RIDE INC, 8-K, 1996-10-28

RIDE INC
8-K, 1996-10-28
SPORTING & ATHLETIC GOODS, NEC

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<PAGE> 1
UNITED STATES
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

October 11, 1996
- --------------------------------------------------------------------------------
(Date of Report)

RIDE, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

<TABLE>
<CAPTION>
<S> <C> <C>
Washington 1-13042 91-1571027
- ------------------------------- ---------------------- ------------------------------------
(State or other jurisdiction of Commission File Number (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>

8160 304th Avenue Southeast
Preston, Washington 98050
- ---------------------------------------- -------------------------------------
(Address of principal executive offices) (Zip Code)

(206) 222-6015
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

Page 1 of 9
Exhibit Index on Page 9

<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

On October 11, 1996, Ride, Inc. (the "Company") sold the excess inventory and
brokered-OEM portions of its C.A.S. Sports International, Inc. ("C.A.S. Sports")
and C.A.S. Sports Agency, Inc. ("C.A.S. Agency") subsidiaries to a corporation
formed for that purpose by an investor group that included two former Company
executives and a number of former C.A.S. Sports employees.

The sale transaction was consummated pursuant to the terms of a Stock Purchase
Agreement (the "Agreement"), dated October 11, 1996, by and among the Company
and Gen-X Equipment, Inc., a Washington corporation ("Gen-X"). The aggregate
purchase price was comprised of $700,000 in cash, a short-term, non-interest
bearing promissory note in the amount of $300,000 and two long-term promissory
notes aggregating $2.0 million. The long-term notes are secured by the stock of
the sold corporations and bear interest at prime. No principal or interest
payments are due on the long-term notes for one year from the date of the
transaction. Thereafter, repayment is due in quarterly principal installments of
$100,000 plus interest though September 2002. The proceeds of the sale will be
used by the Company to repay current bank borrowings. The Company recognized a
pre-tax gain of approximately $500,000 on the sale. In connection with the
sale, the Company received an opinion from an investment banking firm as to the
fairness of the proceeds received in the transaction.

Immediately prior to the stock sale, all assets and liabilities of C.A.S. Sports
and C.A.S. Agency, other than fixed assets and certain prepaid assets, were
transferred to the Company and excluded from the sale. The Company will continue
to operate the branded and licensed products portions of the C.A.S. businesses.
Under the terms of the Agreement, Gen-X is prohibited from competing in the
Branded Products Business, as defined in the Agreement, for two years from the
date of the transaction and in the Licensed Products Business, as defined, until
December 31, 1997. The Company is prohibited from competing in the Excess
Inventory and Brokered-OEM businesses for two years, as those terms are defined
in the Agreement.

Gen-X is controlled by James J. Salter, former CEO and Director of the Company
and Kenneth J. Finkelstein, Senior Vice President and Director of the Company.
Mr. Salter resigned as a Director prior to the consummation of the transaction.
He had previously resigned as an officer of the Company. Mr. Finkelstein
resigned his officer and Director positions prior to the transaction. Mr.
Salter's resignation agreement with the Company, dated May 7, 1996 and Mr.
Finkelstein's resignation agreement with the Company, dated August 2, 1996, were
amended in connection with the sale transaction to allow Messrs. Salter and
Finkelstein to operate the purchased Excess inventory and Brokered-OEM
businesses.

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

(b) Pro forma financial information

Pro forma balance sheet as of June 30, 1996 and pro forma statements of
operations for the six months ended June 30, 1996 and the year ended
December 31, 1995.

Exhibit No. Description
---------- -----------

10.66 Stock Purchase Agreement, dated October 11, 1996, by and
between Ride, Inc. and Gen-X Equipment, Inc.
10.67 Amendment No. 1 to Resignation Agreement, dated October 11,
1996, by and between Ride, Inc. and James J. Salter.
10.68 Amendment No. 1 to Resignation Agreement, dated October 11,
1996, by and between Ride, Inc. and Kenneth J. Finkelstein.

<PAGE> 3
SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

RIDE, INC.
---------------------------
(Registrant)

Dated: October 28, 1996 By /s/ G. Scott Stewart
------------------------------
G. Scott Stewart
Senior Vice President and
Chief Financial Officer

<PAGE> 4
RIDE, INC.
PRO FORMA FINANCIAL STATEMENTS

On October 11, 1996, Ride, Inc. ("the Company") sold the excess inventory and
brokered-OEM businesses ("Sold Businesses") and certain assets of its CAS Sports
International, Inc. and CAS Sports Agency, Inc. subsidiaries to Gen-X
Corporation ("Gen-X"). The sales price was comprised of $700,000 in cash,
$300,000 in a short-term promissory note due in November 1996, and two long-term
promissory notes aggregating $2.0 million.

The accompanying unaudited pro forma balance sheet reflects the effects of the
disposition of the Sold Businesses on the Company's historical June 30, 1996
balance sheet as if the transaction had been completed on June 30, 1996.

The accompanying unaudited pro forma statements of income for the six months
ended June 30, 1996 and for the year ended December 31, 1995, reflect the
effects of the transaction on the Company's historical statements of income as
if the sale had been completed on January 1, 1996 and January 1, 1995,
respectively.

The pro forma financial statements may not be indicative of the actual financial
position or results of operations which would have actually been obtained had
the transaction described above been consummated at the dates indicated above or
of future results of the operations of the Company. See the accompanying Notes
to Pro Forma Financial Statements for the assumptions used in the preparation of
these statements. These statements should be read in conjunction with the
historical consolidated financial statements of the Company and related notes
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995.

<PAGE> 5
RIDE, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
(1)
---------- ----------- ---------
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 1,571 $ 700 (b) $ 2,271
Receivables, net 13,993 13,993
Inventories 11,865 11,865
Prepaids and other current assets 633 (25) (a) 608
Short term note receivable -- 300 (b) 300
Income taxes receivable 491 (170) (b) 321
Deferred tax assets 281 281
------- -------- -------
Total current assets 28,834 805 29,639
Furniture and equipment, net 6,664 (200) (a) 6,464
Long term notes receivable, net of discount -- 1,850 (b) 1,850
Goodwill, net 16,499 (2,000) (a) 14,499
Other assets 484 (25) (a) 459
------- -------- -------
Total assets $52,481 430 52,911
======= ======== =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 4,024 $ 100 (b) $ 4,124
Customer deposits 392 392
Accrued expenses 925 925
Current portion of long-term debt 82 82
------- -------- -------
Total current liabilities 5,423 100 5,523

Long-term debt, net of current portion 584 584
Deferred income taxes 69 69

Preferred stock 500 500
Common stock 38,743 38,743
Retained earnings 7,162 (2,250) (a) 7,492
2,580 (b)
------- -------- -------
Total equity 46,405 330 46,735
------- -------- -------
Total liabilities and shareholders' equity $52,481 $ 430 $52,911
======= ======== =======
</TABLE>

See accompanying notes

<PAGE> 6
RIDE, INC.
PRO FORMA STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
Less Sold Pro Forma
Historical Businesses Adjustments Pro Forma
(2) (3)
---------- ---------- ----------- ---------
<S> <C> <C> <C>
Net sales $ 26,278 ($8,481) $17,797
Cost of goods sold 18,727 (6,936) 11,791
-------- ------- ---- -------
Gross profit 7,551 (1,545) 6,006

Selling, general and administrative
expenses 8,671 (1,094) ($25) (a) 7,552
-------- ------- ---- -------
Operating income (loss) (1,120) (451) 25 (1,546)

Interest income (expense) 251 -- 72 (b) 323
-------- ------- ---- -------
Income (loss) before income taxes (869) (451) 97 (1,223)

Income tax expense (benefit) (298) (187) 24 (b) (461)
-------- ------- ---- -------
Net income (loss) ($ 571) ($ 264) $ 73 ($ 762)
======== ======= ==== =======

Net losss per share:
Primary ($ 0.06) ($ 0.07)
======== =======
Fully-diluted ($ 0.06) ($ 0.07)
======== =======
</TABLE>

See accompanying notes

<PAGE> 7
RIDE, INC.
PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
Less Sold Pro Forma
Historical Businesses Adjustments Pro Forma
(2) (3)
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $74,850 ($20,141) $54,709
Cost of goods sold 54,988 (16,744) 38,244
------- -------- ---- -------
Gross profit 19,862 (3,397) 16,465

Selling, general and administrative
expenses 10,868 (1,926) ($50) (a) 8,892
------- -------- ---- -------
Operating income (loss) 8,994 (1,471) 50 7,573

Interest income (expense) 388 -- 152 (b) 540
------- -------- ---- -------
Income (loss) before income taxes 9,382 (1,471) 202 8,113

Income tax expense (benefit) 3,427 (533) 52 (b) 2,946
------- -------- ---- -------
Net income (loss) $ 5,955 ($ 938) $150 $ 5,167
======= ======== ==== =======

Net income per share:
Primary $ 0.60 $ 0.52
======= ========
Fully-diluted $ 0.57 $ 0.49
======= ========
</TABLE>

See accompanying notes

<PAGE> 8
RIDE, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)

(1) Pro forma adjustments have been made to the historical balance sheet to
reflect the following:

(a) Disposition of assets of CAS sold in the transaction and the
goodwill related to the Sold Businesses.

(b) Receipt of proceeds on the sale including cash, a short-term
note in the amount of $300,000 and long-term promissory notes
totaling $1,850,000, net of original issue discount of
$150,000, less transaction costs and expenses of $100,000. The
gain on the sale was $500,000 less income taxes of $170,000.

(2) Represents the historical results of operations of the Sold Businesses
for the six months ended June 30, 1996 and the year ended December 31,
1995.

(3) Pro forma adjustments have been made to the historical statements of
income to reflect the following:

(a) Elimination of amortization expense on the goodwill allocated
to the Sold Businesses.

(b) Amortization of original issue discount on the long-term notes
receivable, assuming an interest rate of 8.25% per annum and
the related income tax expense.

<PAGE> 9
INDEX TO EXHIBITS

Exhibit No. Description Page
----------- ----------- ----
10.66 Stock Purchase Agreement, dated October 11, 1996,
by and between Ride, Inc. and Gen-X Equipment, Inc.
10.67 Amendment No. 1 to Resignation Agreement, dated October
11, 1996, by and between Ride, Inc. and James J. Salter.
10.68 Amendment No. 1 to Resignation Agreement, dated October
11, 1996, by and between Ride, Inc. and Kenneth J.
Finkelstein.

<PAGE> 1
STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of the 11th day of
October, 1996 by and between RIDE, INC., a Washington corporation, ("Seller"),
and the holder of all the outstanding shares of capital stock of C.A.S. Sports
Agency, Inc., a Washington corporation ("C.A.S. Agency"), and C.A.S. Sports
International, Inc., an Ontario corporation ("C.A.S. Sports") (together, the
"Companies"), and Gen-X Equipment, Inc., a Washington corporation ("Purchaser").

RECITALS

A. Seller is the owner of all of the issued and outstanding shares of the
capital stock of the Companies.

B. Seller desires to sell to purchaser, and Purchaser desires to purchase
from Seller, such capital stock on the terms and conditions provided herein.

AGREEMENTS

For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Purchaser and Seller hereby agree as follows:

1. DEFINITIONS. For the purposes of this Agreement:

"Assumed Note" shall have the meaning given it in Section 2.2 hereof.

"Brand" means any name, word, symbol, number, mark, design, trade name,
trademark, service mark, logo, trade dress, or other distinctive quality or
feature of any kind or nature whatsoever, whether or not formally registered
with any governmental authority, used, exploited, associated or in any way
connected with the design, manufacture, marketing and/or sale of Products, goods
and/or services in general commerce.

"Branded Products Business" means the use or association, by license or
ownership, of a Brand in the design, manufacture, labeling, marketing,
promotion, advertising and/or sale of Products.

"Brokered OEM Business" means the engagement of a third-party
manufacturer of snowboards, snowboard bindings, snowboard boots, and/or
snowboard-related apparel and accessories to manufacture any such items for and
on behalf of a wholesaler customer and the sale of such items so manufactured to
such wholesaler customer.

"Close-Out Business" means the purchase and resale of third-parties'
excess inventories of snowboards, snowboard bindings, snowboard boots,
snowboard-related

<PAGE> 2
apparel and accessories, in-line skates, bicycles, ski equipment, golf clubs,
skateboards and footwear.

"Closing Date" means the date of this Agreement.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Collection Fee" shall have the meaning given it in Section 5.6.3
hereof.

"Companies" shall mean C.A.S. Sports and C.A.S. Agency.

"Financial Information" shall have the meaning given it in Section 4.6
hereof.

"Indemnitee" shall have the meaning given it in Section 6.1.3 hereof.

"Indemnitor" shall have the meaning given it in Section 6.1.3 hereof.

"Inventory" shall have the meaning given it in Section 5.5 hereof.

"Long Term Note" shall have the meaning given it in Section 2.2 hereof.

"Person" means any natural person, corporation, partnership, joint
venture, association, organization, other entity or governmental or regulatory
authority.

"Products" means snowboards, snowboard bindings, snowboard boots,
skateboards, , and snowboard-, skateboard-, motocross-, and surf-related apparel
and accessories of any nature whatsoever.

"Private Label Business" means the design, manufacture, marketing
and/or sale of Products for or on behalf of the current and future retailer
customers of Seller and Purchaser, or either.

"Purchase Price" shall have the meaning given it in Section 2.2 hereof.

"Seller Receivables" shall have the meaning given it in Section 5.6.1
hereof.

"Short Term Note" shall have the meaning given it in Section 2.2
hereof.

"Stock" shall mean the 10,000 shares of common stock of C.A.S. Sports
and 100,000 shares of common stock of C.A.S. Agency owned by the Seller.

"Transferred Assets" shall have the meaning given it in Section 3.11
hereof.

"Uncollected Seller Receivables" shall have the meaning given it in
Section 5.6.3 hereof.

<PAGE> 3
"Weekly Report" shall have the meaning given it in Section 5.6.2
hereof.

2. THE ACQUISITION.

2.1 PURCHASE OF THE STOCK. Subject to the terms and conditions of
this Agreement, Purchaser hereby purchases from Seller, and Seller hereby sells
to Purchaser the Stock.

2.2 PURCHASE PRICE. Purchaser hereby tenders and Seller hereby
acknowledges receipt of the Purchase Price of US three million dollars (US
$3,000,000), paid in the manner of delivery of: (a) US seven hundred thousand
dollars ($700,000) payable by wire transfer in same day funds to a bank
designated by Seller; (b) a short term promissory note ("Short Term Note"), made
by Purchaser and payable to Seller or order in the amount of US three hundred
thousand and no/100 dollars (US $300,000.00), in substantially the form attached
as Exhibit 2.2A; (c) a long term promissory note ("Long Term Note"), made by
Purchaser and payable to Seller or order in the amount of US Nine Hundred
Seventy-Seven Thousand Six Hundred Twenty-Four Dollars (US $977,624), in
substantially the form attached as Exhibit 2.2B; and (d) an assumed debt
promissory note ("Assumed Note"), made by Purchaser and payable to Seller or
order in the amount of US One Million Twenty-Two Thousand Three Hundred
Seventy-Six Dollars (US $1,022,376), in substantially the form attached as
Exhibit 2.2C.

2.3 PURCHASE PRICE ADJUSTMENT. Subject to Section 6.4, the
parties agree the Purchase Price shall not be adjusted.

2.4 DELIVERY OF DOCUMENTS. Seller hereby tenders and Purchaser
hereby acknowledges receipt of (i) certificates representing the Stock duly
endorsed for transfer in blank; (ii) the resignations of the directors and
officers of the Companies in substantially the form attached hereto as Exhibit
2.4A. Purchaser hereby tenders and Seller hereby acknowledges receipt of the
resignation of James J. Salter as a director, and Kenneth J. Finkelstein as a
director and officer, of Seller, in substantially the form attached hereto as
Exhibit 2.4B.

3.0 REPRESENTATIONS AND WARRANTIES OF SELLER. To induce Purchaser
to enter into and perform this Agreement, Seller makes the representations and
warranties to Purchaser set forth below:

3.1 LEGAL STATUS OF THE COMPANIES. The Companies are corporations
duly organized, validly existing and in good standing under the laws of the
Province of Ontario and the State of Washington, respectively, and they have all
requisite power and authority to own, lease and operate their properties and
assets and carry on the business as it is now conducted. The Companies are duly
qualified to transact business as corporations and are in good standing in all
jurisdictions in which the failure to be so

<PAGE> 4
qualified would result in a material liability to either of the Companies or
have a material adverse effect upon the business of the Companies.

3.2 LEGAL STATUS OF SELLER. Seller has full power and authority
to execute, deliver and perform this Agreement.

3.3 DUE AUTHORIZATION AND EXECUTION. This Agreement has been duly
authorized, executed and delivered by Seller and is a legal, valid and binding
obligation of Seller, enforceable in accordance with its terms, except as
enforcement may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relation to or limiting
creditors' rights generally or (ii) general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or at law).

3.4 AUTHORIZED AND ISSUED SHARES. The authorized capital stock of
C.A.S. Sports consists solely of an unlimited number of shares of common stock,
without par value, of which 10,000 shares are issued and outstanding. The
authorized capital stock of C.A.S. Agency consists solely of 100,000 shares of
common stock, without par value of which 100,000 shares are issued and
outstanding. All issued and outstanding shares of the Companies are validly
issued, fully paid, nonassessable and free of any preemptive rights. There are
no outstanding or authorized subscriptions, options, warrants, calls, rights,
commitments or other agreements of any character which obligate or may obligate
the Companies to issue any additional shares of any of their capital stock or
any securities convertible into or exercisable or exchangeable for any shares of
their capital stock or evidencing the right to subscribed for any shares of any
of their capital stock. The Stock constitutes all of the issued and outstanding
capital stock of the Companies, all of which is owned by Seller.

3.5 SUBSIDIARIES AND AFFILIATES. The Companies do not own,
directly or indirectly, any capital stock or other equity securities of, or
otherwise control any corporation, partnership, limited liability corporation or
partnership, joint venture or other business association.

3.6 NO APPROVALS OR NOTICES; NO CONFLICTS. Except as specifically
set forth elsewhere herein (including in the Schedules), the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not (a) require any consent, approval or authorization
of, or declaration, filing or registration with, any Person as relates to
Seller, the failure to obtain which would have a material adverse effect upon
the transactions contemplated hereby, or to the Companies; (b) result in the
creation of any material lien or encumbrance upon any of the assets of either of
the Companies or upon the Stock; or (c) conflict with or result in a breach of
or constitute a default under any provision of the articles or certificate of
incorporation, or bylaws of either of the Companies.

<PAGE> 5
3.7 TITLE TO THE STOCK. Seller has good and marketable title to the
Stock, free and clear of any lien, encumbrance, adverse claim, preemptive right,
option or restriction on sale or transfer (other than restrictions imposed by
applicable securities laws).

3.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except for their
obligations under contracts arising in the ordinary course of business (correct
and complete copies of which, to the best knowledge of Seller, are in the
possession of Purchaser), obligations incurred in the ordinary course of
business, and any indebtedness for borrowed money and all tax liabilities due or
to become due that not yet payable, the Companies, to the best knowledge of
Seller, have no material liabilities, obligations or commitments of any nature
(whether accrued, absolute or contingent, known or unknown and whether matured
or unmatured).

3.9 LEASEHOLD INTEREST. C.A.S. Sports has a valid leasehold
interest (arising from the Leases described in Schedule 3.12) in certain real
property described in such Lease, including all improvements, fixtures, and
appurtenances thereto. To the best knowledge of Seller, the leasehold interest
in the real property is free and clear of all liens, encumbrances, easements,
restrictions, covenants and adverse claims of any kind except for those
described in and created under the Lease.

3.10 TITLE TO THE TRANSFERRED ASSETS. Except as set forth in
Schedule 3.10 and except as to the leasehold interests evidenced by the Leases
described in Schedule 3.12, each Company has good and marketable title to the
assets of the Companies, free and clear of all liens, mortgages, pledges,
encumbrances, security interests, restrictions, covenants, adverse claims and
charges of any kind; provided however that no representation or warranty is
given under this Section 3.10 as to the Companies' trademark(s).

3.11 NATURE AND CONDITION OF ASSETS. Schedule 3.11 sets forth an
accurate and complete description of the assets of the Companies to be
transferred to Purchaser hereunder (collectively, "Transferred Assets"). All
items of tangible and intangible property, rights and interests, of the
Companies, or either, of any nature whatsoever, including the proceeds from any
such items of property, rights and interests, wherever located and in whatever
form, not specifically identified as Transferred Assets hereunder, together with
all vested and contingent, known and unknown, liabilities of the Companies
existing as of the close of business on the Closing Date, are and shall remain
the property of Seller, whether or not specifically identified on a particular
Schedule; provided, however, that the liability of the Companies for certain
liabilities owed to Seller by the Companies, or either, shall remain a liability
of Purchaser to be satisfied in the manner provided in the Assumed Note.

3.12 LEASES. The Retail Section Leases ("Leases") creating the
C.A.S. Sports' leasehold interests in the real property described in such Leases
are identified on Exhibit 3.12. Other than the Leases, there are no leases,
subleases, tenancies or licenses of any portion of real property to which either
Company is a party. Except for those consents

<PAGE> 6
which have been obtained, if any, no consent is required from any party under
the Leases in connection with the consummation of the transaction contemplated
by this Agreement, and neither Seller nor the Companies have received notice nor
have any actual knowledge that any party to the Leases intends to cancel,
terminate or refuse to renew the same or to exercise or decline to exercise any
option or other right thereunder.

3.13 DOCUMENTS, BOOKS AND RECORDS. Purchaser or its representatives
have been furnished with true, correct and complete copies of (a) the articles
of incorporation and bylaws of the Companies, including all amendments thereto,
(b) the minute books of the Companies, and (c) the stock transfer books of the
Companies, all of which are complete, current and accurate.

3.14 TAXES. The Companies have duly and timely filed with the
appropriate governmental agencies (domestic and foreign), or obtained extensions
for filing, all tax returns, information returns and reports for all taxes
required to have been filed by the Companies and all such returns are true and
correct and all taxes shown to be payable thereon have been paid. The Companies
have not filed or entered into any election, consent, extension agreement or
waiver that extends any applicable statue of limitations. Neither of the
Companies are a party to any action or proceeding, pending or threatened, by any
governmental authority, domestic or foreign, for assessment or collection of
taxes, no unresolved claim for assessment or collection of such taxes has been
asserted against either of the Companies; and no audit or investigation by
foreign, federal, state or local governmental authorities is under way with
respect to either of the Companies. There are no liens for current taxes not yet
due (other than personal property taxes relating to the assets of the Companies
transferred to Purchaser as part of the transactions contemplated by this
Agreement) with respect to either of the Companies or such assets.

3.15 LEGAL PROCEEDINGS. Except as disclosed on Schedule 3.15, there
are no claims, actions, suits, arbitrations, proceedings or investigations
pending or, to the best knowledge of Seller, threatened against either of the
Companies before or by any court or governmental or non-governmental department,
commission, board, bureau, agency, instrumentality, or any other Person. There
are no outstanding or unsatisfied judgments, orders, decrees or stipulations
naming, or unsatisfied judgments, orders, decrees or stipulations naming, the
Companies or Seller which would alone or in the aggregate have or would be
expected to have any material adverse effect upon the business, business
prospects, assets or financial condition of the Companies.

3.16 LABOR RELATIONS. Except as disclosed on Schedule 3.18,
neither Company is a party to any written employment agreement with any of its
officers, directors, employees, consultants, agents or other person.

3.17 INSURANCE. Schedule 3.17 sets forth a list of all policies of
property, business interruption, product liability, general liability and excess
liability insurance individually maintained by the Companies; provided, however,
that Seller makes no

<PAGE> 7
representation or warranty with respect to the effect the transactions
contemplated by this Agreement shall have on such policies as they relate to the
Companies.

4.0 REPRESENTATIONS AND WARRANTIES OF PURCHASER. To induce Seller
to enter into this Agreement, Purchaser makes the representations and warranties
to Seller as follows:

4.1 LEGAL STATUS OF PURCHASER. Purchaser has full power and
authority to execute, deliver and perform this Agreement.

4.2 DUE AUTHORIZATION AND EXECUTION. This Agreement has been duly
authorized, executed and delivered by Purchaser and is a legal, valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except as enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors' rights generally, or (ii) general principles of equity
(regardless of whether such principles are considered in a proceeding in equity
or at law).

4.3 NO APPROVALS OR NOTICES; NO CONFLICTS. The execution, delivery
and performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby will not (a) conflict with or constitute a
default or violation (with or without the giving of notice, or the lapse of
time, or both) of any provision of law or any judgment, decree, order,
regulation or rule of any court or other governmental authority, or of any
permit, authorization, status, concession, franchise, license, statute, law,
ordinance, rule or regulation applicable to Purchaser or to Purchaser's
properties or assets; (b) require any consent, approval or authorization of, or
declaration, filing or registration with, any Person as relates to Purchaser;
(c) result in a default (with or without the giving of notice, or the lapse of
time, or both) under, acceleration or termination of, or the creation in any
party of the right to acceleration of any material obligation or to loss of a
material benefit under, any material agreement, lease, note, bond, or liability
to which Purchaser is a party or by which Purchaser is bound or to which
Purchaser's assets are subject; or (d) result in the creation of any material
lien or encumbrance upon any of the assets of Purchaser.

4.4 LEGAL PROCEEDINGS. There are no claims, actions, suits,
arbitration's, proceedings or investigations pending or, to the best knowledge
or Purchaser after due inquiry, threatened against Purchaser before or by any
court or governmental or non-governmental department, commission, board, bureau,
agency, instrumentality, or any other Person which if resolved adverse to such
Purchaser would preclude Purchaser from satisfying any material obligation under
this Agreement. There are no outstanding or unsatisfied judgments, orders,
decrees or stipulations naming Purchaser which restrict or prohibit the
transactions contemplated herein.

4.5 INVESTMENT. Purchaser is purchasing the Stock for its own
account, for investment purposes only, with no intention of distributing or
reselling the

<PAGE> 8
same or any part thereof, or interest therein, in any transaction
which would be in violation of the securities laws of the United States and
Canada or any state or province thereof. The foregoing sentence is without
prejudice, however, to a Purchaser's right at all times to sell or otherwise
dispose of all or any part of the Stock under an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), or under an
exemption from such registration requirements available under the Act and
subject, nevertheless, to the disposition of such Purchaser's property being at
all times within such Purchaser's control.

4.6 NO RELIANCE. All financial information and related data
relating to the Companies and the transactions contemplated by this Agreement
(together, "Financial Information") is known to and has been prepared and
assembled by Purchaser's authorized representatives. The Financial Information
has not been audited, reviewed or otherwise verified for accuracy or
completeness. Purchaser is solely responsible for confirming the accuracy and
completeness of the Financial Information or waiving the opportunity to do so,
and assume all risk associated therewith. In entering into this Agreement,
Purchaser is in no way relying on Financial Information prepared or provided by
Seller.

4.7 NO VIOLATION. Purchaser is unaware of any event, fact or
circumstance that, currently or with the passage of time, would cause any
representation and warranty of Seller to be violated or untrue in any material
respect.

5. COVENANTS OF THE PARTIES.

5.1 AGREEMENT NOT TO COMPETE.

5.1.1 BY PURCHASER. Purchaser understands and acknowledges
that Seller is entitled to protect and preserve the going-concern value of
Seller to the fullest extent permitted by law and contract, and that Seller
would not have entered into this Agreement absent the provisions of this Section
5.1.1. Therefore, for the consideration to be received by each Purchaser
hereunder, each Purchaser agrees that for a period of two (2) years from the
Closing Date (the "Restricted Period"), such Purchaser shall not, unless
released from such prohibition by Seller's Chief Executive Officer (and
consistent with such reasonable conditions as such Board of Directors may impose
on any such release, which release shall not be unreasonably withheld), anywhere
in the world, directly or indirectly, engage or participate in the Branded
Products Business and the Private Label Business, or either; provided, however,
that notwithstanding the prohibitions of this Section 5.1.1, Purchaser may
engage in the following business upon the following conditions: (a) Purchaser
may market and sell generic, non-Brand skateboards to Purchaser's retailer
customers; (b) Purchaser may engage a manufacturer of snowboard bindings to
manufacture on Purchaser's own behalf generic, non-Brand snowboard bindings to
sell with snowboards (which Purchaser otherwise have a right to sell under this
Agreement); (c) Purchaser may market and sell Private Label snowboards and
snowboard bindings for delivery after December 31, 1997; and (d) Purchaser may,

<PAGE> 9
from time to time, engage in such other business as is otherwise prohibited
hereunder upon the prior written consent of Seller, which consent shall be at
Seller's reasonable discretion. For purposes of this Agreement, Purchaser shall
be deemed to be engaged or participating in a business if such business is
carried on: (a) pursuant to an agreement, contract, understanding or
arrangement, written or oral, to which Purchaser, any employee, shareholder,
officer, director, or agent of Purchaser, or any Person in which Purchaser, or
any employee, shareholder, officer, director, or agent of Purchaser, directly or
indirectly, is an owner, manager, operator, general or limited partner, joint
venturer, shareholder, officer, director, employee, member, consultant, trustee
or agent, is a party; or (b) by a Person in which Purchaser, or any employee,
shareholder, officer, director, or agent of Purchaser, directly or indirectly,
is an owner, manager, operator, general or limited partner, joint venturer,
shareholder, officer, director, employee, member, consultant, trustee or agent;
proved that nothing contained in this Section 5.1.1 shall prevent the purchase
or ownership of ten percent (10%) or less of the outstanding shares of any
corporation by Purchaser, or any employee, shareholder, officer, director, or
agent of Purchaser; and provided, further, that Purchaser shall not be
considered to be engaged or participating in a business by reason of the fact a
shareholder, officer, director, employee or agent of Seller is also an employee,
shareholder, officer, director, or agent of Purchaser, or at any time provides
consulting or other services to Purchaser.

5.1.2 BY SELLER. Seller understands and
acknowledges that Purchaser isentitled to protect and preserve the going-concern
value of the Companies to the fullest extent permitted by law and contract, and
that Purchaser would not have entered into this Agreement absent the provisions
of this Section 5.2.1. Therefore, for the consideration to be received by Seller
hereunder, for the Restricted Period, Seller shall not, unless released from
such prohibition by Purchaser's authorized representative (and consistent with
such reasonable conditions as such representative may impose on any such
release, which release shall not be unreasonably withheld), anywhere in the
world, directly or indirectly, engage or participate in the Brokered OEM
Business and the Close-Out Business, or either. For purposes of this Agreement,
Seller shall be deemed to be engaged or participating in a business if such
business is carried on: (a) pursuant to an agreement, contract, understanding or
arrangement, written or oral, to which Seller, any employee, shareholder,
officer, director, or agent of Seller, or any Person in which Seller, or any
employee, shareholder, officer, director, or agent of Seller, directly or
indirectly, is an owner, manager, operator, general or limited partner, joint
venturer, shareholder, officer, director, employee, member, consultant, trustee
or agent, is a party; or (b) by a Person in which Seller, or any employee,
shareholder, officer, director, or agent of Seller, is an owner, manager,
operator, general or limited partner, joint venturer, shareholder, officer,
director, employee, member, consultant, trustee or agent; proved that nothing
contained in this Section 5.1.2 shall prevent the purchase or ownership of ten
percent (10%) or less of the outstanding shares of any corporation by Seller, or
any employee, shareholder, officer, director, or agent of Seller; and provided,
further, that Seller shall not be considered to be engaged or participating in a
business by reason of the fact any employee, shareholder, officer, director, or
agent of Purchaser is also the owner, directly

<PAGE> 10
or indirectly, of any amount of the common or preferred stock of Seller, or at
any time provides consulting or other services to Seller.

5.3 COOPERATION. Each party will fully cooperate with the
other party and its advisors (i) in connection with the steps required to be
taken as part of either parties' obligations hereunder, (ii) in order to comply
with the parties' respective financial reporting obligations under applicable
securities laws, (iii) in order to carry out the purposes of this Agreement,
(iv) in the preparation and filing of any tax returns, customs forms and other
reports the other party deems necessary, advisable or required in connection
with the transactions contemplated by this Agreement, and (v) in connection with
any audit to which the other party may be subject.

5.4 PROTECTION AND PRESERVATION OF RECORDS. In consideration
of Seller's transfer of the books and records relating to the Companies,
Purchaser agrees to protect and preserve the Companies' records (collectively,
"Company Records") for periods through and including the Closing Date, using the
same standard of care that Purchaser uses with respect to its own records and to
provide Seller with reasonable access to such records for its legitimate
business purposes during normal business hours for a period of five (5) years.
If necessary in connection with any audit, investigation or legal process,
Seller shall be permitted to copy the Company Records at Seller's expense during
normal business hours upon five (5) business days' prior written notice to
Purchaser. Purchaser agrees to notify Seller if they should receive any request,
order or subpoena to provide the Company Records to any governmental entity or
other third party.

5.5 INVENTORY. At any time from and after the Closing Date,
but in no event later than December 20, 1996, Purchaser shall purchase from
Seller the inventory ("Inventory") described on Schedule 5.5. The purchase price
for the Inventory (and any portion thereof) is set forth on Schedule 5.5, is
F.O.B. Seller's warehouses, wherever located, and is in addition to the Purchase
Price. Payment for the Inventory and shipping charges, if any, shall be due from
Purchaser 120 days from the date of invoice. Seller shall charge Purchaser for
shipment of Inventory from Seller's Preston, Washington warehouse the sum of
$8.00 per man-hour worked by Seller's employees fulfilling Purchasers' Inventory
orders. Purchaser shall be charged Seller's cost for shipments of Inventory from
Seller's other warehouses. Seller sells all Inventory to Purchaser under this
Agreement "AS IS" without warranty of any kind or nature, express, implied or
contractual, including without limitation, the implied warranties of
merchantability and fitness for a particular purpose.

5.6 SELLER RECEIVABLES.

5.6.1 COLLECTION. On the Closing Date, Seller will
provide Purchaser a schedule, which will set forth the list of the trade
accounts receivable accrued on the books of Seller arising from Seller's
operation of the Companies and due Seller as of the Closing Date, and all other
payments, refunds and such other sums as may

<PAGE> 11
be due Seller from third parties as of the Closing Date in connection with
Seller's operation of the Companies (collectively, "Seller Receivables").
Beginning on the first business day following delivery of the referenced
schedule, Seller authorizes Purchaser to act as its agent for the collection of
the Seller Receivables, subject to monitoring by Seller. Purchaser shall have
the right to endorse the name of Seller on any checks, drafts or instruments
received with respect to the Seller Receivables for deposit to the account of
Seller. Purchaser shall apply all payments received from the customers of the
Companies and all others who generated the Seller Receivables in payment of the
specific Seller Receivables to which such payments apply. On the Monday of each
week during the period any Seller Receivables remain due and owing, Purchaser
shall remit to Seller by wire transfer in same day funds to a bank designated by
Seller all payments received and applied against the Seller Receivables through
the end of the preceding week.

5.6.2 WEEKLY REPORT. On the Monday of each week
during the period any Seller Receivables remain due and owing, Purchaser shall
transmit to Seller a report, in electronic or other form and in such format
agreed to between the parties, containing a detailed description of all payments
received and applied against the Seller Receivables by Purchaser through the end
of the preceding week listing: (a) the invoice against which each such payment
was applied, together with the original remittance advice in connection with
each invoice; (b) a detail of the Seller Receivables remaining to be paid; and
(c) each Collection Fee paid to Purchaser and the payment from which such
Collection Fee was deducted (the "Weekly Report"). The Weekly Report shall
reconcile to the weekly cash remittances to Seller.

5.6.3 UNCOLLECTED SELLER RECEIVABLES. From time
to time during the period any Seller Receivables remain due and owing but in no
event less than once each calendar month, Purchaser and Seller shall review the
Seller Receivables then remaining uncollected. Seller may, in its sole
discretion, designate as uncollectable any Seller Receivables 90-days or greater
past-due ("Uncollected Seller Receivables"). Upon Seller's request, Purchaser
shall relinquish the Uncollected Seller Receivables to Seller for collection by
a professional collector of Seller's choice.

5.6.4 DUTY OF CARE; COVENANTS. Purchaser shall
take or cause to be taken such action as Seller may request so as to effect the
collection, and to provide Seller the full benefits, of the Seller Receivables.
In so acting on behalf of Seller, Purchaser expressly represents and warrants
that it shall (a) use its best efforts to collect the Seller Receivables, and
(b) not directly or indirectly enter into any agreement or understanding,
written or oral, regarding the payment of a Seller Receivable with any customer
or other party who generated such Seller Receivable that would adversely affect
Seller's ability to collect, or delay the collection of, such Seller Receivable.

5.6.5 COLLECTION FEE. For and in consideration
for their collection efforts on behalf of Seller under this Section 5.6,
Purchaser shall be entitled to payment of a collection fee ("Collection Fee") in
the amount of 1.75% of all payments received and applied against the Seller
Receivables. The Collection Fee shall be payable

<PAGE> 12
upon receipt of payment and may be deducted from each such payment by Purchaser.
No fee shall be paid to Purchaser for Uncollected Seller Receivables sent to
professional collections as provided in Section 5.6.3 hereof.

5.6.6 ACCOUNTING AND INSPECTION RIGHTS. Purchaser
shall keep complete and accurate records regarding all payments received,
payments made to Seller and collection efforts by Purchaser on Seller's behalf,
and shall provide to Seller such reports in connection with such records, in
electronic or other format, as may be reasonably requested by Seller. Purchaser
shall, during Purchaser's normal business hours, afford Seller's accountants,
counsel, officers and other representatives access to, and permit the inspection
and copying at Seller's cost of, Purchaser's books and records relating to the
Seller Receivables. Upon Seller's request, Purchaser shall also provide access
to such books and records, during Purchaser's normal business hours, for
examination, reproduction and audit by an independent accounting firm of
Seller's choice; provided, however, that Purchaser shall not be required to
permit more than two (2) such audits. If any such audit discloses any
understatement of the payments due Seller, Purchaser shall immediately pay to
Seller any deficiency. If such deficiency is in excess of ten percent (10%) of
the amounts determined to be payable to Seller pursuant to such audit or if the
audit discloses any breach by Purchaser of its representations and covenants in
Section 5.6.4 hereof, Purchaser shall reimburse Seller for all costs incurred by
Seller to conduct such audit. Such reimbursement shall be in addition to any
damages or other remedies available to Seller in respect to such payment
deficiency and/or breach.

5.7 SPACE RENTAL. For a period not to exceed ninety (90)
days following the Closing Date, Purchaser shall make available to Seller the
following space in the premises covered by the Lease: one (1) conference room;
one (1) office; and five (5) desks and chairs in one of two "pit" areas in such
premises. Seller shall pay Purchaser a monthly service fee for use of such
office space in the amount of US four thousand and no/100 dollars (US
$4,000.00), which sum is inclusive of all charges, taxes and assessments but is
exclusive of actual long distance telephone charges of Robert Marcovitch and
Mark Brasier, for which amounts Purchaser shall separately invoice Seller, and
shall be due and payable on the fifth (5th) day of each calendar month
Purchaser's offices are occupied by Seller's employees.

5.8 OFFICE EQUIPMENT. Promptly following the Closing
Date, Sellers may purchase certain office equipment included in the Transferred
Assets for a sum equal to Purchaser's aggregate cost therefor as reflected on
the books of Purchaser.

6.0 INDEMNIFICATION AND SURVIVAL OF WARRANTIES.

6.1 INDEMNIFICATION.

6.1.1 BY SELLER. Seller agrees to indemnify
Purchaser, its successors and permitted assigns, and the officers, directors,
affiliates, employees, controlling Persons and agents of the foregoing, if any,
and to hold each such party

<PAGE> 13
harmless against and in respect of any and all losses, damages, costs and
expenses, including attorneys' and accountants' fees, incurred by Purchaser by
reason of a breach of any of the representations, warranties, covenants or
agreements made by Seller in this Agreement, and any damages suffered and costs
and liabilities incurred by Purchaser as a result of Seller's failure to satisfy
all liabilities of the Companies, or either, arising on or before the date of
this Agreement. Without limiting the generality of the foregoing, Seller shall
specifically indemnify and save Purchaser harmless from the cost of all accrued
and unused vacation of the Companies' employees as of the Closing Date,
severance benefits of the Companies' current employees arising under the current
form of such employees' respective employment agreements prorated for that
portion of such employees' service period with the Companies as of the Closing
Date, and all third-party warranty claims relating to goods sold by the
Companies prior to the Closing Date and for which all conditions to such
warranty have been satisfied.

6.1.2 BY PURCHASER. Purchaser agrees to indemnify
Seller, its successors and permitted assigns, and the officers, directors,
affiliates, employees, controlling Persons and agents of the foregoing and to
hold each such party harmless against and in respect of any and all losses,
damages, costs and expenses, including attorneys' and accountants' fees,
incurred by Seller by reason of a breach of any of the representations,
warranties, covenants or agreements made by Purchaser in this Agreement, and any
damages suffered and costs and liabilities incurred by Seller as a result of
Purchaser's failure to satisfy all liabilities of the Companies, or either,
arising after the date of this Agreement.

6.1.3 NOTICE. The party entitled to
indemnification hereunder (the "Indemnitee") shall promptly notify in writing
the party against whom the indemnification is sought hereunder (the
"Indemnitor") of any matters which may give rise to the right to indemnification
hereunder.

6.1.4 CLAIMS. If the Indemnitee is threatened
with any claim or any claim is presented to, or any action or proceeding
commenced against, the Indemnitee which may give rise to the right of
indemnification hereunder, the Indemnitee will promptly give written notice
thereof to the Indemnitor. The Indemnitor, by delivery of written notice to the
Indemnitee within twenty (20) days of receipt of written notice for indemnity
from the Indemnitee, may elect to contest such claim, action or proceeding, in
which event such contest shall be conducted in such manner as the Indemnitor
deems necessary or advisable; provided, however, that (a) such written notice
shall be accompanied by a written acknowledgment of the Indemnitor's liability
for the indemnified liabilities, (b) the counsel undertaking the defense of such
claim, action or proceeding shall be acceptable to the Indemnitee, and (c) if
the Indemnitee requests in writing that such claim, action or proceeding not be
contested, then it shall not be contested but shall also not be covered by the
indemnities provided herein. The Indemnitor shall not have the right to settle
an indemnifiable matter except with the consent of the Indemnitee, after
delivering a written description of the proposed settlement to, and receiving
consent from, the Indemnitee, after delivering a written

<PAGE> 14
description of the proposed settlement to, and receiving consent from, the
Indemnitee and, if the Indemnitor is able to achieve such settlement, the
Indemnitor may satisfy its obligations with respect to such indemnified
liabilities by consummating such settlement. If the Indemnitor does not elect to
contest an indemnifiable matter, the Indemnitee shall have the right to
prosecute, defend, compromise, settle or pay any claim, but the Indemnitee shall
cooperate with each other in connection with any matter or claim for
indemnification.

6.1.5 EFFECT OF FAILURE TO GIVE NOTICE. Failure
to give any notice shall not affect an Indemnitee's right to indemnity except to
the extent the Indemnitor has been prejudiced thereby.

6.2 SURVIVAL. Notwithstanding any investigation made by
Seller or Purchaser, the representations and warranties of Seller and of
Purchaser contained in this Agreement shall survive the execution of this
Agreement until the first anniversary of Closing Date.

6.3 MINIMUM AND MAXIMUM; SOLE REMEDY. In no event shall
Seller be liable under this Section 6 for any amounts exceeding, in the
aggregate, that portion of the Purchase Price then received by Seller. The
rights of indemnity set forth in this Section 6 shall be the sole remedy for any
breach of a representation or warranty made herein.

6.4 ADJUSTMENT TO PURCHASE PRICE. The parties agree that
any indemnity payments hereunder shall be treated as an adjustment to the
Purchase Price.

7.0 NOTICES. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when personally delivered, or
deposited in the mail, postage prepaid, sent certified or registered, or
delivered to an overnight carrier or sent by facsimile and addressed as
respectively set forth below or to such other address as any party shall have
previously designated by such a notice. Any notice so delivered personally, by
U.S. Postal Service by overnight carrier or by facsimile shall be deemed to be
received on the date of delivery.

Notices shall be sent as follows:

TO PURCHASER:

2700 Dufferin Street, #3
Toronto, Ontario M6B 4J3
Attention: Kenneth J. Finkelstein
Facsimile: (416) 784-5862

<PAGE> 15
TO SELLER:

8160 304th Avenue, SE
Preston, WA 98050
Attention: G. Scott Stewart
Facsimile: (206) 222-6499

with a copy to:

Heller, Ehrman, White & McAuliffe
6100 Columbia Center
701 Fifth Avenue
Seattle, WA 98104
Attention: Michael J. Erickson, Esq.
Facsimile: (206) 447-0849

8. 0 GENERAL

8.1 AMENDMENT. The parties hereto may amend, modify or
supplement this Agreement at any time, but only in writing duly executed on
behalf of all parties hereto.

8.2 ENTIRE UNDERSTANDING. The terms set forth in this
Agreement supersede all previous discussions, understandings, disclosures,
representations, warranties, and agreements between them with respect to the
subject matter hereof, and are intended by the parties as a final, complete and
exclusive expression of the terms of their agreement and may not be
contradicted, explained or supplemented by evidence of any prior agreement, any
contemporaneous oral agreement or any additional terms. All schedules are
incorporated herein by this reference. Neither party has relied on any
disclosures, representations, warranties, or agreements except as set forth
herein and no representations or warranties are made in connection with the
transactions contemplated hereby except as set forth herein.

8.3 WAIVERS. Any terms, covenants, representations,
warranties or agreements of either party hereto may be waived at any time by an
instrument in writing executed by the party for whose benefit such terms exist.
The failure of either party at any time or times to require performance of any
provisions hereof shall in no manner affect its right at a later time to enforce
the same. No waiver by either party of any condition or of any breach of any
terms, covenants, representations, warranties or agreements contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any other
condition or breach in other instances or a waiver of any other condition or any
breach of any other terms, covenants, representations, warranties or agreements.

<PAGE> 16
8.4 HEADINGS. The headings preceding the text of the
sections of this Agreement are for convenience only and shall not be deemed
parts thereof

8.5 APPLICABLE LAW. This Agreement, including all matters
of construction, validity and performance, shall be governed by and construed
and enforced in accordance with the laws of the Province of Ontario, as applied
to contracts executed and to be fully performed in such Province by citizens of
such Province. The federal and provincial courts situated in Toronto, Ontario
shall be the exclusive forum for the litigation of any dispute relating to this
Agreement. Each party hereto hereby consents to the jurisdiction and venue of
such courts and waives any defense of inconvenient forum.

8.6 PARTIES IN INTEREST; ASSIGNMENT. This Agreement is
not intended, nor shall it be construed, to confer any enforceable rights on any
Person not a party hereto. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and permitted assigns of the parties hereto, whether
herein so expressed or not. Seller may without the consent of Purchaser assign
Seller's rights hereunder to any corporation controlling, controlled by or under
common control with Seller, or any general or limited partnership in which
Seller is a general partner(s), but no such assignment shall relieve Seller from
liability for breach of any of its obligations hereunder. Neither this Agreement
nor any of the rights, interests or obligations hereunder of either party hereto
shall otherwise be assigned without the prior written consent of the other
party.

8.7 PUBLICITY. Prior to the closing of this Agreement,
neither of the parties hereto shall make or issue, or cause to be made or
issued, any announcement or written statement concerning this Agreement or the
transactions contemplated hereby for dissemination to the general public without
the prior consent of the other party, unless Seller determines that disclosure
is required by applicable securities laws; provided, however, that if Seller
determines that disclosure is so required it shall give Purchaser reasonable
advance notice of such disclosure.

8.8 ATTORNEYS' FEES. In the event of any action to
enforce any provision of this Agreement, or on account of any default under or
breach of this Agreement, the prevailing party in such action shall be entitled
to recover, in addition to all other relief, from the other party all attorneys'
fees and costs incurred by the prevailing party in connection with such action
(including, but not limited to, any appeal thereof).

8.9 SEVERABILITY. If any provision of this Agreement is
ultimately held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby. To the extent permitted by applicable law, each
party hereby waives any provision of law which renders any provision hereof
invalid, illegal or unenforceable in any respect. In the event that any
provision hereof shall be held to be invalid, illegal or unenforceable and the
absence of such provision materially and adversely affects the substantive
rights of the

<PAGE> 17
parties hereunder, the parties hereto shall use their best efforts to replace
the invalidated provision with a legal, valid and enforceable provision which,
insofar as practicable, implements the intent of the invalidated provision.

8.10 THIRD-PARTY BENEFICIARIES. The rights and
obligations under this Agreement are personal to Purchaser and Sellers only.
Unless specifically stated to the contrary, nothing herein creates rights in
third-parties enforceable against any party to this Agreement

IN WITNESS WHEREOF, the parties hereto have entered into and signed
this Agreement as of the date and year first above written.

SELLER:

RIDE, INC.

By: /ss/ David H. Davis
------------------------------
Its: General Counsel and Secretary

PURCHASER:

Gen-X Equipment, Inc.

By: /ss/ Kenneth J. Finkelstein
------------------------------
Its: President

<PAGE> 18
SCHEDULE 3.11

The following Schedule 3.11 sets forth an accurate description of the
Transferred Assets.

- - Furniture and Fixtures

- - Computer Hardware

- - Computer Software

- - "C.A.S." Trademark and Logo

- - Leasehold Improvements

- - Prepaids as follows:
Business Taxes Unit #1
Business Taxes Unit #3
Raptors Basketball Seats
Raptors Basketball Tickets
Computer Serv. Contract
Macola Consulting
Boiler Insurance
Hockey Tickets
Incorp. Costs
Organization Costs

<PAGE> 19
EXHIBIT 3.12

The following Schedule 3.12 identifies the Leases, copies of which are
already in Purchaser's possession.

1. The Lease Between C.A.S. Sports and Dufferin Business Centre,
dated December 8, 1993, covering the premises commonly known as 2700 Dufferin
Street, #3, Toronto, Ontario M6B 4J3.

2. The Lease Between C.A.S. Sports and Dufferin Business Centre,
dated January 14, 1994, covering the premises commonly known as 2700 Dufferin
Street, #3, Toronto, Ontario M6B 4J3.

<PAGE> 20
SCHEDULE 3.15

The following Schedule 3.15 describes the claims, actions, suits and other
proceedings, pending, or to the best knowledge of Seller, threatened against the
Companies, or either.

1. The actual or threatened claim of Anna del Signore for
wrongful termination, hostile work environment and related causes of action.

<PAGE> 21
SCHEDULE 3.16

The following employees have employment agreements with C.A.S. Sports, true and
correct copies of which are already in the possession of Purchaser.

Alan Langer

Howard Cohen

Sandra Pelegrin

Corrine Griffiths

Gary Kell

E. Nicole Sunshine

<PAGE> 22
SCHEDULE 3.17

The following Schedule 3.17 describes the property, casualty and other policies
of insurance currently being individually maintained by the Companies.

Insurer: Citadel General Assurance Co.

Policy #: 4-900169

Policy Term: December 1, 1995 to December 1, 1996.

Coverage: Property Per attached

Insurer: Citadel General Assurance Co.

Policy #: 4-900196

Policy Term: December 1, 1995 to December 1, 1996.

Coverage: General Liability

<PAGE> 23
SCHEDULE 5.5

The following Schedule 5.5 describes the Inventory Purchaser are purchasing from
Seller:

All inventory of the Companies existing as of the Closing Date, except the
in-line products, which include, but are not limited to, all C.A.S.-branded
products. The purchase price for each such item of Inventory shall be Seller's
landed cost therefor.

<PAGE> 24
EXHIBIT 2.2A

PROMISSORY NOTE

US $300,000.00 October , 1996
Toronto, Ontario

1. Promise to Pay. FOR VALUE RECEIVED, the undersigned
("Maker"), promises to pay to the order of Ride, Inc. ("Holder") at 8160 - 304th
Avenue SE, Preston, Washington, 98050 or at such other place as Holder may from
time to time designate in writing, the principal sum of US Three Hundred
Thousand and 00/100 Dollars (US$300,000.00), together with interest on the
unpaid principal balance thereof, as provided below.

2. Interest Payment. Interest on the outstanding principal
balance of this Note shall be waived, provided Maker is not in default
hereunder.

3. Principal Payment. Maker shall pay the principal, and any
interest and fees and costs required under this Note, no later than fourteen
(14) calendar days from the Closing Date, as that term is defined in the Stock
Purchase Agreement ("Agreement") of even date between Holder and Maker.

4. Application of Payments. All payments hereunder shall be
applied first to any fees and costs due hereunder, then to accrued interest, and
finally to reduction of the then unpaid principal balance.

5. Default. If Maker defaults in the payment of any sum when due
hereunder, , or if a default occurs and remains uncured under the terms of that
certain Stock Pledge and Security Agreement of even date ("Security Agreement"),
between Maker and Holder, and securing the indebtedness of Maker to Holder
evidenced hereby, then, or any time thereafter, at the option of Holder, without
demand or notice, the outstanding balance of this Note, together with all
interest accrued thereon and all costs and expenses due under this Note shall
become immediately due and payable and shall bear interest at the rate of nine
percent (9%) (the "Default Rate"), until paid in full, and all liens given to
secure the payment thereof, including without limitation, all liens provided by
and created under the Security Agreement, may be immediately foreclosed. Failure
to exercise this option, or any other right Holder may in such event be entitled
to, shall not constitute a waiver of the right to exercise such option or any
other right in the event of any subsequent default.

6. Attorneys' Fees and Costs. If this Note is placed in the hands of
an attorney for collection, Maker promises to pay Holder's attorneys' fees and
all costs actually incurred

<PAGE> 25
in the collection process. Such fees and costs shall become part of the
indebtedness evidenced by this Note, and shall bear interest at the Default
Rate.

7. Prepayment. Maker may prepay all or any portion of the sums
due under this Note without notice or penalty.

8. Security. This Note is secured by a security interest in the
Stock as that term is defined in the Agreement, and the stock of any subsidiary
of Maker issued while any sums remain due and owing hereunder, all as evidenced
by the Security Agreement.

9. Purpose. Maker represents and warrants to Holder that all
sums owing under this Note are solely intended for a business purpose, and not
for consumer or household purposes.

10. Liability. Maker hereby waives demand, presentment for
payment, protest and notice of protest and of nonpayment and agrees that any
modification or extension of the terms of payment made by Holder, with or
without notice, at the request of Maker or otherwise, or any release of all or
any portion of the security from the lien of Holder's security interest therein,
shall not diminish or impair Maker's liability for the payment of all amounts
due hereunder.

11. Successors. All of the covenants, provisions and conditions
herein contained are made on behalf of and shall apply to and bind the
respective officers, directors, shareholders, employees, heirs, personal
representatives, estates, marital communities, trustees, agents, successors, and
assigns of Maker and Holder.

12. Governing Law. This Note shall be governed by and construed
in accordance with the laws of the State of Washington, and venue for any
proceeding relating to this Note shall be in the federal and state courts
situated in King County, Washington.

MAKER:

Gen-X Equipment, Inc.

By:________________________
Its:_______________________

<PAGE> 26
EXHIBIT 2.2B

PROMISSORY NOTE

US $977,624.00 October , 1996
Toronto, Ontario

1. Promise to Pay. FOR VALUE RECEIVED, the undersigned
("Maker"), promises to pay to the order of Ride, Inc. ("Holder") at 8160 - 304th
Avenue SE, Preston, Washington, 98050 or at such other place as Holder may from
time to time designate in writing, the principal sum of US Nine Hundred
Seventy-Seven Thousand Six Hundred Twenty-Four and 00/100 Dollars (US
$977,624.00), together with interest on the unpaid principal balance thereof, as
provided below.

2. Interest. The outstanding principal balance of this Note
shall bear interest at the prime rate charged by U.S. Bank of Washington, NA to
its major commercial customers from the date hereof until paid in full (the
"Interest Rate"). Interest shall be computed on a daily basis, and effect shall
be given to any change in such prime rate.

3. Payment. Maker shall pay the principal and interest and any
fees and costs required under, collectively, this Note and the Assumed Note, as
that term is defined in the Stock Purchase Agreement of even date , between
Holder as Seller and Maker as Purchaser, in installments as follows:

3.1 Interest Payments. Interest shall be payable quarterly,
with the first interest payment due on the last day of the calendar
quarter next following the first anniversary of this Note, and
continuing no later than the same day of each successive calendar
quarter until such time as all obligations due Holder hereunder have
been satisfied.

3.2 Principal Payment. Principal shall be payable quarterly,
each principal payment in an amount not less than One Hundred Thousand
and No/100 Dollars ($100,000.00),with the first payment due on the
last day of the calendar quarter next following the first anniversary
of this Note, and continuing no later than the same day of each
successive calendar quarter until such time as all obligations due
Holder hereunder have been satisfied.

3.3 Application of Payments. All payments shall be applied
first to any fees and costs due hereunder, then to accrued interest,
and finally to reduction of the then unpaid principal balance.

<PAGE> 27
4. Maker Covenants. So long any sums remain due and owing under
this Note, Maker shall not without the prior written consent of Holder:

4.1 Debt to Equity Minimum. Permit its ratio of debt to
equity at any time to exceed 2.00 to 1 [intangible assets and deferred taxes to
be deducted from equity, and shareholder loans to be excluded from debt, and if
postponed to Maker, to be included in equity].

4.2 Current Assets to Liabilities Minimum. Permit its
current assets to current liabilities to at any time reduce below 1.20 to 1.

4.3 Maintain Covenant Compliance. Allow itself to come into
noncompliance with and default under the covenants of this Section 4 as a result
of the paydown of other loans or a reduction in equity.

5. Default. If Maker defaults: (a) in the payment of any sum
when due hereunder and such default continues for a period of 14 days from the
date of Holder's written notice of default to Maker; (b) in its affirmative
covenants set forth in Section 4 hereof and such default continues for a period
of 30 days from the date of Holder's written notice of default to Maker; or (c)
if a default occurs under the terms of that certain Stock Pledge and Security
Agreement of even date ("Security Agreement"), between Maker and Holder, and
securing the indebtedness of Maker to Holder evidenced hereby, then, or any time
thereafter, at the option of Holder, without demand or notice, the outstanding
balance of this Note, together with all interest accrued thereon and all costs
and expenses due under this Note shall become immediately due and payable and
shall bear interest at the Interest Rate, plus five percent (5%) (the "Default
Rate"), until paid in full, and all liens given to secure the payment thereof,
including without limitation, all liens provided by and created under the
Security Agreement, may be immediately foreclosed. Failure to exercise this
option, or any other right Holder may in such event be entitled to, shall not
constitute a waiver of the right to exercise such option or any other right in
the event of any subsequent default.

6. Attorneys' Fees and Costs. If this Note is placed in the
hands of an attorney for collection, Maker promises to pay Holder's reasonable
attorneys' fees and all costs actually incurred in the collection process. Such
fees and costs shall become part of the indebtedness evidenced by this Note, and
shall bear interest at the Default Rate.

7. Prepayment. Maker may prepay all or any portion of the sums
due under this Note without notice or penalty.

8. Security. This Note is secured by a security interest in the
Stock, as that term is defined in the Stock Purchase Agreement ("Agreement") of
even date, between Holder and Maker, and the stock of any subsidiary of Maker
issued while any sums remain due and owing hereunder, all as evidenced by the
Security Agreement.

<PAGE> 28
9. Purpose. Maker represents and warrants to Holder that all
sums owing under this Note are solely intended for a business purpose, and not
for consumer or household purposes.

MAKER:

Gen-X Equipment, Inc

By: _____________________
Its:_____________________

<PAGE> 29
EXHIBIT 2.2C

PROMISSORY NOTE

US $ 1,022,376.00 October , 1996
Toronto, Ontario

1. Promise to Pay. FOR VALUE RECEIVED, the undersigned ("Maker"),
promises to pay to the order of Ride, Inc. ("Holder") at 8160 - 304th Avenue SE,
Preston, Washington, 98050 or at such other place as Holder may from time to
time designate in writing, the principal sum of US One Million Twenty-Two
Thousand Three Hundred Seventy-Six and 00/100 Dollars (US $1,022,376.00),
together with interest on the unpaid principal balance thereof, as provided
below.

2. Interest. The outstanding principal balance of this Note shall
bear interest at the prime rate charged by U.S. Bank of Washington, NA to its
major commercial customers from the date hereof until paid in full (the
"Interest Rate"). Interest shall be computed on a daily basis, and effect shall
be given to any change in such prime rate.

3. Payment. Maker shall pay the principal and interest and any fees
and costs required under, collectively, this Note and the Long Term Note, as
that term is defined in the Stock Purchase Agreement of even date , between
Holder as Seller and Maker as Purchaser, in installments as follows:

3.3 Application of Payments. All payments shall be applied
first to any fees and costs due hereunder, then to accrued interest,
and finally to reduction of the then unpaid principal balance.

<PAGE> 30
4. Maker Covenants. So long any sums remain due and owing under this
Note, Maker shall not without the prior written consent of Holder:

4.2 Current Assets to Liabilities Minimum. Permit its current
assets to current liabilities to at any time reduce below 1.20 to 1.

4.3 Maintain Covenant Compliance. Allow itself to come
into noncompliance with and default under the covenants of this Section 4 as a
result of the paydown of other loans or a reduction in equity.

5. Default. If Maker defaults: (a) in the payment of any sum when due
hereunder and such default continues for a period of 14 days from the date of
Holder's written notice of default to Maker; (b) in its affirmative covenants
set forth in Section 4 hereof and such default continues for a period of 30 days
from the date of Holder's written notice of default to Maker; or (c) if a
default occurs under the terms of that certain Stock Pledge and Security
Agreement of even date ("Security Agreement"), between Maker and Holder, and
securing the indebtedness of Maker to Holder evidenced hereby, then, or any time
thereafter, at the option of Holder, without demand or notice, the outstanding
balance of this Note, together with all interest accrued thereon and all costs
and expenses due under this Note shall become immediately due and payable and
shall bear interest at the Interest Rate, plus five percent (5%) (the "Default
Rate"), until paid in full, and all liens given to secure the payment thereof,
including without limitation, all liens provided by and created under the
Security Agreement, may be immediately foreclosed. Failure to exercise this
option, or any other right Holder may in such event be entitled to, shall not
constitute a waiver of the right to exercise such option or any other right in
the event of any subsequent default.

6. Attorneys' Fees and Costs. If this Note is placed in the hands of
an attorney for collection, Maker promises to pay Holder's reasonable attorneys'
fees and all costs actually incurred in the collection process. Such fees and
costs shall become part of the indebtedness evidenced by this Note, and shall
bear interest at the Default Rate.

7. Prepayment. Maker may prepay all or any portion of the sums due
under this Note without notice or penalty.

<PAGE> 31
9. Purpose. Maker represents and warrants to Holder that all
sums owing under this Note are solely intended for a business purpose, and not
for consumer or household purposes.

10. Liability. Maker hereby waives demand, presentment for payment,
protest and notice of protest and of nonpayment and agrees that any modification
or extension of the terms of payment made by Holder, with or without notice, at
the request of Maker or otherwise, or any release of all or any portion of the
security from the lien of Holder's security interest therein, shall not diminish
or impair Maker's liability for the payment of all amounts due hereunder.

12. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Washington, and venue for any
proceeding relating to this Note shall be in the federal and state courts
situated in King County, Washington.

MAKER:

Gen-X Equipment. Inc

By: ___________________________
Its:___________________________

<PAGE> 32
EXHIBIT 2.4A

NOTICE OF RESIGNATION

TO: THE BOARD OF DIRECTORS OF:

C.A.S. SPORTS INTERNATIONAL, INC.
C.A.S.SPORTS AGENCY, INC.

Robert E. Hall, G. Scott Stewart, Robert Marcovitch and David H. Davis, by his
respective signature hereto, hereby resigns as an officer and director of the
following corporations, effective as of the date hereof:

C.A.S. SPORTS INTERNATIONAL, INC.
C.A.S.SPORTS AGENCY, INC.

Dated as of _________, 1996

________________________
Robert E. Hall

________________________
G. Scott Stewart

________________________
Robert Marcovitch

________________________
David H. Davis

<PAGE> 33
EXHIBIT 2.4B

NOTICE OF RESIGNATION

TO: THE BOARD OF DIRECTORS OF:

RIDE, INC.

James J. Salter and Kenneth J. Finkelstein, by his respective signature hereto,
hereby resigns his respective position as an officer and director of RIDE, INC.
a Washington corporation, as applicable, effective as of the date hereof.

Dated as of _______, 1996

________________________
James J. Salter

________________________
Kenneth J. Finkelstein

<PAGE> 1
AMENDMENT NO.1 TO RESIGNATION AGREEMENT

THIS AMENDMENT is made and entered into as of October 11, 1996, by and between
Ride, Inc., a Washington corporation ("Ride"), and Kenneth J. Finkelstein, an
individual ("Finkelstein").

RECITALS

A. Ride and Finkelstein are parties to a Resignation Agreement, dated
August 2, 1996 (the "Agreement"). Ride and Finkelstein wish to reaffirm the
Agreement subject to the amendment of certain terms of the Agreement as set
forth in this Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the agreements set forth herein, the parties
agree as follows:

1. The date of "December 31, 1996" set forth in the first sentence of
Paragraph 1 of the Agreement is deleted and replaced with the date of "October
11,1996." Paragraph 2(b) of the Agreement is deleted in its entirety.

2. The second sentence of Paragraph 6 of the Agreement is deleted and
replaced with the following text:

Notwithstanding anything to the contrary in this Agreement and the
Employment Agreement, Finkelstein shall be permitted to engage in the Brokered
OEM Business and the Close-Out Business as the respective terms are defined in,
and to the extent specified in, that certain Stock Purchase Agreement of even
date, by and between Ride and Gen-X Equipment, Inc., a Washington corporation.

IN WITNESS WHEREOF, the parties execute this Amendment as of the date
first above written.

RIDE, INC.

By: /s/ Robert E. Hall By: /s/ Kenneth J. Finkelstein.
-------------------------------- ---------------------------
Robert E. Hall, CEO and President Kenneth J. Finkelstein

<PAGE> 1
AMENDMENT NO.1 TO RESIGNATION AGREEMENT

THIS AMENDMENT is made and entered into as of October 11, 1996, by and between
Ride, Inc., a Washington corporation ("Ride"), and James J. Salter, an
individual ("Salter").

RECITALS

A. Ride and Salter are parties to a Resignation Agreement, dated May 7,
1996 (the "Agreement"). Ride and Salter wish to reaffirm the Agreement subject
to the amendment of certain terms of the Agreement as set forth in this
Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the agreements set forth herein, the parties
agree as follows:

1. The date of "December 31, 1996" set forth in the first sentence of
Paragraph 2(a) of the Agreement is deleted and replaced with the date of
"October 11, 1996." Paragraph 2(b) of the Agreement is deleted in its entirety.

2. The second and third sentences of Paragraph 6 of the Agreement are
deleted and replaced with the following text:

Notwithstanding anything to the contrary in this Agreement and the
Employment Agreement, Salter shall be permitted to engage in the Brokered OEM
Business and the Close-Out Business as the respective terms are defined in, and
to the extent specified in, that certain Stock Purchase Agreement of even date,
by and between Ride and Gen-X Equipment, Inc., a Washington corporation.

IN WITNESS WHEREOF, the parties execute this Amendment as of the date
first above written.

RIDE, INC.

By: /s/ Robert E. Hall By: /s/ James J. Salter
--------------------------------- --------------------------------
Robert E. Hall, CEO and President James J. Salter