account order of 25+ 45%
when placed with a sales
representative
<PAGE>
E-32
--------------------------------------------------------------------------------
THIS SUPPLIER AGREEMENT is made the 15 day of Sept, 99.
BETWEEN: GREATESTESCAPES.COM INC., a corporation registered in the State of
Nevada, having an office at #450, 800 West Pender Street, Vancouver, British
Columbia, V6C 2V6
("GreatestEscapes") OF THE FIRST PART
AND: Organic Buckwheat Pillow Products of Canada & USA, a
corporation registered in the Province/State of B.C.,
having an office at Ste 1104 548 Dallas Rd Victoria
B.C. V8V 1B3
(the "Supplier") OF THE SECOND PART
WHEREAS:
A. GreatestEscapes operates and owns an electronic commerce department store on
the Internet website address www.GreatestEscapes.com store (the "Internet
Store").
B. The Supplier manufactures and/or distributes products which GreatestEscapes
would like to offer for sale through the Internet Store (the "Products"), and
the Supplier would like to provide the Products to GreatestEscapes' customers
(the "Customer" or "Customers").
C. GreatestEscapes desires to appoint the Supplier to supply the Products to the
Customers of the Internet Store upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the respective warranties, representations, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) "Agreement" means this Agreement and all Schedules attached hereto;
(b) any reference in this Agreement to a designated "Paragraph", "Section",
"Schedule" or other subdivision refers to the designated Paragraph, Section,
Schedule or other subdivisions of this Agreement;
(c) the words "herein" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Paragraph, Section or
other subdivision of this Agreement;
(d) the word "including", when following any general statement term or matter,
is not to be construed to limit such general statement, term or matter to the
specific items or matters set forth immediately following such work or to
similar items or matters, whether or not non-limited language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto
<PAGE>
E-33
--------------------------------------------------------------------------------
2
but rather refers to all other items or matters that could reasonably fall
within the broadest possible scope of such general statement, term or matter;
and
(e) words importing the masculine gender include the feminine or neuter gender
and words in singular include the plural, and vice versa.
2. TERM OF AGREEMENT
2.1 Subject to subparagraph 2.2, this Agreement shall be effective for a twelve
(12) month term commencing on Oct 1st, 1999 and ending on Oct 1st, 2000 (the
"Initial Term").
2.2 Unless cancelled by written notice given by one party to the other on or
before the last day of the month prior to the date on which the Initial Term is
to end as set out in subparagraph 2.1, this Agreement will automatically renew
for one additional term of twelve (12) months (the "Subsequent Term").
2.3 At any time before the last day of the month prior to the date on which the
Initial Term or the Subsequent Term is to end, whichever term is in effect,
GreatestEscapes and the Supplier may review this Agreement and determine whether
to extend this Agreement for an additional term.
3. APPOINTMENT
3.1 Subject to the terms stated herein, GreatestEscapes hereby appoints the
Supplier, and the Supplier accepts such appointment, as a supplier of the
Products to the Customers of the Internet Store.
3.2 All of the Products provided by the Supplier to the Customers during the
term of this Agreement shall be purchased under and subject to the terms of this
Agreement.
3.3 The relationship of GreatestEscapes and the Supplier is that of independent
contractors and nothing contained in this Agreement shall be construed to give
either party the power to direct and control the day-to-day operations of the
other, or constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.
3.4 GreatestEscapes shall not be required to pay any commission or consideration
to the Supplier for any sales made on the Products at the Internet Store.
4. PRODUCTS AND PURCHASE PRICES
4.1 The Products to be provided by the Supplier shall be set out in a list which
includes detailed product descriptions, wholesale prices (the "Purchase Prices")
and suggested retail prices (the "Product List"). The Product List shall be
provided to GreatestEscapes prior to featuring the Products in the Internet
Store.
4.2 GreatestEscapes shall have sole discretion in determining the Products from
the Product List to be featured in the Internet Store.
4.3 The Purchase Prices shall be listed in the Internet Store in CON & USA
currency. The currency exchange rate used shall be that currently in effect at
the time of featuring the Product in the Internet Store, and quoted by a
Canadian chartered bank.
<PAGE>
E-34
--------------------------------------------------------------------------------
3
4.4 If the Supplier increases the Purchase Price of any Product, it shall
firstly give GreatestEscapes a minimum of 30 days advance written notice
specifying the increased purchase price(s) and the date upon which that price
increase shall take effect (the "Effective Date"). Upon the Effective Date, the
Purchase Price(s) set out in paragraph 4.1 hereof shall be deemed to be the
purchase price(s) specified in said notice.
5. PRODUCT ORDERS AND DELIVERY
5.1 GreatestEscapes shall receive electronically-communicated orders for the
Products from Customers through the Internet Store (the "Orders").
5.2 The Orders shall be communicated to the Supplier by electronic mail within
four (4) business days of receipt by GreatestEscapes, or sooner. The information
to be provided to the Supplier shall be the name of the Customer, address,
telephone number, electronic mail address if applicable, a list of the Products
ordered with detailed specifications, and the Customer's preferred method of
delivery (the "Customer Data").
5.3 The Supplier shall package and deliver the Products according to the
Customer Data no later than four (4) business days following the Supplier's
receipt of the Order (the "Delivery Date").
5.4 Confirmation of the Delivery Date shall be sent by electronic mail to
GreatestEscapes and to the Customer, if applicable.
5.5 The Supplier may use couriers and mail delivery services of its own choice,
provided that those services provide fast and effective delivery, or the
Supplier may use the courier and mail delivery services specified by
GreatestEscapes.
6. PAYMENT
6.1 The Supplier shall invoice GreatestEscapes for the Products purchased by the
Customers on a monthly basis (the "Monthly Invoice").
6.2 The Supplier's Monthly invoice shall include:
(a) the Purchase Price;
(b) applicable taxes, including GST, and provincial or state taxes; and
(c) shipping costs, which shall include the cost of delivering the Product from
the warehouse or place of the manufacture of the Supplier's Products to the
address specified in the Customer Data (the "Shipping Costs");
for each Product purchased by GreatestEscapes (the "Invoice Information"), and
shall specify whether the Monthly Invoice is in Canadian currency or another
currency.
6.3 Payment shall be made by GreatestEscapes to the Supplier by cheque, unless
another form of payment is reasonably requested by the Supplier, within 30 days
of receipt of the Monthly Invoice.
6.4 Payment shall be made by GreatestEscapes in the currency specified in the
Monthly Invoice, at the current exchange rate then in effect and quoted by a
Canadian chartered bank.
<PAGE>
E-35
--------------------------------------------------------------------------------
4
7. RETURNS AND CREDIT
7.1 The Supplier shall provide the Customer with information regarding its
policy on warranty, product approval and returns.
7.2 If the Customer is unsatisfied and returns a Product to the Supplier (the
"Return"), the Supplier shall:
(a) communicate by electronic mail the information regarding the Return to
GreatestEscapes within two (2) business days of receiving the Return;
(b) if the Product has not been invoiced by the Supplier or paid for by
GreatestEscapes, include the Invoice Information regarding the Product on the
Supplier's Monthly Invoice, mark the Product as a Return and invoice
GreatestEscapes for fifty (50%) percent of the Shipping Costs;
(c) if the Product has been invoiced by the Supplier, provide Greastestescapes
with a credit for the Purchase Price, applicable taxes and fifty (50%) percent
of the Shipping Costs on the Monthly Invoice following the Return.
8. PRODUCT PROMOTION
8.1 The Products shall be featured in the Internet Store according to the
specifications in the Product List.
8.2 The design and marketing of the Internet Store; however, GreatestEscapes
will use its best efforts to promote the solicitation of Orders for the
Products.
9. CONFIDENTIALITY
9.1 The Supplier acknowledges that all information provided to it regarding
Customers, Customer Data, promotional and marketing material provided by
GreatestEscapes, or corporate information relating to GreatestEscapes is
strictly confidential (the "Confidential Information") and will not be used in
any manner that may be detrimental to GreatestEscapes; provided, however, that
the Confidential Information may be disclosed to the Supplier's directors,
officers, employees or agents (collectively, the "Representatives") who need to
know such information for the purpose of transacting an Order, or in business
evaluation relating exclusively to the Supplier. The Supplier agrees that, prior
to disclosure of any Confidential Information to the Representatives, it shall
inform each Representative of the confidential nature of such information and
require them to treat such information in the strictest of confidence. The
Supplier further agrees that it will be responsible for any breach of this
agreement by its Representatives.
<PAGE>
E-36
--------------------------------------------------------------------------------
5
9.2 If the Confidential Information or any part thereof is disclosed to anyone
by the Supplier contrary to the terms of this Agreement, the Supplier will, at
the direction of GreatestEscapes, take all steps necessary, including legal
action, to prohibit such party from using or dealing with that Confidential
Information, and further agrees that it will indemnify and hold harmless
GreatestEscapes if it becomes necessary for GreatestEscapes to take any steps,
including legal action, to prohibit such party from using or dealing with such
Confidential Information.
10. DUTIES OF GREATESTESCAPES
10.1 During the term of this Agreement, GreatestEscapes agrees:
(a) to furnish the Supplier with current promotional advertising and promotional
material, in electronic form, or source material necessary to produce the
information in printed form, relating to the Internet Store;
(b) to use its best efforts to introduce, promote the sale of, and solicit and
obtain Orders for the Products, and to devote as much time and attention as may
be necessary to properly conduct such activities and to take any and all steps
and do any and all things which may be helpful or advisable to that end and to
conduct such activities in accordance with the terms of this Agreement;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders from the Internet Store, to adequately assist Customers with the use and
operation of the Internet Store, and to perform such servicing and follow-up on
Orders as good salesmanship and customer service shall require and as the
Supplier shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) to provide as requested by the Supplier periodic reports relating to the
marketing and sales of the Products;
(f) whenever requested by the Supplier, to follow up all sales correspondence
between the Supplier and any Customer and to assist in the solution of
commercial or technical problems;
(g) to maintain a record of any Customer complaints and to forward information
relating to such complaints to the Supplier;
(h) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities sold; and
(i) to bear the entire cost and expense of conducting its activities hereunder.
11. DUTIES OF THE SUPPLIER
11.1 During the terms of this Agreement, the Supplier agrees:
(a) to furnish GreatestEscapes with current promotional advertising and
promotional material if at all possible in electronic form relating to the
Products;
<PAGE>
E-37
--------------------------------------------------------------------------------
6
(b) to provide GreatestEscapes with its warranty and product approval and return
policy, along with copies of any other communications regularly sent to
Customers;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders received from GreatestEscapes, to adequately assist Customers, and to
perform such servicing and follow-up on Orders as good salesmanship and customer
service shall require and as GreatestEscapes shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) whenever requested by GreatestEscapes, to follow up all sales correspondence
between GreatestEscapes and any Customer and to assist in the solution of
commercial or technical problems;
(f) to maintain a record of any Customer complaints and to forward information
relating to such complaints to GreatestEscapes;
(g) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities of Products sold; and
(h) to bear the entire cost and expense of conducting its activities hereunder.
12. PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
12.1 This Agreement shall not be assigned by the Supplier without the prior
written consent of GreatestEscapes.
13. TERMINATION
13.1 This Agreement may be terminated at any time by either party by giving the
other at least sixty (60) days advance written notice to such effect.
13.2 Notwithstanding paragraph 13.1, if either party shall at any time commit
any breach of any covenant, warranty or agreement herein contained, then the
non-defaulting party may, at its option, in addition to any other remedies it
may have, terminate this Agreement by giving thirty (30) days notice in writing.
14. MISCELLANEOUS
14.1 All communications required or permitted by this Agreement to be given by
electronic mail by either party to the other shall be delivered electronically
to the following addresses:
(a) if to GreatestEscapes:
--------------------------------------------------------------------
(b) if to the Supplier:
[email protected]
<PAGE>
E-38
--------------------------------------------------------------------------------
7
Should there be a failure of electronic systems for more than eight (8) hours,
then communications under this clause may be delivered in accordance with clause
14.2.
14.2 All formal notices and other communications required or permitted by this
Agreement to be in writing given or made by either party to the other shall be
given or made in writing and be delivered by hand or double registered mail or
conveyed by telex or facsimile transmission to the parties at the following
addresses and numbers and to the attention of the following persons:
(a) if to GreatestEscapes:
#450, 800 West Pender Street
Vancouver, British Columbia, V6C 2V6 Telephone: (604) 683-1668
Facsimile: (604) 683-1055
Attention: Guy Brooks
(b) if to the Supplier:
Ste 1104 548 Dallas
Victoria BC V8V 1B3
Telephone: (250) 383-1960
Facsimile: (250) 383-1930
Attention: W. Vleck.
or to such other addresses, numbers, or persons as the parties may give each
other notice of from time to time. Proof of delivery or transmission in such
manner shall constitute proof of receipt.
14.3 Time shall be of the essence hereof.
14.4 This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior contracts, agreements and understandings between the
parties. There are no representations, warranties, collateral agreements or
conditions affecting this transaction other than as are expressed or referred to
herein in writing.
14.5 This Agreement shall be governed by and construed exclusively in accordance
with the laws of the Province of British Columbia and Canada.
<PAGE>
E-39
--------------------------------------------------------------------------------
8
14.6 This Agreement shall enure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
IN WITNESS WHEREOF the parties have hereunto affixed their hands and seals as of
the date referred to above.
The Common Seal of )
GREATESTESCAPES.COM CORP. )
was affixed in the presence of: )
)
/s/ [ILLEGIBLE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
The Common Seal of )
Organic Buckwheat Pillow Products of Canada.
)
------------------------------------
was affixed in the presence of: )
)
/s/ [ILLEGIBILE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
<PAGE>
E-40
--------------------------------------------------------------------------------
THIS SUPPLIER AGREEMENT is made the 30th day of Sept, 1999.
BETWEEN: GREATESTESCAPES.COM INC., a corporation registered in the State of
Nevada, having an office at #450, 800 West Pender Street, Vancouver, British
Columbia, V6C 2V6
("GreatestEscapes") OF THE FIRST PART
AND: Microsoie Inc., a corporation registered in the
Province/State of Quebec, having an office at
Montreal
(the "Supplier") OF THE SECOND PART
WHEREAS:
A. GreatestEscapes operates and owns an electronic commerce department store on
the Internet website address www.GreatestEscapes.com store (the "Internet
Store").
B. The Supplier manufactures and/or distributes products which GreatestEscapes
would like to offer for sale through the Internet Store (the "Products"), and
the Supplier would like to provide the Products to GreatestEscapes' customers
(the "Customer" or "Customers").
C. GreatestEscapes desires to appoint the Supplier to supply the Products to the
Customers of the Internet Store upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the respective warranties, representations, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) "Agreement" means this Agreement and all Schedules attached hereto;
(b) any reference in this Agreement to a designated "Paragraph", "Section",
"Schedule" or other subdivision refers to the designated Paragraph, Section,
Schedule or other subdivisions of this Agreement;
(c) the words "herein" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Paragraph, Section or
other subdivision of this Agreement;
(d) the word "including", when following any general statement term or matter,
is not to be construed to limit such general statement, term or matter to the
specific items or matters set forth immediately following such work or to
similar items or matters, whether or not non-limited language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto but rather refers to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter; and
<PAGE>
E-41
--------------------------------------------------------------------------------
2
(e) words importing the masculine gender include the feminine or neuter gender
and words in singular include the plural, and vice versa.
2. TERM OF AGREEMENT
<PAGE>
2.1 Subject to subparagraph 2.2, this Agreement shall be effective for a twelve
(12) month term commencing on Sept, 01 and ending August, 31 on (the "Initial
Term").
2.2 Unless cancelled by written notice given by one party to the other on or
before the last day of the month prior to the date on which the Initial Term is
to end as set out in subparagraph 2.1, this Agreement will automatically renew
for one additional term of twelve (12) months (the "Subsequent Term").
2.3 At any time before the last day of the month prior to the date on which the
Initial Term or the Subsequent Term is to end, whichever term is in effect,
GreatestEscapes and the Supplier may review this Agreement and determine whether
to extend this Agreement for an additional term.
3. APPOINTMENT
3.1 Subject to the terms stated herein, GreatestEscapes hereby appoints the
Supplier, and the Supplier accepts such appointment, as a supplier of the
Products to the Customers of the Internet Store.
3.2 All of the Products provided by the Supplier to the Customers during the
term of this Agreement shall be purchased under and subject to the terms of this
Agreement.
3.3 The relationship of GreatestEscapes and the Supplier is that of independent
contractors and nothing contained in this Agreement shall be construed to give
either party the power to direct and control the day-to-day operations of the
other, or constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.
3.4 GreatestEscapes shall not be required to pay any commission or consideration
to the Supplier for any sales made on the Products at the Internet Store.
4. PRODUCTS AND PURCHASE PRICES
4.1 The Products to be provided by the Supplier shall be set out in a list which
includes detailed product descriptions, wholesale prices (the "Purchase Prices")
and suggested retail prices (the "Product List"). The Product List shall be
provided to GreatestEscapes prior to featuring the Products in the Internet
Store.
4.2 GreatestEscapes shall have sole discretion in determining the Products from
the Product List to be featured in the Internet Store.
4.3 The Purchase Prices shall be listed in the Internet Store in U.S. or CPN
currency. The currency exchange rate used shall be that currently in effect at
the time of featuring the Product in the Internet Store, and quoted by a
Canadian chartered bank.
4.4 If the Supplier increases the Purchase Price of any Product, it shall
firstly give GreatestEscapes a minimum of 30 days advance written notice
specifying the increased purchase price(s) and the date upon which that price
<PAGE>
E-42
--------------------------------------------------------------------------------
3
increase shall take effect (the "Effective Date"). Upon the Effective Date, the
Purchase Price(s) set out in paragraph 4.1 hereof shall be deemed to be the
purchase price(s) specified in said notice.
5. PRODUCT ORDERS AND DELIVERY
5.1 GreatestEscapes shall receive electronically-communicated orders for the
Products from Customers through the Internet Store (the "Orders").
5.2 The Orders shall be communicated to the Supplier by electronic mail within
four (4) business days of receipt by GreatestEscapes, or sooner. The information
to be provided to the Supplier shall be the name of the Customer, address,
telephone number, electronic mail address if applicable, a list of the Products
ordered with detailed specifications, and the Customer's preferred method of
delivery (the "Customer Data").
5.3 The Supplier shall package and deliver the Products according to the
Customer Data no later than four (4) business days following the Supplier's
receipt of the Order (the "Delivery Date").
5.4 Confirmation of the Delivery Date shall be sent by electronic mail to
GreatestEscapes and to the Customer, if applicable.
5.5 The Supplier may use couriers and mail delivery services of its own choice,
provided that those services provide fast and effective delivery, or the
Supplier may use the courier and mail delivery services specified by
GreatestEscapes.
6. PAYMENT
6.1 The Supplier shall invoice GreatestEscapes for the Products purchased by the
Customers on a monthly basis (the "Monthly Invoice").
6.2 The Supplier's Monthly invoice shall include:
(a) the Purchase Price;
(b) applicable taxes, including GST, and provincial or state taxes; and
(c) shipping costs, which shall include the cost of delivering the Product from
the warehouse or place of the manufacture of the Supplier's Products to the
address specified in the Customer Data (the "Shipping Costs");
for each Product purchased by GreatestEscapes (the "Invoice Information"), and
shall specify whether the Monthly Invoice is in Canadian currency or another
currency.
6.3 Payment shall be made by GreatestEscapes to the Supplier by cheque, unless
another form of payment is reasonably requested by the Supplier, within 30 days
of receipt of the Monthly Invoice.
6.4 Payment shall be made by GreatestEscapes in the currency specified in the
Monthly Invoice, at the current exchange rate then in effect and quoted by a
Canadian chartered bank.
7. RETURNS AND CREDIT
7.1 The Supplier shall provide the Customer with information regarding its
policy on warranty, product approval and returns.
<PAGE>
E-43
--------------------------------------------------------------------------------
4
7.2 If the Customer is unsatisfied and returns a Product to the Supplier (the
"Return"), the Supplier shall:
(a) communicate by electronic mail the information regarding the Return to
GreatestEscapes within two (2) business days of receiving the Return;
(b) if the Product has not been invoiced by the Supplier or paid for by
GreatestEscapes, include the Invoice Information regarding the Product on the
Supplier's Monthly invoice, mark the Product as a Return and invoice
GreatestEscapes for fifty (50%) percent of the Shipping Costs;
(c) if the Product has been invoiced by the Supplier, provide Greastestescapes
with a credit for the Purchase Price, applicable taxes and fifty (50%) percent
of the Shipping Costs on the Monthly Invoice following the Return.
8. PRODUCT PROMOTION
8.1 The Products shall be featured in the Internet Store according to the
specifications in the Product List.
8.2 GreatestEscapes shall have sole discretion over the retail price list for
the Products, and the design and marketing of the Internet Store; however,
GreatestEscapes will use its best efforts to promote the solicitation of Orders
for the Products.
8.3 The Supplier may or may not include an Internet link from its website, if
applicable, to the Internet Store.
9. CONFIDENTIALITY
9.1 The Supplier acknowledges that all information provided to it regarding
Customers, Customer Data, promotional and marketing material provided by
GreatestEscapes, or corporate information relating to GreatestEscapes is
strictly confidential (the "Confidential Information") and will not be used in
any manner that may be detrimental to GreatestEscapes; provided, however, that
the Confidential Information may be disclosed to the Supplier's directors,
officers, employees or agents (collectively, the "Representatives") who need to
know such information for the purpose of transacting an Order, or in business
evaluation relating exclusively to the Supplier. The Supplier agrees that, prior
to disclosure of any Confidential Information to the Representatives, it shall
inform each Representative of the confidential nature of such information and
require them to treat such information in the strictest of confidence. The
Supplier further agrees that it will be responsible for any breach of this
agreement by its Representatives.
9.2 If the Confidential Information or any part thereof is disclosed to anyone
by the Supplier contrary to the terms of this Agreement, the Supplier will, at
the direction of GreatestEscapes, take all steps necessary, including legal
action, to prohibit such party from using or dealing with that Confidential
Information, and further agrees that it will indemnify and hold harmless
GreatestEscapes if it becomes necessary for GreatestEscapes to take any steps,
including legal action, to prohibit such party from using or dealing with such
Confidential Information.
<PAGE>
E-44
--------------------------------------------------------------------------------
5
10. DUTIES OF GREATESTESCAPES
10.1 During the term of this Agreement, GreatestEscapes agrees:
(a) to furnish the Supplier with current promotional advertising and promotional
material, in electronic form, or source material necessary to produce the
information in printed form, relating to the Internet Store;
(b) to use its best efforts to introduce, promote the sale of, and solicit and
obtain Orders for the Products, and to devote as much time and attention as may
be necessary to properly conduct such activities and to take any and all steps
and do any and all things which may be helpful or advisable to that end and to
conduct such activities in accordance with the terms of this Agreement;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders from the Internet Store, to adequately assist Customers with the use and
operation of the Internet Store, and to perform such servicing and follow-up on
Orders as good salesmanship and customer service shall require and as the
Supplier shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) to provide as requested by the Supplier periodic reports relating to the
marketing and sales of the Products;
(f) whenever requested by the Supplier, to follow up all sales correspondence
between the Supplier and any Customer and to assist in the solution of
commercial or technical problems;
(g) to maintain a record of any Customer complaints and to forward information
relating to such complaints to the Supplier;
(h) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities sold; and
(i) to bear the entire cost and expense of conducting its activities hereunder.
11. DUTIES OF THE SUPPLIER
11.1 During the terms of this Agreement, the Supplier agrees:
(a) to furnish GreatestEscapes with current promotional advertising and
promotional material if at all possible in electronic form relating to the
Products;
(b) to provide GreatestEscapes with its warranty and product approval and return
policy, along with copies of any other communications regularly sent to
Customers;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders received from GreatestEscapes, to adequately assist Customers, and to
perform such servicing and follow-up on Orders as good salesmanship and customer
service shall require and as GreatestEscapes shall reasonably request;
<PAGE>
E-45
--------------------------------------------------------------------------------
6
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) whenever requested by GreatestEscapes, to follow up all sales correspondence
between GreatestEscapes and any Customer and to assist in the solution of
commercial or technical problems;
(f) to maintain a record of any Customer complaints and to forward information
relating to such complaints to GreatestEscapes;
(g) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities of Products sold; and
(h) to bear the entire cost and expense of conducting its activities hereunder.
12. PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
12.1 This Agreement shall not be assigned by the Supplier without the prior
written consent of GreatestEscapes.
13. TERMINATION
13.1 This Agreement may be terminated at any time by either party by giving the
other at least sixty (60) days advance written notice to such effect.
13.2 Notwithstanding paragraph 13.1, if either party shall at any time commit
any breach of any covenant, warranty or agreement herein contained, then the
non-defaulting party may, at its option, in addition to any other remedies it
may have, terminate this Agreement by giving thirty (30) days notice in writing.
14. MISCELLANEOUS
14.1 All communications required or permitted by this Agreement to be given by
electronic mail by either party to the other shall be delivered electronically
to the following addresses:
(a) if to GreatestEscapes:
the [email protected]
(b) if to the Supplier:
[email protected]
Should there be a failure of electronic systems for more than eight (8) hours,
then communications under this clause may be delivered in accordance with clause
14.2.
14.2 All formal notices and other communications required or permitted by this
Agreement to be in writing given or made by either party to the other shall be
given or made in writing and be delivered by hand or double registered mail or
conveyed by telex or facsimile transmission to the parties at the following
addresses and numbers and to the attention of the following persons:
<PAGE>
E-46
--------------------------------------------------------------------------------
7
(a) if to GreatestEscapes:
#450, 800 West Pender Street
Vancouver, British Columbia, V6C 2V6 Telephone: (604) 683-1668
Facsimile: (604) 683-1055
Attention: Guy Brooks
(b) if to the Supplier:
224 Laurien o. Montreal, Quebec, H2T 2N8
Telephone: (514) 272-9516
Facsimile: (514) 272-7126
Attention: Pierre Lessard
or to such other addresses, numbers, or persons as the parties may give each
other notice of from time to time. Proof of delivery or transmission in such
manner shall constitute proof of receipt.
14.3 Time shall be of the essence hereof.
14.4 This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior contracts, agreements and understandings between the
parties. There are no representations, warranties, collateral agreements or
conditions affecting this transaction other than as are expressed or referred to
herein in writing.
14.5 This Agreement shall be governed by and construed exclusively in accordance
with the laws of the Province of British Columbia and Canada.
<PAGE>
E-47
--------------------------------------------------------------------------------
8
14.6 This Agreement shall enure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
IN WITNESS WHEREOF the parties have hereunto affixed their hands and seals as of
the date referred to above.
The Common Seal of )
GREATESTESCAPES.COM CORP. )
was affixed in the presence of: )
)
[ILLEGIBLE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
The Common Seal of )
Microsoie Inc.
)
------------------------------------
was affixed in the presence of: )
)
[ILLEGIBILE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
<PAGE>
E-48
--------------------------------------------------------------------------------
THIS SUPPLIER AGREEMENT is made the day of , .
--- ------------ ----
BETWEEN: GREATESTESCAPES.COM INC., a corporation registered in the State of
Nevada, having an office at #450, 800 West Pender Street, Vancouver, British
Columbia, V6C 2V6
("GreatestEscapes") OF THE FIRST PART
AND: Ulysses Press, a corporation registered in the
Province/State of California, having an office at
3286 Adeline Street, Berkeley, CA 94703
(the "Supplier") OF THE SECOND PART
WHEREAS:
A. GreatestEscapes operates and owns an electronic commerce department store on
the Internet website address www.GreatestEscapes.com store (the "Internet
Store").
B. The Supplier manufactures and/or distributes products which GreatestEscapes
would like to offer for sale through the Internet Store (the "Products"), and
the Supplier would like to provide the Products to GreatestEscapes' customers
(the "Customer" or "Customers").
C. GreatestEscapes desires to appoint the Supplier to supply the Products to the
Customers of the Internet Store upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the respective warranties, representations, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) "Agreement" means this Agreement and all Schedules attached hereto;
(b) any reference in this Agreement to a designated "Paragraph", "Section",
"Schedule" or other subdivision refers to the designated Paragraph, Section,
Schedule or other subdivisions of this Agreement;
(c) the words "herein" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Paragraph, Section or
other subdivision of this Agreement;
(d) the word "including", when following any general statement term or matter,
is not to be construed to limit such general statement, term or matter to the
specific items or matters set forth immediately following such work or to
similar items or matters, whether or not non-limited language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
<PAGE>
E-49
--------------------------------------------------------------------------------
2
reference thereto but rather refers to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter; and
(e) words importing the masculine gender include the feminine or neuter gender
and words in singular include the plural, and vice versa.
2. TERM OF AGREEMENT
2.1 Subject to subparagraph 2.2, this Agreement shall be effective for a twelve
(12) month term commencing on , and ending , on (the
-------- ---- -------- ----
"Initial Term").
2.2 Unless cancelled by written notice given by one party to the other on or
before the last day of the month prior to the date on which the Initial Term is
to end as set out in subparagraph 2.1, this Agreement will automatically renew
for one additional term of twelve (12) months (the "Subsequent Term").
2.3 At any time before the last day of the month prior to the date on which the
Initial Term or the Subsequent Term is to end, whichever term is in effect,
GreatestEscapes and the Supplier may review this Agreement and determine whether
to extend this Agreement for an additional term.
3. APPOINTMENT
3.1 Subject to the terms stated herein, GreatestEscapes hereby appoints the
Supplier, and the Supplier accepts such appointment, as a supplier of the
Products to the Customers of the Internet Store.
3.2 All of the Products provided by the Supplier to the Customers during the
term of this Agreement shall be purchased under and subject to the terms of this
Agreement.
3.3 The relationship of GreatestEscapes and the Supplier is that of independent
contractors and nothing contained in this Agreement shall be construed to give
either party the power to direct and control the day-to-day operations of the
other, or constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.
3.4 GreatestEscapes shall not be required to pay any commission or consideration
to the Supplier for any sales made on the Products at the Internet Store.
4. PRODUCTS AND PURCHASE PRICES
4.1 The Products to be provided by the Supplier shall be set out in a list which
includes detailed product descriptions, wholesale prices (the "Purchase Prices")
and suggested retail prices (the "Product List"). The Product List shall be
provided to GreatestEscapes prior to featuring the Products in the Internet
Store.
4.2 GreatestEscapes shall have sole discretion in determining the Products from
the Product List to be featured in the Internet Store.
<PAGE>
E-50
--------------------------------------------------------------------------------
3
4.3 The Purchase Prices shall be listed in the Internet Store in
------------
currency. The currency exchange rate used shall be that currently in effect at
the time of featuring the Product in the Internet Store, and quoted by a
Canadian chartered bank.
4.4 If the Supplier increases the Purchase Price of any Product, it shall
firstly give GreatestEscapes a minimum of 30 days advance written notice
specifying the increased purchase price(s) and the date upon which that price
increase shall take effect (the "Effective Date"). Upon the Effective Date, the
Purchase Price(s) set out in paragraph 4.1 hereof shall be deemed to be the
purchase price(s) specified in said notice.
5. PRODUCT ORDERS AND DELIVERY
5.1 GreatestEscapes shall receive electronically-communicated orders for the
Products from Customers through the Internet Store (the "Orders").
5.2 The Orders shall be communicated to the Supplier by electronic mail within
four (4) business days of receipt by GreatestEscapes, or sooner. The information
to be provided to the Supplier shall be the name of the Customer, address,
telephone number, electronic mail address if applicable, a list of the Products
ordered with detailed specifications, and the Customer's preferred method of
delivery (the "Customer Data").
5.3 The Supplier shall package and deliver the Products according to the
Customer Data no later than four (4) business days following the Supplier's
receipt of the Order (the "Delivery Date").
5.4 Confirmation of the Delivery Date shall be sent by electronic mail to
GreatestEscapes and to the Customer, if applicable.
5.5 The Supplier may use couriers and mail delivery services of its own choice,
provided that those services provide fast and effective delivery, or the
Supplier may use the courier and mail delivery services specified by
GreatestEscapes.
6. PAYMENT
6.1 The Supplier shall invoice GreatestEscapes for the Products purchased by the
Customers on a monthly basis (the "Monthly Invoice").
6.2 The Supplier's Monthly invoice shall include:
(a) the Purchase Price;
(b) applicable taxes, including GST, and provincial or state taxes; and
(c) shipping costs, which shall include the cost of delivering the Product from
the warehouse or place of the manufacture of the Supplier's Products to the
address specified in the Customer Data (the "Shipping Costs");
for each Product purchased by GreatestEscapes (the "Invoice Information"), and
shall specify whether the Monthly Invoice is in Canadian currency or another
currency.
<PAGE>
E-51
--------------------------------------------------------------------------------
4
6.3 Payment shall be made by GreatestEscapes to the Supplier by cheque, unless
another form of payment is reasonably requested by the Supplier, within 30 days
of receipt of the Monthly Invoice.
6.4 Payment shall be made by GreatestEscapes in the currency specified in the
Monthly Invoice, at the current exchange rate then in effect and quoted by a
Canadian chartered bank.
7. RETURNS AND CREDIT
7.1 The Supplier shall provide the Customer with information regarding its
policy on warranty, product approval and returns.
7.2 If the Customer is unsatisfied and returns a Product to the Supplier (the
"Return"), the Supplier shall:
(a) communicate by electronic mail the information regarding the Return to
GreatestEscapes within two (2) business days of receiving the Return;
(b) if the Product has not been invoiced by the Supplier or paid for by
GreatestEscapes, include the Invoice Information regarding the Product on the
Supplier's Monthly Invoice, mark the Product as a Return and invoice
GreatestEscapes for fifty (50%) percent of the Shipping Costs;
(c) if the Product has been invoiced by the Supplier, provide Greastestescapes
with a credit for the Purchase Price, applicable taxes and fifty (50%) percent
of the Shipping Costs on the Monthly Invoice following the Return.
8. PRODUCT PROMOTION
8.1 The Products shall be featured in the Internet Store according to the
specifications in the Product List.
8.2 GreatestEscapes shall have sole discretion over the retail price list for
the Products, and the design and marketing of the Internet Store; however,
GreatestEscapes will use its best efforts to promote the solicitation of Orders
for the Products.
8.3 The Supplier may or may not include an Internet link from its website, if
applicable, to the Internet Store.
9. CONFIDENTIALITY
9.1 The Supplier acknowledges that all information provided to it regarding
Customers, Customer Data, promotional and marketing material provided by
GreatestEscapes, or corporate information relating to GreatestEscapes is
strictly confidential (the "Confidential Information") and will not be used in
any manner that may be detrimental to GreatestEscapes; provided, however, that
the Confidential Information may be disclosed to the Supplier's directors,
officers, employees or agents (collectively, the "Representatives") who need to
know such information for the purpose of transacting an Order, or in business
<PAGE>
E-52
--------------------------------------------------------------------------------
5
evaluation relating exclusively to the Supplier. The Supplier agrees that, prior
to disclosure of any Confidential Information to the Representatives, it shall
inform each Representative of the confidential nature of such information and
require them to treat such information in the strictest of confidence. The
Supplier further agrees that it will be responsible for any breach of this
agreement by its Representatives.
9.2 If the Confidential Information or any part thereof is disclosed to anyone
by the Supplier contrary to the terms of this Agreement, the Supplier will, at
the direction of GreatestEscapes, take all steps necessary, including legal
action, to prohibit such party from using or dealing with that Confidential
Information, and further agrees that it will indemnify and hold harmless
GreatestEscapes if it becomes necessary for GreatestEscapes to take any steps,
including legal action, to prohibit such party from using or dealing with such
Confidential Information.
10. DUTIES OF GREATESTESCAPES
10.1 During the term of this Agreement, GreatestEscapes agrees:
(a) to furnish the Supplier with current promotional advertising and promotional
material, in electronic form, or source material necessary to produce the
information in printed form, relating to the Internet Store;
(b) to use its best efforts to introduce, promote the sale of, and solicit and
obtain Orders for the Products, and to devote as much time and attention as may
be necessary to properly conduct such activities and to take any and all steps
and do any and all things which may be helpful or advisable to that end and to
conduct such activities in accordance with the terms of this Agreement;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders from the Internet Store, to adequately assist Customers with the use and
operation of the Internet Store, and to perform such servicing and follow-up on
Orders as good salesmanship and customer service shall require and as the
Supplier shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) to provide as requested by the Supplier periodic reports relating to the
marketing and sales of the Products;
(f) whenever requested by the Supplier, to follow up all sales correspondence
between the Supplier and any Customer and to assist in the solution of
commercial or technical problems;
(g) to maintain a record of any Customer complaints and to forward information
relating to such complaints to the Supplier;
<PAGE>
E-53
--------------------------------------------------------------------------------
6
(h) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities sold; and
(i) to bear the entire cost and expense of conducting its activities hereunder.
11. DUTIES OF THE SUPPLIER
11.1 During the terms of this Agreement, the Supplier agrees:
(a) to furnish GreatestEscapes with current promotional advertising and
promotional material if at all possible in electronic form relating to the
Products;
(b) to provide GreatestEscapes with its warranty and product approval and return
policy, along with copies of any other communications regularly sent to
Customers;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders received from GreatestEscapes, to adequately assist Customers, and to
perform such servicing and follow-up on Orders as good salesmanship and customer
service shall require and as GreatestEscapes shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) whenever requested by GreatestEscapes, to follow up all sales correspondence
between GreatestEscapes and any Customer and to assist in the solution of
commercial or technical problems;
(f) to maintain a record of any Customer complaints and to forward information
relating to such complaints to GreatestEscapes;
(g) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities of Products sold; and
(h) to bear the entire cost and expense of conducting its activities hereunder.
12. PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
12.1 This Agreement shall not be assigned by the Supplier without the prior
written consent of GreatestEscapes.
13. TERMINATION
13.1 This Agreement may be terminated at any time by either party by giving the
other at least sixty (60) days advance written notice to such effect.
<PAGE>
E-54
--------------------------------------------------------------------------------
7
13.2 Notwithstanding paragraph 13.1, if either party shall at any time commit
any breach of any covenant, warranty or agreement herein contained, then the
non-defaulting party may, at its option, in addition to any other remedies it
may have, terminate this Agreement by giving thirty (30) days notice in writing.
14. MISCELLANEOUS
14.1 All communications required or permitted by this Agreement to be given by
electronic mail by either party to the other shall be delivered electronically
to the following addresses:
(a) if to GreatestEscapes:
------------------------------------------------------------------------
(b) if to the Supplier:
------------------------------------------------------------------------
Should there be a failure of electronic systems for more than eight (8) hours,
then communications under this clause may be delivered in accordance with clause
14.2.
14.2 All formal notices and other communications required or permitted by this
Agreement to be in writing given or made by either party to the other shall be
given or made in writing and be delivered by hand or double registered mail or
conveyed by telex or facsimile transmission to the parties at the following
addresses and numbers and to the attention of the following persons:
(a) if to GreatestEscapes:
#450, 800 West Pender Street
Vancouver, British Columbia, V6C 2V6 Telephone: (604) 683-1668
Facsimile: (604) 683-1055
Attention: Guy Brooks
(b) if to the Supplier:
--------------------------------------------------------------------------------
Telephone:
Facsimile:
------------------
Attention:
------------------
or to such other addresses, numbers, or persons as the parties may give each
other notice of from time to time. Proof of delivery or transmission in such
manner shall constitute proof of receipt.
14.3 Time shall be of the essence hereof.
<PAGE>
E-55
--------------------------------------------------------------------------------
8
14.4 This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior contracts, agreements and understandings between the
parties. There are no representations, warranties, collateral agreements or
conditions affecting this transaction other than as are expressed or referred to
herein in writing.
14.5 This Agreement shall be governed by and construed exclusively in accordance
with the laws of the Province of British Columbia and Canada.
<PAGE>
E-56
--------------------------------------------------------------------------------
9
14.6 This Agreement shall enure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
IN WITNESS WHEREOF the parties have hereunto affixed their hands and seals as of
the date referred to above.
The Common Seal of )
GREATESTESCAPES.COM CORP. )
was affixed in the presence of: )
)
[ILLEGIBLE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
The Common Seal of )
Ulysses Press (BookPack, Inc.)
)
------------------------------------
was affixed in the presence of: )
)
[ILLEGIBILE] 3 Dec. 99
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
<PAGE>
E-57
--------------------------------------------------------------------------------
THIS SUPPLIER AGREEMENT is made the 3 day of December, 1999.
BETWEEN: GREATESTESCAPES.COM INC., a corporation registered in the State of
Nevada, having an office at #450, 800 West Pender Street, Vancouver, British
Columbia, V6C 2V6
("GreatestEscapes") OF THE FIRST PART
AND: Sun Dreamer, a corporation registered in the
Province/State of California, having an office at
PMB 257, 1840 41st Ave #102, Capitola CA 95010
(the "Supplier") OF THE SECOND PART
WHEREAS:
A. GreatestEscapes operates and owns an electronic commerce department store on
the Internet website address www.GreatestEscapes.com store (the "Internet
Store").
B. The Supplier manufactures and/or distributes products which GreatestEscapes
would like to offer for sale through the Internet Store (the "Products"), and
the Supplier would like to provide the Products to GreatestEscapes' customers
(the "Customer" or "Customers").
C. GreatestEscapes desires to appoint the Supplier to supply the Products to the
Customers of the Internet Store upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the respective warranties, representations, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) "Agreement" means this Agreement and all Schedules attached hereto;
(b) any reference in this Agreement to a designated "Paragraph", "Section",
"Schedule" or other subdivision refers to the designated Paragraph, Section,
Schedule or other subdivisions of this Agreement;
(c) the words "herein" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Paragraph, Section or
other subdivision of this Agreement;
(d) the word "including", when following any general statement term or matter,
is not to be construed to limit such general statement, term or matter to the
specific items or matters set forth immediately following such work or to
similar items or matters, whether or not non-limited language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto but rather refers to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter; and
<PAGE>
E-58
--------------------------------------------------------------------------------
2
(e) words importing the masculine gender include the feminine or neuter gender
and words in singular include the plural, and vice versa.
2. TERM OF AGREEMENT
2.1 Subject to subparagraph 2.2, this Agreement shall be effective for a twelve
(12) month term commencing on December 6, 1999 and ending December 6, 2000 (the
"Initial Term").
2.2 Unless cancelled by written notice given by one party to the other on or
before the last day of the month prior to the date on which the Initial Term is
to end as set out in subparagraph 2.1, this Agreement will automatically renew
for one additional term of twelve (12) months (the "Subsequent Term").
2.3 At any time before the last day of the month prior to the date on which the
Initial Term or the Subsequent Term is to end, whichever term is in effect,
GreatestEscapes and the Supplier may review this Agreement and determine whether
to extend this Agreement for an additional term.
3. APPOINTMENT
3.1 Subject to the terms stated herein, GreatestEscapes hereby appoints the
Supplier, and the Supplier accepts such appointment, as a supplier of the
Products to the Customers of the Internet Store.
3.2 All of the Products provided by the Supplier to the Customers during the
term of this Agreement shall be purchased under and subject to the terms of this
Agreement.
3.3 The relationship of GreatestEscapes and the Supplier is that of independent
contractors and nothing contained in this Agreement shall be construed to give
either party the power to direct and control the day-to-day operations of the
other, or constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.
3.4 GreatestEscapes shall not be required to pay any commission or consideration
to the Supplier for any sales made on the Products at the Internet Store.
4. PRODUCTS AND PURCHASE PRICES
4.1 The Products to be provided by the Supplier shall be set out in a list which
includes detailed product descriptions, wholesale prices (the "Purchase Prices")
and suggested retail prices (the "Product List"). The Product List shall be
provided to GreatestEscapes prior to featuring the Products in the Internet
Store.
4.2 GreatestEscapes shall have sole discretion in determining the Products from
the Product List to be featured in the Internet Store.
4.3 The Purchase Prices shall be listed in the Internet Store in U.S. currency.
The currency exchange rate used shall be that currently in effect at the time of
featuring the Product in the Internet Store, and quoted by a Canadian chartered
bank.
4.4 If the Supplier increases the Purchase Price of any Product, it shall
firstly give GreatestEscapes a minimum of 30 days advance written notice
specifying the increased purchase price(s) and the date upon which
<PAGE>
E-59
--------------------------------------------------------------------------------
3
that price increase shall take effect (the "Effective Date"). Upon the Effective
Date, the Purchase Price(s) set out in paragraph 4.1 hereof shall be deemed to
be the purchase price(s) specified in said notice.
5. PRODUCT ORDERS AND DELIVERY
5.1 GreatestEscapes shall receive electronically-communicated orders for the
Products from Customers through the Internet Store (the "Orders").
5.2 The Orders shall be communicated to the Supplier by electronic mail within
four (4) business days of receipt by GreatestEscapes, or sooner. The information
to be provided to the Supplier shall be the name of the Customer, address,
telephone number, electronic mail address if applicable, a list of the Products
ordered with detailed specifications, and the Customer's preferred method of
delivery (the "Customer Data").
5.3 The Supplier shall package and deliver the Products according to the
Customer Data no later than four (4) business days following the Supplier's
receipt of the Order (the "Delivery Date").
5.4 Confirmation of the Delivery Date shall be sent by electronic mail to
GreatestEscapes and to the Customer, if applicable.
5.5 The Supplier may use couriers and mail delivery services of its own choice,
provided that those services provide fast and effective delivery, or the
Supplier may use the courier and mail delivery services specified by
GreatestEscapes.
6. PAYMENT
6.1 The Supplier shall invoice GreatestEscapes for the Products purchased by the
Customers on a monthly basis (the "Monthly Invoice").
6.2 The Supplier's Monthly invoice shall include:
(a) the Purchase Price;
(b) applicable taxes, including GST, and provincial or state taxes; and
(c) shipping costs, which shall include the cost of delivering the Product from
the warehouse or place of the manufacture of the Supplier's Products to the
address specified in the Customer Data (the "Shipping Costs");
for each Product purchased by GreatestEscapes (the "Invoice Information"), and
shall specify whether the Monthly Invoice is in Canadian currency or another
currency.
6.3 Payment shall be made by GreatestEscapes to the Supplier by cheque, unless
another form of payment is reasonably requested by the Supplier, within 30 days
of receipt of the Monthly Invoice.
6.4 Payment shall be made by GreatestEscapes in the currency specified in the
Monthly Invoice, at the current exchange rate then in effect and quoted by a
Canadian chartered bank.
7. RETURNS AND CREDIT
7.1 The Supplier shall provide the Customer with information regarding its
policy on warranty, product approval and returns.
<PAGE>
E-60
--------------------------------------------------------------------------------
4
7.2 If the Customer is unsatisfied and returns a Product to the Supplier (the
"Return"), the Supplier shall:
(a) communicate by electronic mail the information regarding the Return to
GreatestEscapes within two (2) business days of receiving the Return;
(b) if the Product has not been invoiced by the Supplier or paid for by
GreatestEscapes, include the Invoice Information regarding the Product on the
Supplier's Monthly Invoice, mark the Product as a Return and invoice
GreatestEscapes for fifty (50%) percent of the Shipping Costs;
(c) if the Product has been invoiced by the Supplier, provide Greastestescapes
with a credit for the Purchase Price, applicable taxes and fifty (50%) percent
of the Shipping Costs on the Monthly Invoice following the Return.
8. PRODUCT PROMOTION
8.1 The Products shall be featured in the Internet Store according to the
specifications in the Product List.
8.2 GreatestEscapes shall have sole discretion over the retail price list for
the Products, and the design and marketing of the Internet Store; however,
GreatestEscapes will use its best efforts to promote the solicitation of Orders
for the Products.
8.3 The Supplier may or may not include an Internet link from its website, if
applicable, to the Internet Store.
8.4 The Supplier shall include an Internet link from its website, if applicable,
to the Internet Store.
9. CONFIDENTIALITY
9.1 The Supplier acknowledges that all information provided to it regarding
Customers, Customer Data, promotional and marketing material provided by
GreatestEscapes, or corporate information relating to GreatestEscapes is
strictly confidential (the "Confidential Information") and will not be used in
any manner that may be detrimental to GreatestEscapes; provided, however, that
the Confidential Information may be disclosed to the Supplier's directors,
officers, employees or agents (collectively, the "Representatives") who need to
know such information for the purpose of transacting an Order, or in business
evaluation relating exclusively to the Supplier. The Supplier agrees that, prior
to disclosure of any Confidential Information to the Representatives, it shall
inform each Representative of the confidential nature of such information and
require them to treat such information in the strictest of confidence. The
Supplier further agrees that it will be responsible for any breach of this
agreement by its Representatives.
9.2 If the Confidential Information or any part thereof is disclosed to anyone
by the Supplier contrary to the terms of this Agreement, the Supplier will, at
the direction of GreatestEscapes, take all steps necessary, including legal
action, to prohibit such party from using or dealing with that Confidential
Information, and further agrees that it will indemnify and hold harmless
GreatestEscapes if it becomes necessary for GreatestEscapes to take any steps,
including legal action, to prohibit such party from using or dealing with such
Confidential Information.
<PAGE>
E-61
--------------------------------------------------------------------------------
5
10. DUTIES OF GREATESTESCAPES
10.1 During the term of this Agreement, GreatestEscapes agrees:
(a) to furnish the Supplier with current promotional advertising and promotional
material, in electronic form, or source material necessary to produce the
information in printed form, relating to the Internet Store;
(b) to use its best efforts to introduce, promote the sale of, and solicit and
obtain Orders for the Products, and to devote as much time and attention as may
be necessary to properly conduct such activities and to take any and all steps
and do any and all things which may be helpful or advisable to that end and to
conduct such activities in accordance with the terms of this Agreement;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders from the Internet Store, to adequately assist Customers with the use and
operation of the Internet Store, and to perform such servicing and follow-up on
Orders as good salesmanship and customer service shall require and as the
Supplier shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) to provide as requested by the Supplier periodic reports relating to the
marketing and sales of the Products;
(f) whenever requested by the Supplier, to follow up all sales correspondence
between the Supplier and any Customer and to assist in the solution of
commercial or technical problems;
(g) to maintain a record of any Customer complaints and to forward information
relating to such complaints to the Supplier;
(h) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities sold; and
(i) to bear the entire cost and expense of conducting its activities hereunder.
11. DUTIES OF THE SUPPLIER
11.1 During the terms of this Agreement, the Supplier agrees:
(a) to furnish GreatestEscapes with current promotional advertising and
promotional material if at all possible in electronic form relating to the
Products;
(b) to provide GreatestEscapes with its warranty and product approval and return
policy, along with copies of any other communications regularly sent to
Customers;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders received from GreatestEscapes, to adequately assist Customers, and to
perform such servicing and follow-up on Orders as good salesmanship and customer
service shall require and as GreatestEscapes shall reasonably request;
<PAGE>
E-62
--------------------------------------------------------------------------------
6
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) whenever requested by GreatestEscapes, to follow up all sales correspondence
between GreatestEscapes and any Customer and to assist in the solution of
commercial or technical problems;
(f) to maintain a record of any Customer complaints and to forward information
relating to such complaints to GreatestEscapes;
(g) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities of Products sold; and
(h) to bear the entire cost and expense of conducting its activities hereunder.
12. PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
12.1 This Agreement shall not be assigned by the Supplier without the prior
written consent of GreatestEscapes.
13. TERMINATION
13.1 This Agreement may be terminated at any time by either party by giving the
other at least sixty (60) days advance written notice to such effect.
13.2 Notwithstanding paragraph 13.1, if either party shall at any time commit
any breach of any covenant, warranty or agreement herein contained, then the
non-defaulting party may, at its option, in addition to any other remedies it
may have, terminate this Agreement by giving thirty (30) days notice in writing.
14. MISCELLANEOUS
14.1 All communications required or permitted by this Agreement to be given by
electronic mail by either party to the other shall be delivered electronically
to the following addresses:
(a) if to GreatestEscapes:
------------------------------------------------------------------------
(b) if to the Supplier:
[email protected]
Should there be a failure of electronic systems for more than eight (8) hours,
then communications under this clause may be delivered in accordance with clause
14.2.
14.2 All formal notices and other communications required or permitted by this
Agreement to be in writing given or made by either party to the other shall be
given or made in writing and be delivered by hand or double registered mail or
conveyed by telex or facsimile transmission to the parties at the following
addresses and numbers and to the attention of the following persons:
<PAGE>
E-63
--------------------------------------------------------------------------------
7
(a) if to GreatestEscapes:
#450, 800 West Pender Street
Vancouver, British Columbia, V6C 2V6 Telephone: (604) 683-1668
Facsimile: (604) 683-1055
Attention: Guy Brooks
(b) if to the Supplier:
PMB 257, 1840 41st Ave. #102
Capitola, CA 95010
Telephone: (831) 685-9702
Facsimile: (831) 661-0852
Attention: Sandy Castro
or to such other addresses, numbers, or persons as the parties may give each
other notice of from time to time. Proof of delivery or transmission in such
manner shall constitute proof of receipt.
14.3 Time shall be of the essence hereof.
14.4 This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior contracts, agreements and understandings between the
parties. There are no representations, warranties, collateral agreements or
conditions affecting this transaction other than as are expressed or referred to
herein in writing.
14.5 This Agreement shall be governed by and construed exclusively in accordance
with the laws of the Province of British Columbia and Canada.
<PAGE>
E-64
--------------------------------------------------------------------------------
8
14.6 This Agreement shall enure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
IN WITNESS WHEREOF the parties have hereunto affixed their hands and seals as of
the date referred to above.
The Common Seal of )
GREATESTESCAPES.COM CORP. )
was affixed in the presence of: )
)
[ILLEGIBLE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
The Common Seal of )
Sun Dreamer
)
was affixed in the presence of: )
)
[ILLEGIBILE]
) C/S
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
<PAGE>
E-65
--------------------------------------------------------------------------------
THIS SUPPLIER AGREEMENT is made the 2 day of November, 1999.
BETWEEN: GREATESTESCAPES.COM INC., a corporation registered in the State of
Nevada, having an office at #450, 800 West Pender Street, Vancouver, British
Columbia, V6C 2V6
("GreatestEscapes") OF THE FIRST PART
AND: ATTART Industries Inc., a corporation registered in the
Province/State of California, having an office at
4827 Eastern Ave, Bell, CA 90201, U.S.A.
(the "Supplier") OF THE SECOND PART
WHEREAS:
A. GreatestEscapes operates and owns an electronic commerce department store on
the Internet website address www.GreatestEscapes.com store (the "Internet
Store").
B. The Supplier manufactures and/or distributes products which GreatestEscapes
would like to offer for sale through the Internet Store (the "Products"), and
the Supplier would like to provide the Products to GreatestEscapes' customers
(the "Customer" or "Customers").
C. GreatestEscapes desires to appoint the Supplier to supply the Products to the
Customers of the Internet Store upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the respective warranties, representations, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) "Agreement" means this Agreement and all Schedules attached hereto;
(b) any reference in this Agreement to a designated "Paragraph", "Section",
"Schedule" or other subdivision refers to the designated Paragraph, Section,
Schedule or other subdivisions of this Agreement;
(c) the words "herein" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Paragraph, Section or
other subdivision of this Agreement;
(d) the word "including", when following any general statement term or matter,
is not to be construed to limit such general statement, term or matter to the
specific items or matters set forth immediately following such work or to
similar items or matters, whether or not non-limited language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto but rather refers to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter; and
<PAGE>
E-66
--------------------------------------------------------------------------------
2
(e) words importing the masculine gender include the feminine or neuter gender
and words in singular include the plural, and vice versa.
2. TERM OF AGREEMENT
2.1 Subject to subparagraph 2.2, this Agreement shall be effective for a twelve
(12) month term commencing on November, 1999 and ending October, 2000 on (the
"Initial Term").
2.2 Unless cancelled by written notice given by one party to the other on or
before the last day of the month prior to the date on which the Initial Term is
to end as set out in subparagraph 2.1, this Agreement will automatically renew
for one additional term of twelve (12) months (the "Subsequent Term").
2.3 At any time before the last day of the month prior to the date on which the
Initial Term or the Subsequent Term is to end, whichever term is in effect,
GreatestEscapes and the Supplier may review this Agreement and determine whether
to extend this Agreement for an additional term.
3. APPOINTMENT
3.1 Subject to the terms stated herein, GreatestEscapes hereby appoints the
Supplier, and the Supplier accepts such appointment, as a supplier of the
Products to the Customers of the Internet Store.
3.2 All of the Products provided by the Supplier to the Customers during the
term of this Agreement shall be purchased under and subject to the terms of this
Agreement.
3.3 The relationship of GreatestEscapes and the Supplier is that of independent
contractors and nothing contained in this Agreement shall be construed to give
either party the power to direct and control the day-to-day operations of the
other, or constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.
3.4 GreatestEscapes shall not be required to pay any commission or consideration
to the Supplier for any sales made on the Products at the Internet Store.
4. PRODUCTS AND PURCHASE PRICES
4.1 The Products to be provided by the Supplier shall be set out in a list which
includes detailed product descriptions, wholesale prices (the "Purchase Prices")
and suggested retail prices (the "Product List"). The Product List shall be
provided to GreatestEscapes prior to featuring the Products in the Internet
Store.
4.2 GreatestEscapes shall have sole discretion in determining the Products from
the Product List to be featured in the Internet Store.
4.3 The Purchase Prices shall be listed in the Internet Store in U.S. dollar
currency. The currency exchange rate used shall be that currently in effect at
the time of featuring the Product in the Internet Store, and quoted by a
Canadian chartered bank.
4.4 If the Supplier increases the Purchase Price of any Product, it shall
firstly give GreatestEscapes a minimum of 30 days advance written notice
specifying the increased purchase price(s) and the date upon which that price
<PAGE>
E-67
--------------------------------------------------------------------------------
3
increase shall take effect (the "Effective Date"). Upon the Effective Date, the
Purchase Price(s) set out in paragraph 4.1 hereof shall be deemed to be the
purchase price(s) specified in said notice.
5. PRODUCT ORDERS AND DELIVERY
5.1 GreatestEscapes shall receive electronically-communicated orders for the
Products from Customers through the Internet Store (the "Orders").
5.2 The Orders shall be communicated to the Supplier by electronic mail within
four (4) business days of receipt by GreatestEscapes, or sooner. The information
to be provided to the Supplier shall be the name of the Customer, address,
telephone number, electronic mail address if applicable, a list of the Products
ordered with detailed specifications, and the Customer's preferred method of
delivery (the "Customer Data").
5.3 The Supplier shall package and deliver the Products according to the
Customer Data no later than four (4) business days following the Supplier's
receipt of the Order (the "Delivery Date").
5.4 Confirmation of the Delivery Date shall be sent by electronic mail to
GreatestEscapes and to the Customer, if applicable.
5.5 The Supplier may use couriers and mail delivery services of its own choice,
provided that those services provide fast and effective delivery, or the
Supplier may use the courier and mail delivery services specified by
GreatestEscapes.
6. PAYMENT
6.1 The Supplier shall invoice GreatestEscapes for the Products purchased by the
Customers on net 30 day.
6.2 The Supplier's Monthly invoice shall include:
(a) the Purchase Price;
(b) applicable taxes, including GST, and provincial or state taxes; and
(c) shipping costs, which shall include the cost of delivering the Product from
the warehouse or place of the manufacture of the Supplier's Products to the
address specified in the Customer Data (the "Shipping Costs");
for each Product purchased by GreatestEscapes (the "Invoice Information"), and
shall specify whether the Monthly Invoice is in Canadian currency or another
currency.
6.3 Payment shall be made by GreatestEscapes to the Supplier by cheque, unless
another form of payment is reasonably requested by the Supplier, within 30 days
from Invoice date.
6.4 Payment shall be made by GreatestEscapes in the currency specified in the
Monthly Invoice, at the current exchange rate then in effect and quoted by a
Canadian chartered bank.
7. RETURNS AND CREDIT
7.1 The Supplier shall provide the Customer with information regarding its
policy on warranty, product approval and returns.
<PAGE>
E-68
--------------------------------------------------------------------------------
4
7.2 If the Customer is unsatisfied and returns a Product to the Supplier (the
"Return"), the Supplier shall:
(a) communicate by electronic mail the information regarding the Return to
GreatestEscapes within two (2) business days of receiving the Return;
(b) if the Product has been defected after use, customer needs to prepaid the
return and Attart will repair and return under warranty condition as stated.
8. PRODUCT PROMOTION
8.1 The Products shall be featured in the Internet Store according to the
specifications in the Product List.
8.2 GreatestEscapes shall have sole discretion over the retail price list for
the Products, and the design and marketing of the Internet Store; however,
GreatestEscapes will use its best efforts to promote the solicitation of Orders
for the Products.
8.4 The Supplier shall include an Internet link from its website, if applicable,
to the Internet Store.
9. CONFIDENTIALITY
9.1 The Supplier acknowledges that all information provided to it regarding
Customers, Customer Data, promotional and marketing material provided by
GreatestEscapes, or corporate information relating to GreatestEscapes is
strictly confidential (the "Confidential Information") and will not be used in
any manner that may be detrimental to GreatestEscapes; provided, however, that
the Confidential Information may be disclosed to the Supplier's directors,
officers, employees or agents (collectively, the "Representatives") who need to
know such information for the purpose of transacting an Order, or in business
evaluation relating exclusively to the Supplier. The Supplier agrees that, prior
to disclosure of any Confidential Information to the Representatives, it shall
inform each Representative of the confidential nature of such information and
require them to treat such information in the strictest of confidence. The
Supplier further agrees that it will be responsible for any breach of this
agreement by its Representatives.
9.2 If the Confidential Information or any part thereof is disclosed to anyone
by the Supplier contrary to the terms of this Agreement, the Supplier will, at
the direction of GreatestEscapes, take all steps necessary, including legal
action, to prohibit such party from using or dealing with that Confidential
Information, and further agrees that it will indemnify and hold harmless
GreatestEscapes if it becomes necessary for GreatestEscapes to take any steps,
including legal action, to prohibit such party from using or dealing with such
Confidential Information.
<PAGE>
E-69
--------------------------------------------------------------------------------
5
10. DUTIES OF GREATESTESCAPES
10.1 During the term of this Agreement, GreatestEscapes agrees:
(a) to furnish the Supplier with current promotional advertising and promotional
material, in electronic form, or source material necessary to produce the
information in printed form, relating to the Internet Store;
(b) to use its best efforts to introduce, promote the sale of, and solicit and
obtain Orders for the Products, and to devote as much time and attention as may
be necessary to properly conduct such activities and to take any and all steps
and do any and all things which may be helpful or advisable to that end and to
conduct such activities in accordance with the terms of this Agreement;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders from the Internet Store, to adequately assist Customers with the use and
operation of the Internet Store, and to perform such servicing and follow-up on
Orders as good salesmanship and customer service shall require and as the
Supplier shall reasonably request;
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) to provide as requested by the Supplier periodic reports relating to the
marketing and sales of the Products;
(f) whenever requested by the Supplier, to follow up all sales correspondence
between the Supplier and any Customer and to assist in the solution of
commercial or technical problems;
(g) to maintain a record of any Customer complaints and to forward information
relating to such complaints to the Supplier;
(h) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities sold; and
(i) to bear the entire cost and expense of conducting its activities hereunder.
11. DUTIES OF THE SUPPLIER
11.1 During the terms of this Agreement, the Supplier agrees:
(a) to furnish GreatestEscapes with current promotional advertising and
promotional material if at all possible in electronic form relating to the
Products;
(b) to provide GreatestEscapes with its warranty and product approval and return
policy, along with copies of any other communications regularly sent to
Customers;
(c) to maintain sales and support personnel with sufficient knowledge of the use
and operation of the Internet and sufficient skill to promote and follow-up
Orders received from GreatestEscapes, to adequately assist Customers, and to
perform such servicing and follow-up on Orders as good salesmanship and customer
service shall require and as GreatestEscapes shall reasonably request;
<PAGE>
E-70
--------------------------------------------------------------------------------
6
(d) to ensure the privacy of the Customers and the confidentiality of the
Customer Data is maintained and to provide the Customer with all reasonably
possible safeguards in that respect;
(e) whenever requested by GreatestEscapes, to follow up all sales correspondence
between GreatestEscapes and any Customer and to assist in the solution of
commercial or technical problems;
(f) to maintain a record of any Customer complaints and to forward information
relating to such complaints to GreatestEscapes;
(g) to provide written sales reports on an annual basis showing the Customers,
Products, and quantities of Products sold; and
12. PROHIBITION AGAINST ASSIGNMENT AND SUBLICENSE
12.1 This Agreement shall not be assigned by the Supplier without the prior
written consent of GreatestEscapes.
13. TERMINATION
13.1 This Agreement may be terminated at any time by either party by giving the
other at least sixty (60) days advance written notice to such effect.
13.2 Notwithstanding paragraph 13.1, if either party shall at any time commit
any breach of any covenant, warranty or agreement herein contained, then the
non-defaulting party may, at its option, in addition to any other remedies it
may have, terminate this Agreement by giving thirty (30) days notice in writing.
14. MISCELLANEOUS
14.1 All communications required or permitted by this Agreement to be given by
electronic mail by either party to the other shall be delivered electronically
to the following addresses:
(a) if to GreatestEscapes:
[email protected]
(b) if to the Supplier:
[email protected]
Should there be a failure of electronic systems for more than eight (8) hours,
then communications under this clause may be delivered in accordance with clause
14.2.
14.2 All formal notices and other communications required or permitted by this
Agreement to be in writing given or made by either party to the other shall be
given or made in writing and be delivered by hand or double registered mail or
conveyed by telex or facsimile transmission to the parties at the following
addresses and numbers and to the attention of the following persons:
<PAGE>
E-71
--------------------------------------------------------------------------------
7
(a) if to GreatestEscapes:
#450, 800 West Pender Street
Vancouver, British Columbia, V6C 2V6 Telephone: (604) 683-1668
Facsimile: (604) 683-1055
Attention: Guy Brooks
(b) if to the Supplier:
ATTART INDUSTRIES INC
4827 EASTERN AVE
BELL CA 90201
Telephone: (323) 266 6699
Facsimile: (323) 266 3199
Attention: John Lin
or to such other addresses, numbers, or persons as the parties may give each
other notice of from time to time. Proof of delivery or transmission in such
manner shall constitute proof of receipt.
14.3 Time shall be of the essence hereof.
14.4 This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior contracts, agreements and understandings between the
parties. There are no representations, warranties, collateral agreements or
conditions affecting this transaction other than as are expressed or referred to
herein in writing.
14.5 This Agreement shall be governed by and construed exclusively in accordance
with the laws of the Province of British Columbia and Canada.
<PAGE>
E-72
--------------------------------------------------------------------------------
8
14.6 This Agreement shall enure to the benefit of and be binding upon the
respective heirs, successors and assigns of the parties hereto.
IN WITNESS WHEREOF the parties have hereunto affixed their hands and seals as of
the date referred to above.
The Common Seal of )
GREATESTESCAPES.COM CORP. )
was affixed in the presence of: )
)
[ILLEGIBLE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
The Common Seal of )
)
was affixed in the presence of: )
)
[ILLEGIBILE]
) C/S
------------------------------------
Authorized Signatory )
)
------------------------------------
Authorized Signatory )
<PAGE>
E-73
--------------------------------------------------------------------------------
MERGER AGREEMENT DATED OCTOBER 12, 2000
AGREEMENT AND PLAN OF MERGER between Capstra Capital, Corp., a Washington
corporation ("Capstra"), GreatestEscapes (Washington) Corp, a Washington
corporation ("Subco"), and GreatestEscapes.com Inc., a Nevada corporation
("GreatestEscapes"), Capstra, Subco and GreatestEscapes being sometimes referred
to herein as the "Constituent Corporations."
WHEREAS, the board of directors of each Constituent Corporation deems it
advisable that Subco and Capstra merge into a single corporation in a
transaction intended to qualify as a reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended ("the
Merger") and upon completion of the Merger, pursuant to Rule 12g-3(a) of the
General Rules and Regulations of the Securities and Exchange Commission (the
"Commission"), Greatestescapes will elect to become the successor issuer to
Capstra for reporting purposes under the Securities Exchange Act of 1934.;
NOW, THEREFORE, in consideration of the premises and the respective
mutual covenants, representations and warranties herein contained, the parties
agree as follows:
1. SURVIVING CORPORATION. Capstra shall be merged with and into Subco
which shall be the surviving corporation in accordance with the applicable laws
of its state of incorporation.
2. MERGER DATE. The Merger shall become effective (the "Merger Date")
upon the completion of:
2.1. Adoption of this agreement by Capstra, Subco and GreatestEscapes
pursuant to the Washington Business Corporation Act; and
-----------------------------------
2.2. Execution and filing by Capstra and Subco of a Certificate of
Merger with the Secretary of State of the State of Washington in accordance with
the Washington Business Corporation Act .
-----------------------------------
3. TIME OF FILINGS. The Certificate of Merger shall be filed with the
Secretary of State of Washington upon the approval, as required by law, of this
--------------------------------
agreement by the Constituent Corporations and the fulfillment or waiver of the
terms and conditions herein.
4. GOVERNING LAW. The surviving corporation shall be governed by the
laws of the State of incorporation of Subco.
5. CERTIFICATE OF INCORPORATION. The Articles of Incorporation of Subco
shall be the Articles of Incorporation of the surviving corporation from and
after the Merger Date, subject to the right of Subco to amend its Articles of
Incorporation in accordance with the laws of the State of its incorporation.
6. BYLAWS. The Bylaws of the surviving corporation shall be the Bylaws
of Subco as in effect on the date of this agreement.
<PAGE>
7. BOARD OF DIRECTORS AND OFFICERS. The officers and directors of
Subco, or such other persons as shall be selected by it, shall be the officers
and directors of the surviving corporation following the Merger Date.
8. NAME OF SURVIVING CORPORATION. The name of the surviving corporation
will continue as "GreatestEscapes (Washington) Inc." unless changed by Subco.
9. CONVERSION. The mode of carrying the Merger into effect and the
manner and basis of converting the shares of Capstra into shares of
GreatestEscapes are as follows:
9.1 Payment of $20,000US by GreatestEscapes to the shareholders of
Capstra in the manner as described in section 9.7 herein (the "Cash Payment")
9.2. The aggregate number of shares of Capstra Common Stock issued and
outstanding on the Merger Date shall, by virtue of the Merger and without any
action on the part of the holders thereof, be converted into an aggregate of
450,000 shares of GreatestEscapes Common Stock adjusted by any increase for
fractional shares and reduced by any Dissenting Shares (defined below).
The 450,000 GreatestEscapes Common Stock to be issued hereunder ("the
GreatestEscapes Shares") will be issued pursuant to applicable exemptions under
the British Columbia Securities Act and to the shareholders of Capstra that are
U.S. residents, if any, pursuant to Section 4(2) of the Securities Act 1933
and/or Rule 506 of the General Rules and Regulations of the Securities and
Exchange Commission. The GreatestEscapes Shares will be restricted as to
transferability pursuant to applicable securities legislation in the Province of
British Columbia. In addition the GreatestEscapes Shares issued to U.S.
residents will be restricted as to transferability pursuant to Rule 144 thereof,
and will bear substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "ACT") AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE ACT. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT.
9.3. Upon completion of the Merger, there shall be 6,334,734 shares of
GreatestEscapes Common Stock issued and outstanding, subject to such
adjustments, held as follows: 450,000 common shares held by the former
shareholders of Capstra and 5,884,734 common shares held by the other
shareholders of GreatestEscapes.
9.4. All outstanding Common or Preferred Stock of Capstra and all
warrants, options or other rights to its Common or Preferred Stock shall be
retired and canceled as of the Merger Date.
9.5. Each share of Capstra Common Stock that is owned by Capstra as
treasury stock shall, by virtue of the Merger and without any action on the part
of Capstra, be retired and canceled as of the Merger Date.
<PAGE>
9.6. Each certificate evidencing ownership of shares of GreatestEscapes
Common Stock issued and outstanding on the Merger Date or held by
GreatestEscapes in its treasury shall continue to evidence ownership of the same
number of shares of GreatestEscapes's Common Stock.
9.7. GreatestEscapes Common Stock shall be issued to the shareholders
of Capstra Common Stock in exchange for their shares.
9.8. The shares of GreatestEscapes Common Stock to be issued in
exchange for Capstra Common Stock hereunder shall be proportionately reduced by
any shares owned by Capstra shareholders who shall have timely objected to the
Merger ("Dissenting Shares") in accordance with the provisions of the Washington
Business Corporation Act as provided therein.
10. EXCHANGE OF CERTIFICATES. As promptly as practicable after the
Merger Date, each holder of an outstanding certificate or certificates
theretofore representing shares of Capstra Common Stock (other than certificates
representing Dissenting Shares) shall surrender such certificate(s) for
cancellation to the party designated herein to handle such exchange (the
"Exchange Agent"), and shall receive in exchange a certificate or certificates
representing the number of full shares of GreatestEscapes Common Stock which
they are entitled to receive in exchange for their shares of Capstra Common
Stock. Any exchange of fractional shares will be rounded up to the next highest
number of full shares.
11. UNEXCHANGED CERTIFICATES. Until surrendered, each outstanding
certificate that prior to the Merger Date represented Capstra Common Stock
(other than certificates representing Dissenting Shares) shall be deemed for all
purposes, other than the payment of dividends or other distributions, to
evidence ownership of the number of shares of GreatestEscapes Common Stock into
which it was converted. No dividend or other distribution payable to holders of
GreatestEscapes Common Stock as of any date subsequent to the Merger Date shall
be paid to the holders of outstanding certificates of Capstra Common Stock;
provided, however, that upon surrender and exchange of such outstanding
certificates (other than certificates representing Dissenting Shares), there
shall be paid to the record holders of the certificates issued in exchange
therefor the amount, without interest thereon, of dividends and other
distributions that would have been payable subsequent to the Merger Date with
respect to the shares of GreatestEscapes Common Stock represented thereby.
12. EFFECT OF THE MERGER. On the Merger Date, the separate existence of
Capstra shall cease (except insofar as continued by statute), and it shall be
merged with and into Subco. All the property, real, personal, and mixed, of each
of Capstra and Subco, and all debts due to either of them, shall be transferred
to and vested in Subco, without further act or deed. Subco shall thenceforth be
responsible and liable for all the liabilities and obligations, including
liabilities to holders of Dissenting Shares, of each of the Capstra and Subco,
and any claim or judgment against either of Capstra or Subco may be enforced
against Subco.
13. REPRESENTATIONS AND WARRANTIES OF CAPSTRA. Capstra represents and
warrants that:
13.1. CORPORATE ORGANIZATION AND GOOD STANDING. Capstra is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Washington, and is qualified to do business as a foreign
<PAGE>
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
13.2. REPORTING COMPANY STATUS. Capstra has filed with the Securities
and Exchange Commission a registration statement on Form 10-SB which became
effective pursuant to the Securities Exchange Act of 1934 on February 9, 2000
and is a reporting company pursuant to Section 12(g) thereunder.
13.3. REPORTING COMPANY FILINGS. Capstra has timely filed and is
current on all reports required to be filed by it pursuant to Section 13 of the
Securities Exchange Act of 1934.
13.4. CAPITALIZATION. Capstra's authorized capital stock consists of
50,000,000 shares of Common Stock, $.001 par value, of which 5,000,000 shares
are issued and outstanding.
13.5. ISSUED STOCK. All the outstanding shares of its Common Stock are
duly authorized and validly issued, fully paid and non-assessable.
13.6. STOCK RIGHTS. Except as set out by attached schedule, there are
no stock grants, options, rights, warrants or other rights to purchase or obtain
Capstra Common issued or committed to be issued.
13.7. CORPORATE AUTHORITY. Capstra has all requisite corporate power
and authority to own, operate and lease its properties, to carry on its business
as it is now being conducted and to execute, deliver, perform and conclude the
transactions contemplated by this agreement and all other agreements and
instruments related to this agreement.
13.8. SUBSIDIARIES. Capstra has no subsidiaries.
13.9. FINANCIAL STATEMENTS. Capstra's financial statements dated August
31, 1999, November 30, 1999, February 28,2000 and May 31, 2000 copies of which
will have been delivered by Capstra to GreatestEscapes prior to the Merger Date
(the "Capstra Financial Statements"), fairly present the financial condition of
Capstra as of the date therein and the results of its operations for the periods
then ended in conformity with generally accepted accounting principles
consistently applied.
13.10. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in the Capstra Financial Statements, Capstra did
not have at that date any liabilities or obligations (secured, unsecured,
contingent, or otherwise) of a nature customarily reflected in a corporate
balance sheet prepared in accordance with generally accepted accounting
principles.
13.11. NO MATERIAL CHANGES. There has been no material adverse change
in the business, properties, or financial condition of Capstra since the date of
the Capstra Financial Statements.
13.12. LITIGATION. There is not, to the knowledge of Capstra, any
pending, threatened, or existing litigation, bankruptcy, criminal, civil, or
regulatory proceeding or investigation, threatened or contemplated against
Capstra or against any of its officers.
<PAGE>
13.13. CONTRACTS. Capstra is not a party to any material contract not
in the ordinary course of business that is to be performed in whole or in part
at or after the date of this agreement.
13.14. TITLE. Capstra has good and marketable title to all the real
property and good and valid title to all other property included in the Capstra
Financial Statements. The properties of Capstra are not subject to any
mortgage, encumbrance, or lien of any kind except minor encumbrances that do not
materially interfere with the use of the property in the conduct of the business
of Capstra.
13.15. TAX RETURNS. All required tax returns for federal, state, county,
municipal, local, foreign and other taxes and assessments have been properly
prepared and filed by Capstra for all years for which such returns are due
unless an extension for filing any such return has been filed. Any and all
federal, state, county, municipal, local, foreign and other taxes and
assessments, including any and all interest, penalties and additions imposed
with respect to such amounts have been paid or provided for. The provisions for
federal and state taxes reflected in the Capstra Financial Statements are
adequate to cover any such taxes that may be assessed against Capstra in respect
of its business and its operations during the periods covered by the Capstra
Financial Statements and all prior periods.
13.16. NO VIOLATION. Consummation of the Merger will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, law,
or regulation to which any property of Capstra is subject or by which Capstra is
bound.
14. REPRESENTATIONS AND WARRANTIES OF GreatestEscapes. GreatestEscapes
represents and warrants that:
14.1. CORPORATE ORGANIZATION AND GOOD STANDING. GreatestEscapes is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
14.2. CAPITALIZATION. GreatestEscapes's authorized capital stock
consists of 200,000,000 shares of Common Stock $.001 Par Value, of which
5,884,734 shares are issued and outstanding as of the date of this agreement.
14.3. ISSUED STOCK. All the outstanding shares of its Common Stock are
duly authorized and validly issued, fully paid and non-assessable.
14.4. CORPORATE AUTHORITY. GreatestEscapes has all requisite corporate
power and authority to own, operate and lease its properties, to carry on its
business as it is now being conducted and to execute, deliver, perform and
conclude the transactions contemplated by this Agreement and all other
agreements and instruments related to this agreement.
14.5. SUBSIDIARIES. Except as set out in Disclosure Schedule 14.5,
GreatestEscapes has no subsidiaries other than Subco .
<PAGE>
14.6. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against in GreatestEscapes Financial Statements,
GreatestEscapes did not have at that date any liabilities or obligations
(secured, unsecured, contingent, or otherwise) of a nature customarily reflected
in a corporate balance sheet prepared in accordance with generally accepted
accounting principles.
14.7. NO MATERIAL CHANGES. There has been no material adverse change in
the business, properties, or financial condition of GreatestEscapes since May31,
2000.
14.8. LITIGATION. Except as set out in Disclosure Schedule 14.8, there
is not, to the knowledge of GreatestEscapes, any pending, threatened, or
existing litigation, bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against GreatestEscapes or against any
of its officers.
14.9. CONTRACTS. GreatestEscapes is not a party to any material
contract not in the ordinary course of business or in the course of its proposed
acquisitions that is to be performed in whole or in part at or after the date of
this Agreement.
14.10. TITLE. GreatestEscapes has good and marketable title to all the
real property and good and valid title to all other property included in the
GreatestEscapes Financial Statements. The properties of GreatestEscapes are not
subject to any mortgage, encumbrance, or lien of any kind except minor
encumbrances that do not materially interfere with the use of the property in
the conduct of the business of GreatestEscapes.
14.11. NO VIOLATION. Consummation of the Merger will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, law,
or regulation to which any property of GreatestEscapes is subject or by which
GreatestEscapes is bound.
15. REPRESENTATIONS AND WARRANTIES OF SUBCO. Subvco represents and
warrants that:
15.1. CORPORATE ORGANIZATION AND GOOD STANDING. Subco is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Washington and is qualified to do business as a foreign corporation in
each jurisdiction, if any, in which its property or business requires such
qualification.
15.2. CAPITALIZATION. Subco's authorized capital stock consists of
100,000 shares of Common Stock no par value, of which 1,000 shares are issued
and outstanding.
15.3. ISSUED STOCK. All the outstanding shares of its Common Stock are
duly authorized and validly issued, fully paid and non-assessable.
15.4. CORPORATE AUTHORITY. Subco has all requisite corporate power and
authority to own, operate and lease its properties, to carry on its business as
it is now being conducted and to execute, deliver, perform and conclude the
transactions contemplated by this Agreement and all other agreements and
instruments related to this agreement.
<PAGE>
15.5 CORPORATE ASSETS. Subco has no assets or liabilities.
15.6. NO VIOLATION. Consummation of the Merger will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, law,
or regulation to which any property of Subco is subject or by which Subco is
bound.
16. CONDUCT OF CAPSTRA PENDING THE MERGER DATE. Capstra covenants that
between the date of this Agreement and the Merger Date:
16.1. No change will be made in Capstra's Certificate of Incorporation or
bylaws/articles.
16.2. Capstra will not make any change in its authorized or issued
capital stock, declare or pay any dividend or other distribution or issue,
encumber, purchase, or otherwise acquire any of its capital stock other than as
provided herein.
16.3. Capstra will use its best efforts to maintain and preserve its
business organization, employee relationships, and goodwill intact, and will not
enter into any material commitment except in the ordinary course of business.
17. CONDUCT OF GREATESTESCAPES PENDING THE MERGER DATE. GreatestEscapes
covenants that between the date of this Agreement and the Merger Date:
17.1. No change will be made in GreatestEscapes's Articles of
Incorporation or Articles.
17.2. GreatestEscapes will use its best efforts to maintain and preserve
its business organization, employee relationships, and goodwill intact, and will
not enter into any material commitment except in the ordinary course of
business.
18. CONDUCT OF SUBCO PENDING THE MERGER DATE. Subco covenants that
between the date of this Agreement and the Merger Date:
18.1. No change will be made in Subco's Articles of incorporation or
articles.
18.2. Subco will not enter into any material commitment except in the
ordinary course of business.
19. CONDITIONS PRECEDENT TO OBLIGATION OF CAPSTRA. Capstra's obligation
to consummate the Merger shall be subject to fulfillment on or before the Merger
Date of each of the following conditions, unless waived in writing by Capstra:
19.1. GREATESTESCAPES'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of GreatestEscapes set forth herein shall be true
and correct at the Merger Date as though made at and as of that date, except as
affected by transactions contemplated hereby.
19.2. GREATESTESCAPES'S COVENANTS. GreatestEscapes shall have performed
all covenants required by this agreement to be performed by it on or before the
Merger Date.
<PAGE>
19.3. APPROVAL. This agreement shall have been approved by
GreatestEscapes in such manner as is required by law including all appropriate
action by directors and, if required, by shareholders and/or approval by
regulatory authorities.
19.4. SUPPORTING DOCUMENTS OF GREATESTESCAPES. GreatestEscapes shall have
delivered to Capstra supporting documents in form and substance satisfactory to
Capstra to the effect that:
(i) GreatestEscapes is a corporation duly organized, validly
existing, and in good standing.
(ii) GreatestEscapes's authorized and issued capital stock is as set
forth herein.
(iii) The execution and adoption of this agreement have been duly
authorized by GreatestEscapes in such manner as is required by law including all
appropriate action by directors and, if required, by shareholders.
19.5. SUBCO'S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Subco set forth herein shall be true and correct at the Merger
Date as though made at and as of that date, except as affected by transactions
contemplated hereby.
19.6. SUBCO'S COVENANTS. Subco shall have performed all covenants
required by this agreement to be performed by it on or before the Merger Date.
19.7. APPROVAL. This agreement shall have been approved by Subco in such
manner as is required by law including all appropriate action by directors and,
if required, by shareholders.
19.8. SUPPORTING DOCUMENTS OF SUBCO. Subco shall have delivered to
Capstra supporting documents in form and substance satisfactory to Capstra to
the effect that:
(i) Subco is a corporation duly organized, validly existing, and in
good standing.
(ii) Subco's authorized and issued capital stock is as set forth
herein.
(iii) The execution and adoption of this agreement have been duly
authorized by Subco in such manner as is required by law including all
appropriate action by directors and, if required, by shareholders
20. CONDITIONS PRECEDENT TO OBLIGATION OF GREATESTESCAPES.
GreatestEscapes's obligation to consummate the Merger shall be subject to
fulfillment on or before the Merger Date of each of the following conditions,
unless waived in writing by GreatestEscapes:
20.1. CAPSTRA'S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Capstra set forth herein shall be true and correct at the Merger
Date as though made at and as of that date, except as affected by transactions
contemplated hereby.
20.2. CAPSTRA'S COVENANTS. Capstra shall have performed all covenants
required by this agreement to be performed by it on or before the Merger Date.
<PAGE>
20.3. APPROVAL. This Agreement shall have been approved by Capstra in
such manner as is required by law including all appropriate action by directors
and, if required, by shareholders.
20.4. SUPPORTING DOCUMENTS OF CAPSTRA. Capstra shall have delivered to
GreatestEscapes supporting documents in form and substance satisfactory to
GreatestEscapes to the effect that:
(i) Capstra is a corporation duly organized, validly existing, and in
good standing.
(ii) Capstra's authorized and issued capital stock is as set forth
herein.
(iii) The execution and adoption of this Agreement have been duly
authorized by Capstra in such manner as is required by law including all
appropriate action by directors and, if required, by shareholders.
21. ACCESS. From the date hereof to the Merger Date, GreatestEscapes,
Subco and Capstra shall provide each other with such information and permit each
other's officers and representatives such access to its properties and books and
records as the other may from time to time reasonably request. If the Merger is
not consummated, all documents received in connection with this agreement shall
be returned to the party furnishing such documents, and all information so
received shall be treated as confidential.
22. CLOSING.
22.1. The transfers and deliveries to be made pursuant to this agreement
(the "Closing") shall be made by and take place at the offices of the Exchange
Agent or other location designated by the Constituent Corporations without
requiring the meeting of the parties hereof. All proceedings to be taken and
all documents to be executed at the Closing shall be deemed to have been taken,
delivered and executed simultaneously, and no proceeding shall be deemed taken
nor documents deemed executed or delivered until all have been taken, delivered
and executed.
22.2. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission required by this agreement or any
signature required thereon may be used in lieu of an original writing or
transmission or signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original writing or
transmission or original signature.
22.3. At the Closing, Capstra shall deliver to the Exchange Agent in
satisfactory form, if not already delivered to GreatestEscapes:
(i) a list of the holders of record of the shares of Capstra Common
Stock being exchanged, with an itemization of the number of shares held by each,
the address of each holder, and the aggregate number of shares of
GreatestEscapes Common Stock to be issued to each holder;
(ii) evidence of the execution and adoption of this Agreement in such
manner as is required by law including all appropriate action by directors and,
if required, by shareholders;
<PAGE>
(iii) certified copies of the resolutions of the board of directors of
Capstra authorizing the execution of this agreement and the consummation of the
Merger;
(iv) the Capstra Financial Statements;
(v) secretary's certificate of incumbency of the officers and directors
of Capstra;
(vi) any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein; and
(vii) the share certificates for the outstanding Common Stock of Capstra
to be exchanged hereunder each share certificate duly endorsed for transfer.
22.4. At the Closing, GreatestEscapes shall deliver to the Exchange Agent
in satisfactory form, if not already delivered to Capstra:
(i) evidence of the execution and adoption of this Agreement in such
manner as is required by law including all appropriate action by directors and,
if required, by shareholders;
(ii) certificate of the Secretary of State of its state of incorporation
as of a recent date as to the good standing of GreatestEscapes;
(iii) certified copies of the resolutions of the board of directors of
GreatestEscapes authorizing the execution of this agreement and the consummation
of the Merger;
(iv) secretary's certificate of incumbency of the officers and directors
of GreatestEscapes;
(v) any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein;
(vi) the share certificates of GreatestEscapes (the "GreatestEscapes
Certificates") to be delivered to the shareholders of Capstra hereunder, in
proper names and amounts, as instructed by the Exchange Agent, and bearing
legends, if any, required and appropriate under applicable securities laws; and
(vii) $30,000US as follows:
(a) $10,000US in payment of fees and expenses incurred by Capstra; and
(b) $20,000US cash consideration to the shareholders of Capstra.
22.5 RELEASE OF CONSIDERATION. Upon filing of the Articles of Merger and
Certificate of Merger, the Exchange Agent is expressly authorized to:
(1) deliver the Capstra Certificates to GreatestEscapes;
(2) deliver the GreatestEscapes Certificates to the Capstra
Shareholders;
<PAGE>
(3) pay fees and expenses in the amount of $10,000US; and
(4) deliver $20,000US to the Capstra Shareholders.
23. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Constituent Corporations set out herein shall survive the
Merger Date.
24.ASSUMPTION OF REPORTING OBLIGAGTIONS. Upon effectiveness of the
Merger, pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Commission, Sintec will elect to become the successor issuer to Capstra for
reporting purposes under the Securities Exchange Act of 1934.
25. ARBITRATION.
25.1. SCOPE. The parties hereby agree that any and all claims (except
only for requests for injunctive or other equitable relief) whether existing
now, in the past or in the future as to which the parties or any affiliates may
be adverse parties, and whether arising out of this agreement or from any other
cause, will be resolved by arbitration before the American Arbitration
Association within the District of Columbia.
25.2. CONSENT TO JURISDICTION, SITUS AND JUDGMENT. The parties hereby
irrevocably consent to the jurisdiction of the American Arbitration Association
and the situs of the arbitration (and any requests for injunctive or other
equitable relief) within the District of Columbia. Any award in arbitration may
be entered in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
25.3. APPLICABLE LAW. The law applicable to the arbitration and this
agreement shall be that of the State of Nevada, determined without regard to its
provisions which would otherwise apply to a question of conflict of laws.
25.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its discretion,
allow the parties to make reasonable disclosure and discovery in regard to any
matters which are the subject of the arbitration and to compel compliance with
such disclosure and discovery order. The arbitrator may order the parties to
comply with all or any of the disclosure and discovery provisions of the Federal
Rules of Civil Procedure, as they then exist, as may be modified by the
arbitrator consistent with the desire to simplify the conduct and minimize the
expense of the arbitration.
25.5. RULES OF LAW. Regardless of any practices of arbitration to the
contrary, the arbitrator will apply the rules of contract and other law of the
jurisdiction whose law applies to the arbitration so that the decision of the
arbitrator will be, as much as possible, the same as if the dispute had been
determined by a court of competent jurisdiction.
25.6. FINALITY AND FEES. Any award or decision by the American
Arbitration Association shall be final, binding and non-appealable except as to
errors of law or the failure of the arbitrator to adhere to the arbitration
provisions contained in this agreement. Each party to the arbitration shall pay
its own costs and counsel fees except as specifically provided otherwise in this
agreement.
<PAGE>
25.7. MEASURE OF DAMAGES. In any adverse action, the parties shall
restrict themselves to claims for compensatory damages and\or securities issued
or to be issued and no claims shall be made by any party or affiliate for lost
profits, punitive or multiple damages.
25.8. COVENANT NOT TO SUE. The parties covenant that under no conditions
will any party or any affiliate file any action against the other (except only
requests for injunctive or other equitable relief) in any forum other than
before the American Arbitration Association, and the parties agree that any such
action, if filed, shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the prevailing party.
25.9. INTENTION. It is the intention of the parties and their affiliates
that all disputes of any nature between them, whenever arising, whether in
regard to this Agreement or any other matter, from whatever cause, based on
whatever law, rule or regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and that no party or
affiliate be required to litigate in any other forum any disputes or other
matters except for requests for injunctive or equitable relief. This Agreement
shall be interpreted in conformance with this stated intent of the parties and
their affiliates.
25.10. SURVIVAL. The provisions for arbitration contained herein shall
survive the termination of this agreement for any reason.
26. GENERAL PROVISIONS.
26.1. FURTHER ASSURANCES. From time to time, each party will execute
such additional instruments and take such actions as may be reasonably required
to carry out the intent and purposes of this agreement.
26.2. WAIVER. Any failure on the part of either party hereto to comply
with any of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed.
26.3. BROKERS. Each party agrees to indemnify and hold harmless the
other party against any fee, loss, or expense arising out of claims by brokers
or finders employed or alleged to have been employed by the indemnifying party.
26.4. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first-class certified mail, return receipt requested, or recognized
commercial courier service, as follows:
If to Capstra, to: 2160-650 West Georgia Street.
Vancouver, B.C. V6B 4N7
If to GreatestEscapes, to: 730-800 West Pender Street
Vancouver, B.C. V6C 2V6
If to Subco,to: 730-800 West Pender Street
Vancouver, B.C. V6C 2V6
<PAGE>
27. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Washington.
28. ASSIGNMENT. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this agreement
without the written consent of the other party shall be void.
29. COUNTERPARTS. This agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Signatures sent by
facsimile transmission shall be deemed to be evidence of the original execution
thereof.
30. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent shall be
Maitland & Company 700-625 Howe Street Vancouver B.C. The Closing shall take
place upon the fulfillment by each party of all the conditions of Closing
required herein, but not later than 15 days following execution of this
Agreement unless extended by mutual consent of the parties.
31. REVIEW OF AGREEMENT. Each party acknowledges that it has had time
to review this Agreement and, as desired, consulted with counsel. In the
interpretation of this agreement, no adverse presumption shall be made against
any party on the basis that it has prepared, or participated in the preparation
of, this Agreement.
32. SCHEDULES. All schedules attached hereto, if any, shall be
acknowledged by each party by signature or initials thereon.
<PAGE>
33. EFFECTIVE DATE. This effective date of this agreement shall be
October 16, 2000.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER between
Capstra Capital Corp., GreatestEscapes.com Inc. and GreatestEscapes(Washington)
Corp.
IN WITNESS WHEREOF, the parties have executed this Agreement.
CAPSTRA CAPITAL, CORP.
By: /s/ John Mackay
----------------------
John Mackay, President
GREATESTESCAPES.COM INC.
By: /s/Guy Brooks
------------------------
Guy Brooks, President
GREATESTESCAPES (WASHINGTON) CORP.
By: /s/Guy Brooks
-------------------------
Guy Brooks, President
<PAGE>
CERTIFICATE OF SECRETARY OF
CAPSTRA CAPITAL, CORP.
Written consent has been given to the adoption of the foregoing Agreement
and Plan of Merger by the holders of all of the outstanding stock of Capstra
Capital, Corp. in accordance with the provisions of Article 23.B.11 of the
Washington Business Corporations Act.
Dated: October 12, 2000
/s/ Roderick Saunders
----------------------------
Roderick Saunders, Secretary
<PAGE>
