-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
KT4rM7hehfyp1XHCO08fCDF4BKrVFT8/PYopiDNGXfpO8dApnzpn/Y6smM8Lgjym
hSsTEqJyuI510Zx1CvEMKA==
U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission file number 0-32051
WESTSPHERE ASSET CORPORATION, INC.
(Exact name of small business issuer
as specified in its charter)
COLORADO |
98-0233968 |
1528-9th Ave S.E.
NOT APPLICABLE
(Former name, former address and former
fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X |
No__ |
State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:
29,564,640 shares of Common Stock, no par value, as of July 29, 2003.
Transitional Small Business Disclosure Format
(check one): Yes No X
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WESTSPHERE ASSET CORPORATION, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
|
Page |
Consolidated Financial Statements: |
|
Consolidated Balance Sheets |
F - 2 |
Consolidated Statements of Operations |
F - 3 to F - 4 |
Consolidated Statements of Cash Flows |
F - 5 |
Notes to Financial Statements |
F - 6 |
F-1
WESTSPHERE ASSET CORPORATION, INC. |
||||
|
|
June 30, |
|
December 31, |
CURRENT ASSETS |
|
|
|
|
Cash |
$ |
106,631 |
$ |
138,219 |
Accounts receivable net of $16,170 allowance for doubtful |
|
387,778 |
|
277,933 |
Accounts receivable - related parties |
|
38,988 |
|
30,990 |
Current portion of finance receivables |
|
8,436 |
|
7,209 |
Inventory |
|
203,006 |
|
235,165 |
Prepaid expense and deposit |
|
84,935 |
|
51,579 |
Current portion of mortgage receivable |
|
41,861 |
|
35,771 |
Total current assets |
|
871,635 |
|
776,866 |
|
|
|
|
|
Property and equipment, net |
|
275,526 |
|
269,284 |
Intellectual property |
|
116,077 |
|
100,082 |
Mortgage receivable |
|
256,637 |
|
246,803 |
Deferred site development costs |
|
10,424 |
|
10,180 |
Loans - related parties |
|
161,001 |
|
114,943 |
Finance receivables |
|
827 |
|
3,771 |
Future tax benefits |
|
29,442 |
|
25,159 |
Other investments |
|
164,554 |
|
164,024 |
|
|
|
|
|
Total assets |
$ |
1,886,123 |
$ |
1,711,112 |
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
$ |
364,353 |
$ |
618,079 |
Accounts payable, related parties |
|
134,071 |
|
48,490 |
Deposits payable |
|
275 |
|
647 |
Bank loan |
|
180,496 |
|
-- |
Total current liabilities |
|
679,195 |
|
667,216 |
|
|
|
|
|
Shareholder loans |
|
204,278 |
|
206,921 |
Convertible debentures |
|
107,589 |
|
91,937 |
Non-current lease obligation |
|
10,935 |
|
13,507 |
Total liabilities |
|
1,001,997 |
|
979,581 |
|
|
|
|
|
Minority interest in subsidiaries |
|
9,904 |
|
10,162 |
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
Common stock - authorized 75,000,000 shares, no par value; 29,564,640 shares issued and outstanding at |
|
1,285,154 |
|
1,250,256 |
Common stock warrants |
|
190,285 |
|
190,285 |
Accumulated other comprehensive income |
|
99,485 |
|
(28,335) |
Accumulated deficit |
|
(700,702) |
|
(690,837) |
Total stockholders' equity |
|
874,222 |
|
721,369 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
1,886,123 |
|
1,711,112 |
The accompanying notes are an integral part of these statements.
F-2
WESTSPHERE ASSET CORPORATION, INC. Consolidated Statements of Operations For the Three Months Ended June 30, 2003 and 2002 (Unaudited) |
||||
|
|
2003 |
|
2002 |
Revenue - |
|
|
|
|
Equipment and supplies |
$ |
199,283 |
$ |
347,865 |
Residual and interchange income |
|
468,671 |
|
297,945 |
Other |
|
38,001 |
|
27,769 |
Total revenue |
|
705,955 |
|
673,579 |
|
|
|
|
|
Cost of sales - |
|
|
|
|
Equipment and supplies |
|
148,038 |
|
267,112 |
Residual and interchange costs |
|
234,478 |
|
123,426 |
Commissions |
|
1,892 |
|
7,140 |
Other |
|
6,970 |
|
18,199 |
Total cost of sales |
|
391,378 |
|
415,877 |
|
|
|
|
|
Gross profit |
|
314,577 |
|
257,702 |
|
|
|
|
|
Administrative expenses - |
|
|
|
|
Depreciation and amortization |
|
9,841 |
|
24,740 |
Consulting fees |
16,498 |
18,344 |
||
Legal and accounting fees |
|
25,136 |
|
30,791 |
Salaries and benefits |
|
139,280 |
|
45,993 |
Travel, delivery and vehicle expenses |
|
32,859 |
|
33,236 |
Other |
|
58,904 |
|
87,889 |
Total administrative expenses |
|
282,518 |
|
240,993 |
|
|
|
|
|
Income from operations |
|
32,059 |
|
16,709 |
|
|
|
|
|
Other income - |
|
|
|
|
Interest income |
|
12,175 |
|
2,581 |
Interest expense |
|
(9,947) |
|
(5,485) |
Gain on asset sales |
|
-- |
|
-- |
|
|
|
|
|
Net income before income taxes |
|
34,287 |
|
13,805 |
|
|
|
|
|
Provision for income taxes |
|
(2,145) |
|
-- |
|
|
|
|
|
Net income |
$ |
32,142 |
$ |
13,805 |
|
|
|
|
|
Net income per common share |
$ |
nil |
$ |
nil |
|
|
|
|
|
Weighted number of shares outstanding |
|
29,564,640 |
|
21,592,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
Net income |
$ |
32,142 |
$ |
13,805 |
Foreign currency translation adjustment |
|
72,084 |
|
27,623 |
Total comprehensive income |
$ |
104,226 |
$ |
41,428 |
The accompanying notes are an integral part of these statements.
F-3
WESTSPHERE ASSET CORPORATION, INC. Consolidated Statements of Operations For the Six Months Ended June 30, 2003 and 2002 (Unaudited) |
||||
|
|
2003 |
|
2002 |
Revenue - |
|
|
|
|
Equipment and supplies |
$ |
399,880 |
$ |
497,044 |
Residual and interchange income |
|
835,137 |
|
575,251 |
Other |
|
66,657 |
|
43,662 |
Total revenue |
|
1,301,674 |
|
1,115,957 |
|
|
|
|
|
Cost of sales - |
|
|
|
|
Equipment and supplies |
|
326,211 |
|
432,678 |
Residual and interchange costs |
|
407,000 |
|
232,791 |
Commissions |
|
5,836 |
|
16,475 |
Other |
|
12,234 |
|
24,815 |
Total cost of sales |
|
751,281 |
|
706,759 |
|
|
|
|
|
Gross profit |
|
550,393 |
|
409,198 |
|
|
|
|
|
Administrative expenses - |
|
|
|
|
Depreciation and amortization |
|
18,830 |
|
50,032 |
Consulting fees |
86,676 |
61,682 |
||
Legal and accounting fees |
|
34,869 |
|
37,790 |
Salaries and benefits |
|
250,407 |
|
179,899 |
Travel, delivery and vehicle expenses |
|
62,212 |
|
69,625 |
Other |
|
129,171 |
|
149,481 |
Total administrative expenses |
|
582,165 |
|
548,509 |
|
|
|
|
|
(Loss) from operations |
|
(31,772) |
|
(139,311) |
|
|
|
|
|
Other income - |
|
|
|
|
Interest income |
|
16,429 |
|
51,698 |
Interest expense |
|
(21,375) |
|
(6,754) |
Gain on asset sales |
|
30,983 |
|
-- |
|
|
|
|
|
Net (loss) before income taxes |
|
(5,735) |
|
(94,367) |
|
|
|
|
|
Provision for income taxes |
|
(4,130) |
|
-- |
|
|
|
|
|
Net (loss) |
$ |
(9,865) |
$ |
(94,367) |
|
|
|
|
|
Net (loss) per common share |
$ |
nil |
$ |
nil |
|
|
|
|
|
Weighted number of shares outstanding |
|
29,190,953 |
|
21,164,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
Net (loss) |
$ |
(9,865) |
$ |
(94,367) |
Foreign currency translation adjustment |
|
127,820 |
|
25,921 |
Total comprehensive income (loss) |
$ |
117,955 |
$ |
(68,446) |
The accompanying notes are an integral part of these statements.
F-4
WESTSPHERE ASSET CORPORATION, INC. Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2003 and 2002 (Unaudited) |
||||
|
|
2003 |
|
2002 |
Cash flows from operating activities: |
|
|
|
|
Net (loss) from operations |
$ |
(9,865) |
$ |
(94,367) |
Reconciling adjustments - |
|
|
|
|
Common shares and warrants issued for expenses |
|
3,395 |
|
46,894 |
Depreciation and amortization |
|
18,830 |
|
50,043 |
Gain on sale of assets |
|
(30,983) |
|
-- |
Other non-cash transactions |
|
1,602 |
|
-- |
Changes in operating assets and liabilities |
|
|
|
|
Accounts receivable |
|
(75,366) |
|
(79,826) |
Inventory |
62,122 |
(40,224) |
||
Prepaid expenses and other |
|
(26,784) |
|
(113,546) |
Accounts payable and accrued liabilities |
|
(229,474) |
|
36,273 |
Net cash provided by (used for) operations |
|
(286,523) |
|
(194,753) |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchase of equipment |
|
(18,885) |
|
(123,316) |
Disposal of equipment |
|
18,643 |
|
161,872 |
Repayments of loans receivable |
|
20,080 |
|
-- |
Other investments |
|
(31,413) |
|
(86,411) |
Net cash (used for) investing activities |
|
(11,575) |
|
(47,855) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Issuance of debt |
|
185,529 |
|
181,044 |
Repayment of debt |
|
(5,033) |
|
-- |
Net cash provided by financing activities |
|
180,496 |
|
181,044 |
|
|
|
|
|
Foreign currency translation adjustment |
|
86,014 |
|
(4,649) |
Net change in cash and cash equivalents |
|
(31,588) |
|
(66,213) |
Cash and cash equivalents at beginning of period |
|
138,219 |
|
134,004 |
Cash and cash equivalents at end of period |
$ |
106,631 |
$ |
67,791 |
|
|
|
|
|
Supplemental schedule of cash flow information |
|
|
|
|
Interest paid in cash |
$ |
1,062 |
$ |
-- |
Income taxes paid in cash |
$ |
-- |
$ |
-- |
|
|
|
|
|
Supplemental schedule of noncash investing and financing activities |
|
|
|
|
Stock and options issued for investment in subsidiary |
$ |
-- |
$ |
66,258 |
|
|
|
|
|
The accompanying notes are an integral part of these statements.
F-5
WESTSPHERE ASSET CORPORATION, INC.
Note 1 - Financial Statements
The accompanying consolidated financial statements included herein have been prepared by Westsphere Asset Corporation, Inc. (the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-QSB. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and Westsphere Asset Corporation, Inc. believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the December 31, 2002 audited financial statements and the accompanying notes thereto contained in the Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. While management believes the procedures followed in preparing these financial statements are reasonable, the ac curacy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by Westsphere Asset Corporation, Inc. later in the year. The results of operations for the interim periods are not necessarily indicative of the results of operations for the full year. In management's opinion all adjustments necessary for a fair presentation of the Company's financial statements are reflected in the interim periods included.
Note 2 - Common Stock
During the six months ended June 30, 2003, the Company issued an additional 996,500 shares of its common stock at an average price of $0.035 for settlement of accrued interest and salaries.
Note 3 - Settlement of debt
During the six months ended June 30, 2003, the Company settled debt in the amount of $50,965 by exchanging a 5% interest in Trac POS Processing, Inc. This reduced the Company's holding in Trac POS Processing, Inc. to 31% of the outstanding shares of Trac POS Processing, Inc.
Note 4 - Bank loan
During May 2003, the Company's subsidiary, Westsphere Financial Group, Ltd. borrowed CAD$250,000 (US$185,000) from a bank. The loan bears interest at the bank's prime rate plus 2% (currently 6.75%). The loan is secured by the assets of the subsidiary, and is also guaranteed by the Company's subsidiary Vencash Capital Corporation and Douglas N. Mac Donald, President/CEO.
F-6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the three (3) month period of operations ended June 30, 2003, Westsphere and its subsidiaries generated net income of $32,142, while income from operations of $13,805 were realized for the same period from the previous year. The total revenue earned during the second quarter of year 2003 increased by approximately $32,376 to $705,955 from total revenue earned during the same period from the previous year of $673,579. This increased revenue was primarily due to an increase in residual and interchange income. Westsphere's gross margin has increased from 38% to 45%. The total cost of salaries and benefits also increased from the second quarter of year 2002 from $45,993 to a total of $139,280 during the second quarter of year 2003. The increase in salaries and benefits is due to the settlement of employee contracts totaling $39,270 in the second quarter of year 2002 and an addition to sales and marketing and service personnel to support the increase in total revenue. There was a decreas e in consulting fees from the second quarter of year 2002 from $18,344 to a total of $16,498 during the second quarter of year 2003, which is due to a decrease in equipment sales. Other expenses also decreased from the second quarter of year 2002 of $87,889 to $58,904 during the second quarter of year 2003, which was primarily due to a decrease in sales and marketing and office and administrative costs related to lower sales and placement in the market during the second quarter of year 2003 as compared to the second quarter of year 2002.
Westsphere and its subsidiaries currently generate sufficient cash flow to cover all of its consolidated operating expenses. During the three month period of operations ended June 30, 2003, Westsphere raised $185,000 from a bank to pay down its accounts payable. The loan is a demand loan with a maximum term of 48 months with monthly payments of $3,865.00, bears interest at prime plus two (2%) and is repayable at any time without penalty. The Company's President and CEO, Douglas N. MacDonald has provided his unlimited liability personal guarantee for the loan.
In order to grow Westsphere's businesses of ATM machines, Financing/Leasing and POS machines, Westsphere is dependent upon private placements, loans and/or joint venture arrangements. Westsphere's profit is expected to be generated by the surcharges collected from ATM machines, the sale of ATM machines, sale of POS machines and the collection of Finance/Lease charges.
Changes in Financial Position
During the three (3) month period ended June 30, 2003, Westsphere's total assets increased to $1,886,123 from $1,711,112 as at December 31, 2002. This increase is primarily due to the increase in accounts receivable, prepaid expenses and loan receivables. As of June 30, 2003, Westsphere's current liabilities totaled $679,195 and consisted of accounts payable of $364,353 to suppliers for the purchase of ATM machines and POS machines, accounts payable to related parties in the amount of $134,071, a bank loan in the amount of $180,496 and $275 due for deposits payable. Long-term liabilities as at June 30, 2003 consist of $107,589 in convertible debentures, $204,278 in shareholders loan and non-current lease obligations of $10,935.
Shareholders' equity as of June 30, 2003 was $874,222, inclusive of an accumulated loss from operations of $700,702, as compared to shareholders equity of $721,369 as of December 31, 2002. Total issued and outstanding share capital as of the year ended June 30, 2003 was 29,564,640 common shares as compared to a total of 28,568,140 common shares as of December 31, 2002.
REPORT OF MANAGEMENT'S RESPONSIBILITY
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.
2
There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.
Prior to the filing date of this quarterly report, the Company had not adopted a complete set of written policies, controls and procedures. The Company is now developing such written document and expects that in the process of such undertaking it will discover internal control policies and practices that the Company should implement and follow that are not part of its current practice.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
3
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WESTSPHERE ASSET CORPORATION, INC.
By: /s/ Douglas MacDonald
Name: Douglas MacDonald
Title: President
Date: August 14, 2003
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Kim Law
Name: Kim Law
Title: Principal Financial Officer and Accounting Officer
Date: August 14, 2003
4
SECTION 302 CERTIFICATIONS
I, Doug Mac Donald, certify that:
1. I have reviewed this quarterly report of Westsphere Asset Corporation, Inc. (the "Registrant").
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.
3. Based on my knowledge, the financial statement, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.
4. The Registrant's other certifying officer and I:
- are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant:
- we have designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the quarterly report is being prepared;
- we have evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
- we have presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and to the Registrant's board of directors:
- all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weakness in internal controls; and
- any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls.
6. The Registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: August 14, 2003 |
By: /s/ Douglas MacDonald Name: Douglas MacDonald Title: President (Principal Executive Officer) |
5
I, Kim Law, certify that:
1. I have reviewed this quarterly report of Westsphere Asset Corporation, Inc. (the "Registrant").
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.
3. Based on my knowledge, the financial statement, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.
4. The Registrant's other certifying officer and I:
- are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant:
- we have designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the quarterly report is being prepared;
- we have evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
- we have presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent function):
- all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weakness in internal controls; and
- any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls.
6. The Registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: August 14, 2003 |
By: /s/ Kim Law Name: Kim Law Title: Vice President (Principal Accounting Officer) |
6
CERTIFICATION PURSUANT TO
In connection with the Quarterly Report of Westsphere Asset Corporation, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Douglas MacDonald, President/CEO of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Douglas MacDonald
7
CERTIFICATION PURSUANT TO
In connection with the Quarterly Report of Westsphere Asset Corporation, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kim Law, Vice-President of Finance and CFO of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Kim Law
8
Exhibit Number |
Description |
Reference |
3.1(i) |
Articles of Incorporation filed and all amendments thereto filed with the Secretary of the State of Colorado July 21, 1998 |
* |
3(i)(a) |
By-Laws of Westsphere Asset Corporation, Inc. |
* |
3(i)(b) |
By-Laws of Vencash Capital Corporation |
* |
4 |
Specimen Stock Certificate |
* |
10.1 |
Agreement dated December, 1998 by and between Westsphere Asset Corporation, Inc. and 3 Ocean Investment Corporation |
* |
10.2 |
Share Exchange Agreement dated December 7, 1998 by and between Westsphere Asset Corporation, Inc. MacDonald Venture Corporation, Mr. Joseph Bowser and Mr. Robert L. Robins |
* |
10.3 |
Sample Conversion Agreement by and among Westsphere Asset Corporation, Inc. and various shareholders of Vencash Capital Corporation |
* |
10.4 |
ABS Processing Agreement dated October 28, 19988 by and between Vencash Capital Corporation and TNS Smart Network Inc. |
* |
10.5 |
Agreement dated June 24, 1999 by and between Vencash Capital Corporation and TCS (Canada) Limited |
* |
10.6 |
Sample Convertible Debenture issued by Westsphere Asset Corporation, Inc. in connection with the offering of $105,600 convertible debentures |
* |
10.7 |
Sample Loan Agreement and Promissory Note between Westsphere Asset Corporation, Inc. and various investors |
* |
10.8 |
Loan Agreement between Westsphere Asset Corporation, Inc. and the Canadian Western Bank |
Filed herewith |
* Previously filed as Exhibits for the Registrant's Annual Report on Form 10-KSB April 26, 2001
9
CANADIAN WESTERN BANK
THIS GENERAL SECURITY AGREEMENT DATED MAY 14, 2003
BRANCH ADDRESS: 6127 Barlow Trail SE., Calgary, AB. T2C 4W8
1. DEFINITIONS
The following definitions shall apply herein:
(a) "Act" means the Personal Property Security Act of the Province of Alberta in effect on the date hereof;
(b) "Accessions", "Account", "Chattel Paper", "Consumer Goods", "Document of Title", "Equipment", "Financing Change Statement", "Financing Statement", "Goods", "Instrument", "Intangible", "Inventory", "Money", "Purchase Money Security Interest" and "Security" shall have the meanings ascribed to them in the Act and shall be deemed to include both the singular and plural of such terms. All other capitalized words or terms used herein, unless otherwise defined herein, shall have the meanings ascribed to them in the Act and the Regulations passed pursuant thereto:
(c) "Agreement", "herein", and similar expressions refer to the whole of this Security Agreement and not to any particular section or other portion thereof and extend to and include every instrument which amends or supplements this Agreement;
(d) "Bank" means CANADIAN WESTERN BANK;
(e) "Collateral" means all present and after-acquired personal property and Real Property of the Debtor of whatever kind and wherever situate, including, without limiting the generality of the foregoing, those specific items, if any, described on the attached Schedule "A", together with all documents, writings, papers, books of account and records relating to the foregoing and all rights and interests therein, but shall not include:
(f) "Debtor" means Vencash Capital Corporation:
(g). "Default" means the happening of anyone or more of the events or conditions described in section 7 and such term shall be deemed to include each, any, or all such events or conditions, whether any such event is voluntary or involuntary or is effected by operation of law or pursuant to or in compliance with any judgement, decree or order of any Court or any order, rule or regulation of any administrative or governmental body;
(h) "Indebtedness" means and includes any and all obligations, indebtedness and liability of the Debtor to the Bank, (including but not limited to principal, interest and all costs on a full indemnity basis) present or future, direct or indirect, absolute or contingent, matured or not, extended or renewed, wherever and however incurred, together with any ultimate unpaid balance thereof, whether the same is from time to time reduced and thereafter increased or entirely extinguished and thereafter incurred again, and whether the Debtor is bound alone or with another or others and whether as principal or surety:
(i) "Permitted Encumbrances" means those specific security interests, if any, whether by way of mortgage, lien, claim, charge or otherwise, listed on Schedule "A" or hereafter approved in writing by the Bank prior to their creation or assumption:
(j) "Proceeds" shall have the meaning ascribed to it in the Act and shall be interpreted to include bank accounts, cash, trade-ins, Equipment, notes, Chattel Paper, Goods, contractual rights, Accounts and any other personal property or obligation received when Collateral or Proceeds thereof are sold, exchanged, collected or otherwise disposed of;
(k) "Real Property" means all of the Debtor's right, title and interest in and to all its presently owned or held and after acquired or held real, immovable and leasehold property and all interests therein, and all easements, right-of-way, privileges, benefits, licenses, improvements and rights whether connected therewith or appurtenant thereto or separately owned or held, including all structures, plant and other fixtures;
(l) "Receiver" means anyone or more persons (whether officers of the Bank or not), firms or corporations appointed pursuant to subsection 9(f) and shall be deemed to include a receiver, manager, receiver-manager, or receiver and manager;
(m) "Security Interest" means the security interest and the floating charge granted by the Debtor to the Bank pursuant to this Agreement; and
(n) "Specifically Described Collateral" means those items, if any, described in Schedule "A" which comprise part of the Collateral.
2. GRANT OF SECURITY INTEREST
For value received (the receipt and sufficiency of which is hereby acknowledged):
a. the Debtor hereby grants, assigns, conveys, mortgages, pledges and charges, as and by way of a specific mortgage, pledge and charge and grants a continuing Security Interest to and in favor of the Bank in the Collateral (other than Real Property); and
b. the Debtor hereby charges the Real Property as and by way of a floating charge.
3. INDEBTEDNESS SECURED
The Security Interest secures payment and satisfaction of the Indebtedness; provided however, that if the Security Interest in the Collateral is not sufficient to satisfy the Indebtedness of the Debtor in full, the Debtor agrees that the Debtor shall continue to be liable for any Indebtedness remaining outstanding and the Bank shall be entitled to pursue full payment and satisfaction thereof.
4. ATTACHMENT OF SECURITY INTEREST
The Security Interest shall attach to the Collateral at the earliest possible moment in accordance with the Act, there being no intention on the part of the Debtor and the Bank that it attach at any later time.
5. REPRESENTATIONS AND WARRANTIES OF THE DEBTOR
The Debtor represents and warrants, and a long as this Agreement remains in effect shall be deemed to continuously represent and warrant, that:
6. COVENANTS OF THE DEBTOR
The Debtor covenants:
a. to defend the Collateral against the claims and demands of all other parties claiming the same or an interest therein and to keep the Collateral free from all security interests except for the Security Interest and the Permitted Encumbrances:
b. except as expressly permitted herein, not to sell, exchange, transfer, assign, destroy, lease or otherwise dispose of the Collateral or any interest therein without the prior written consent of the Bank;
c. except as expressly permitted herein, not to move the Collateral from its current location, as indicated on Schedule "C", without the prior written consent of the Bank;
d. to assemble and deliver the Collateral to the Bank at such location as the Bank may direct;
e. to notify the Bank promptly in writing of:
f. to keep all of its property, including the Collateral, in good order, condition and repair and not to use the, Collateral in violation of the provisions of this Agreement or any other agreement relating to the Collateral or any policy insuring the Collateral or any applicable statute, law, by-law, rule, regulation or ordinance having jurisdiction over the same;
g. to execute, acknowledge and deliver such further agreements and documents supplemental hereto (including financing statements, further schedules to this Agreement, assignments and transfers) and to do all acts, matters and things as may be requested by the Bank in order to give effect to this Agreement and to perfect the Security Interest, including but not limited to any of the same which may be required to correct or amplify the description of any Collateral or for any other purpose not inconsistent with the terms of this Agreement;
h. to pay all costs and expenses on a full indemnity basis (including legal fees as between a solicitor and his own client) incidental to:
i. to punctually pay and discharge all taxes, rates, levies, assessments and other charges of every nature which might result in any lien, encumbrance, right of distress, forfeiture or termination or sale, or any other remedy being enforced against the Collateral and to provide to the Bank satisfactory evidence of such payment and discharge;
j. to maintain its corporate existence, and to diligently preserve all its rights, licenses, powers, privileges, franchises and goodwill;
k. to observe and perform all of its obligations and comply with all conditions under leases, licenses and other agreements to which it is a party or pursuant to which any of the Collateral is held;
l. to carry on and conduct its business in an efficient and proper manner so as to preserve and protect the Collateral and income therefrom;
m. to keep, in accordance with generally accepted accounting principles consistently applied, proper books of account and records of all transaction in relation to its business and the Collateral;
n. to observe and conform to all valid requirements of law and of any governmental or municipal authority relating to the Collateral or the carrying on by the Debtor of its business;
o. . at all reasonable times, to allow the Bank access to its premises in order to view the state and condition of its property and to inspect its books and records and make extracts therefrom;
p. to insure the Collateral for such periods, in such amounts, on such terms, with such insurers and against such loss or damage by fire and other such risks as the Bank reasonably directs, with loss payable to the Bank and the Debtor as insureds, as their respective interests may appear, to pay all premiums therefor, to deliver evidence of the same on request, and to do all acts necessary to obtain payment to the Bank of any insurance proceeds;
q. to prevent the Collateral from being or becoming an Accession or a fixture to other property not covered by this Agreement or other security granted by the Debtor in favor of the Bank;
r. to deliver to the Bank from time to time promptly upon request:
i. any Documents of Title, Instruments, Securities and Chattel Paper constituting the Collateral,
ii. all books of account and all records, ledgers, reports, correspondence, schedules, documents, statements, lists and other writings relating to the Collateral,
iii. all financial statements prepared by or for the Debtor regarding its business, or, where the Debtor is an individual, all tax returns and such personal financial statements as the Bank may request,
iv. all policies and certificates of insurance relating to the Collateral, and
v. such further information concerning the Collateral, the Debtor and the Debtor's business and affairs as the Bank may request;
s. not to change the present use of the Collateral; and
t. to comply with all other requirements of the Bank, whether in the nature of positive or negative covenants, as may be communicated by the Bank to the Debtor from time to time, including but not limited to those additional covenants, terms and conditions, if any, contained on the attached Schedule "D".
7. EVENTS OF DEFAULT
The following constitute Default:
{a) non-payment when due, whether by acceleration or otherwise, of any principal or interest forming part of the Indebtedness;
{b) failure of the Debtor to perform or observe any obligation, covenant, term, provision or condition contained in this Agreement or any other agreement, security instrument or other document made by the Debtor with or in favor of the Bank or any other person, firm or corporation;
{c) the death of or declaration of incompetency by a Court of competent jurisdiction with respect to the Debtor, if an individual;
{d) the Debtor becomes insolvent or makes a voluntary assignment or proposal in bankruptcy or otherwise acknowledges its insolvency, a bankruptcy petition is filed or presented against the Debtor, the making of an authorized assignment for the benefit of the creditors of the Debtor, the appointment of a receiver, reveiver-manager, receiver and manager or trustee for the Debtor or any assets of the Debtor, or the institution by or against the Debtor of any other type of insolvency proceeding under the Bankruptcy and Insolvency Act, Companies Creditors Arrangement Act or similar legislation in any jurisdiction;
{e) any act, matter or thing being done toward, or the commencement of any action or proceeding for, terminating the corporate existence of the Debtor, or if the Debtor is a partnership, the existence of the partnership, whether by way of winding-up, surrender of charter or otherwise;
{f) any encumbrance or security interest affecting the Collateral becomes enforceable;
{g) the Debtor ceases or threatens to cease to carry on its business or makes or proposes to make a bulk sale of its assets or any sale of the Collateral other than as expressly permitted herein;
{h) any execution or other process of any Court becomes enforceable against the Debtor or a distress or analogous process is levied upon the assets of the Debtor or any part thereof {whether or not forming part of the Collateral);
{i) the Debtor permits any amount which has been admitted as due by it or is not disputed to be due by it and which forms, or is capable of being made, a charge upon the Collateral in priority to, or pari passu with, the charge created by this Agreement to remain unpaid for 30 days after proceedings have been taken to enforce the same;
G) the Debtor allows any amount outstanding from it to the Crown pursuant to any federal or provincial statute to remain unpaid for 30 days or more;
{k) a corporate dispute occurs within the Debtor, if a corporation, {whether between or among its shareholders, directors, officers, employees or otherwise) which may hamper the business operations of the Debtor or otherwise adversely affect, in the sole opinion of the Bank, the Debtor's business assets or the Collateral;
{I) any representation or warranty furnished by or on behalf of the Debtor pursuant to or in connection with this Agreement {regardless of the form thereof or whether contained herein or elsewhere), whether as an inducement to the Bank to extend any credit to or to enter into this or any other agreement with the Debtor or otherwise proves to have been false or misleading as of the day made in any material respect or to have omitted any substantial contingent or unliquidated liability or claim against the Debtor;
{m) there is any material adverse change in any of the facts disclosed to the Bank, in the Debtor's position {financial or otherwise), or in the nature and value of the Collateral; or
(n) the Bank considers or deems, in its sole opinion, that the Security Interest and the Collateral are not sufficient security In relation to the extent of the Indebtedness.
For the purposes of Section 198.1 of the Land Title Act (British Columbia), the floating charge created by this Security Agreement over Real Property shall become a fixed charge thereon upon the earlier of:
(a) the occurrence of an event described in clause 7(d), (e), (f), (g), or (h); or
(b) the Bank taking any action pursuant to clause 9 to enforce and realize on the Security Interests created by this Security Agreement.
8. ACCELERATION
In the event of Default the Bank, in its sole discretion, may declare all or any part of the Indebtedness which is not by its terms payable on demand to be immediately due and payable, without demand or notice of any kind. The provisions of this clause shall not in any way affect any rights of the Bank with respect to any Indebtedness which may now or hereafter be payable on demand.
9. REMEDIES
Upon Default the Bank shall have the following rights and powers, which the Bank may exercise immediately:
(a) to enter upon the premises of the Debtor or any other premises where the Collateral may be situated and to take possession of all or any part of the Collateral, by any method permitted by law, to the exclusion of all others, including the Debtor, its directors, officers, agents and employees, and the Debtor hereby waives and releases the Bank and any Receiver from all claims in connection therewith or arising therefrom;
(b) to remove all or any part of the Collateral to such place as the Bank deems advisable;
I
(c) to preserve and maintain the Collateral and to do all such acts incidental thereto as the Bank considers advisable, including but not limited to making replacements and additions to the Collateral;(d) to collect, demand, sue on, enforce, recover and receive Collateral and give receipts and discharges therefor, and may do any such act and take any proceedings related thereto in the name of the Debtor or otherwise as the Bank considers appropriate;
(e) to sell, lease, or otherwise dispose of the Collateral in such manner, at such time or times and place or places, for such consideration and upon such terms and conditions as the Bank deems reasonable (including without ; limitation, by deferred payment) all in the Bank's absolute discretion and without the concurrence of the Debtor; provided however, that the Bank shall not be required to do so and it shall be lawful for the Bank to use and posses the Collateral for any and all purposes and in any manner the Bank sees fit, all without hindrance or interruption by the Debtor or any other person or persons, provided however that none of the foregoing shall prejudice the Bank's right to pursue the Debtor for recovery in full of the amount of the Indebtedness, including the amount of any deficiency owing after the application of the proceeds of realization (and to the extent permitted by laws, the Debtor waives its rights to the protection afforded by any rule of law or legislation respecting such defici ency);
(f) to appoint by instrument in writing, with or without bond, or by application to any Court of competent jurisdiction, a Receiver of the Collateral and to remove any Receiver so appointed and appoint another or others in his stead. Any such Receiver shall, so far as concerns responsibility for his acts, be deemed the agent of the Debtor and not of the Bank and the Bank shall not be in any way responsible for any misconduct, negligence or non-feasance on the part of any such Receiver, his agents, servants or employees. Subject to the provisions of t the instrument appointing him, any such Receiver shall have the power to take possession of the Collateral, to preserve the Collateral or its value, to carry on or concur in carrying on all or any part of the business of the Debtor and to sell, lease or otherwise dispose of or concur in selling, leasing or otherwise disposing of the Collateral (including disposition by way of deferred payment). To facilitate the foregoing powers, any such Receiver may, to the exclusion of all others including the Debtor, enter upon, use and occupy all. premises owned or occupied by the Debtor where Collateral may be situate, to employ and discharge such employees, agents or professional advisors as the Receiver deems advisable, to enter into such compromises, arrangements or settlements as the Receiver deems advisable, to borrow or otherwise raise money on the security of the Collateral and to issue Receiver's certificates and do all such other acts as the Receiver deems advisable in connection with any of the powers referred to herein. Except as may be otherwise directed by the Bank, all monies received from time to time by the Receiver in carrying out his appointment shall be received in trust for and paid over to the Bank. In addition, every Receiver may, in the discretion of the Bank, be vested with all or any of the rights and powers of the Bank under the Act or any other applicable legislation or under this Agreement or any other agreement;
g. to rescind or vary any contract for sale, lease or other disposition that the Debtor or the Bank may have entered into and to resell, release or redispose of the Collateral;
h. to deliver to any purchasers of the Collateral good and sufficient conveyances or deeds for the same free and clear of any claim by the Debtor. For such purposes, the purchaser or lessee receiving any disposition of the Collateral need not inquire whether Default under this Agreement has actually occurred but mayas to this and all other matters rely upon a statutory declaration of an officer of the Bank, which declaration shall be conclusive evidence as between the Debtor and such purchaser or lessee, and any such disposition shall not be affected by any irregularity of any nature or kind relating to the enforcement of this Agreement or the exercise of the rights and remedies of the Bank;
i. to exercise any of the powers and rights given to a Receiver pursuant to this Agreement;
j. to provide written notice to the Debtor that all the powers, functions, rights and privileges of the directors and officers of the Debtor with respect to the Collateral, business and undertaking of the Debtor have or shall cease as of the date notified therein, except to the extent specifically continued at any time by the Bank in writing; and
k. to take the benefit of or to exercise any other right, proceeding or remedy authorized or permitted at law or in equity, whether as a secured party pursuant to the Act as the same is in force from time to time or otherwise.
All rights and remedies of the Bank are cumulative and may be exercised at any time and from time to time independently or in combination. No delay or omission by the Bank in exercising any right or remedy shall operate as a waiver thereof or of any other right or remedy, and no singular partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. Provided always that the Bank shall not be liable or accountable for any failure to exercise its remedies, take possession of, collect, enforce, realize, sell, maintain, lease or otherwise dispose of the Collateral, or to institute any proceedings for such purposes. The Bank shall have no obligation to take any steps to preserve rights against other parties, shall have no obligation to exercise any of the rights and remedies available to it on Default and shall not be liable or accountable for not exercising any such rights and remedies.
The Bank may waive any Default but no such waiver shall be effective unless made in writing and signed by an authorized officer of the Bank. Any such waiver shall not extend to, or be taken in any manner whatsoever to affect, any subsequent Default or the rights resulting therefrom.
By its acceptance of this Agreement, the Bank acknowledges that it shall not, except in the case of the bankruptcy of the Debtor, enforce this Security Agreement against any personal property of the Debtor used solely for the personal or household use and enjoyment of the Debtor or the Debtor's immediate family.
BANK MAY REMEDY DEFAULT
The Bank shall have the right, but shall not be obliged to, remedy any default of the Debtor and all sums thereby .expended by the Bank shall be payable immediately by the Debtor, together with interest thereon at the highest rate of interest then chargeable by the Bank to the Debtor on any portion of the Indebtedness. All such sums shall be added to the Indebtedness and shall be secured by this Agreement. In no case shall the exercise of the Bank's rights pursuant to this Section 10 be deemed to relieve the Debtor from such Default or be deemed a waiver of such Default or of any other prior or subsequent Default.
11. USE OF COLLATERAL
Subject to compliance with the Debtor's covenants contained herein and to the following provisions of this Section 11, until Default the Debtor may:
Notwithstanding the foregoing:
If the Collateral at any time includes Securities, the Debtor authorizes the Bank to transfer the same or any part thereof into its own name or that of its nominees so that the Bank or its nominees may appear on record as the sole owner thereof; provided however that until Default the Bank shall deliver to the Debtor all notices or other communications received by it or its nominees as registered owner and upon demand and receipt of payment of any necessary expenses shall issue to the Debtor or its order a proxy to vote and take all action with respect to such Securities. However, after Default the Debtor waives all rights to receive any notices or communications in respect of such Securities and agrees that no proxy issued by the Bank to the Debtor or its order as aforesaid shall thereafter be effective.
12. APPROPRIATION OF PAYMENTS
All payments made at any time in respect of the Indebtedness and all Proceeds realized from any Securities held therefor may be applied (and reapplied from time to time notwithstanding any previous application) in such manner as the Bank sees fit or, at the option of the Bank, may be held unappropriated in a collateral account or released to the Debtor all without prejudice to the rights of the Bank hereunder, including the Bank's right to collect from the Debtor the amount of any deficiency remaining after application of all such payments and Proceeds.
13. POWER OF ATTORNEY AND AUTHORIZATION TO FILE
The Debtor hereby authorizes the Bank to file such Financing Statements and other documents and do such acts, matters and things (including completing and adding schedules to this Agreement indentifying Collateral or location) as the Bank from time to time deems appropriate to perfect, continue and realize upon the Security Interest and to protect and preserve the Collateral. In addition, for valuable consideration, the Debtor hereby irrevocably appoints the Bank and its officers from time to time, or anyone or more of them, to be the true and lawful attorney of the Debtor, with full power of substitution, in the name of and on behalf of the Debtor to execute and to do all , deeds, transfers, conveyances, assignments, assurances, and other things which the Debtor ought to execute and do under the covenants and provisions contained in this Agreement and generally to use the name of the Debtor in the exercise of all or any of the rights, remedies and powers of the Bank.
14. MISCELLANEOUS
15. NOTICE
In addition to the notice provisions contained in the Act, whenever the Debtor or the Bank is required or entitled to notify or direct the other or to make a demand or request upon the other, such notice, direction, demand or request shall be in writing and shall be sufficiently given only if delivered, transmitted by facsimile, or sent by prepaid registered mail addressed to the party for whom it is intended at the Branch Address, in the case of the bank, and at the Debtor Address, in the case of the Debtor, as set out herein or as changed pursuant hereto. Either party may notify the other of any change in such party's address to be used for the purposes hereof. All such communications shall, in the case of delivery or facsimile, be deemed received on the date of delivery and, if mailed as aforesaid, shall be deemed received on the third business day following the date of posting. In the case of a disruption in postal service all such communications shall be delivered or transmitted by facsimile.
16. INTERPRETATION
17. RECEIPT OF DOCUMENTS
IN WITNESS WHEREOF the Debtor has executed this Agreement as of the day and or first above written.
Vencash Capital Corporation |
|
Per: /s/ Douglas N. Mac Donald (Seal) if applicable |
|
Per: /s/ Kim Law (Seal) if applicable |
|
AUTHORIZED SIGNATORY(S) |
|
IF DEBTOR IS AN INDIVIDUAL |
|
_____________________ Witness |
Name of Individual: |
_____________________ Witness |
Name of Individual: |
DEBTOR ADDRESS: (Chief Executive Office, if Corporation, or residence if Individual) 3, 3620 -29th St. NE Calgary , AB T1Y 528 |
|
Facsimile: |
|
If Debtor is an individual: State full given names and surname, in order, with surname last. _________________________________________________ |
|
Indicate Date of Birth (Day, Month, Year):___________________M [ ] F [ ] |
SCHEDULE "A"
1. SPECIFICALLY DESCRIBED COLLATERAL
(a) Serial Number Goods
Make. Model. Year of Manufacture. Serial Number
(b) Other
2. PURCHASE MONEY SECURITY INTERESTS
3. PERMITTED ENCUMBRANCES
SCHEDULE "B"
PERSONAL PROPERTY NOT INCLUDED IN COLLATERAL
SCHEDULE "C"
3, 3620 - 29th Street N.E.
Calgary, Ab
T1Y 5Z8
1528 - 9th Ave. SE
Calgary, AB
T2G 0T7
SCHEDULE "D"
ADDITIONAL COVENANTS, TERMS AND CONDITIONS
Dated: May 14,2003
FROM:
Vencash Capital Corporation
TO: CANADIAN WESTERN BANK
________________________________________
GENERAL SECURITY AGREEMENT
________________________________________________
CANADIAN WESTERN BANK
FULL LIABILITY GUARANTEE
For value received the undersigned ("Guarantor") hereby guarantees to CANADIAN WESTERN BANK ("Bank") payment, forthwith after demand made therefor as hereinafter provided, of all indebtedness and liability (present and future, direct or indirect, absolute or contingent, matured or not) of Westsphere Financial Group Ltd. ("Customer") to the Bank whether arising from agreement or dealings between the Bank and the Customer or from agreement or dealings between the Bank and any third person by which the Customer now is or hereafter may become indebted or liable to the Bank or however otherwise arising and whether the Customer be bound alone or with another or others and whether as principal or surety or guarantor; and the Guarantor further agrees that:
GIVEN under seal at Calgary, Alberta this14th. day of May, 2003 .
(corporate seal(s) if corporate guarantor(s))
VENCASH CAPITAL CORPORATION |
|
_________________________________ Witness: |
/s/ Doug N. Mac Donald Doug N. Mac Donald, President & CEO |
________________________________ Witness: |
/s/ Kim Law Kim Law, VP Finance |
CANADIAN WESTERN' BANK
Office: 6127 Barlow Trail SE., Calgary Date: May 23, 2003
DD/MM/YY
DEMAND NOTE
FOR VALUE RECEIVED the undersigned, jointly and severally if more than one, promise(s) to pay to or to the order of CANADIAN WESTERN BANK ("Bank") at the above office of the Bank:
ON DEMAND the principal sum of ( $250.000.00 ) -Two Hundred and Fifty Thousand xx/OO Dollars;
AND WITHOUT DEMAND, interest at a variable rate per annum (both before and after maturity, default and judgment) equal to the rate established by the Bank from time to time as the Bank's prime lending rate for Canadian Dollar Loans ("Prime Rate") plus 2.00% per cent on the outstanding balance of the principal sum owing from time to time. Interest shall be calculated daily and compounded and payable monthly. Overdue interest shall bear interest at the same variable rate.
The interest rate payable hereunder shall vary automatically without, notice to any interested party hereto, on each occasion on which the Bank's Prime Rate is varied. The Bank's Prime Rate as of the date hereof is 5.00% per cent per annum and the interest rate payable hereunder as of the date,hereof is 7.00% per cent per annum.
Westsphere Financial Group Ltd. |
|
/s/ Douglas N. Mac Donald, President/CEO |
|
Bank Officer's Initials |
/s/ Kim Law, VP of Finance/CFO |
CONSENT OF THE SHAREHOLDERS OF
VENCASH CAPITAL CORPORATION (THE "CORPORATION")
WHEREAS
Westsphere Financial Group Ltd. (the "Borrower") has applied to Canadian Western Bank (the "Bank") for a credit facility in the principal sum of TWO HUNDRED & FIFTY THOUSAND DOLLARS ($250,000) pursuant to the terms of a demand credit facility to the Borrower by the Bank, to be secured, inter alia, by a Full Liability Guarantee, to be granted the Corporation to and in favour of the Bank (the "Guarantee");WHEREAS the Corporation has agreed to guarantee the obligations of the Borrower to the Bank and grant the Guarantee to the Bank in respect thereto;
WHEREAS section 45 of the Business Corporations Act (Alberta) provides that the Corporation is not required to disclose to its shareholders financial assistance that it gives to any person if all of the shareholders have consented to giving the financial assistance;
WHEREAS the entering into of the Guarantee constitutes financial assistance to an affiliate of a shareholder of the Corporation; and
WHEREAS the shareholders of the Corporation have agreed to consent to the giving of the financial assistance by the Corporation pursuant to the Guarantee.
NOW THEREFORE BE IT RESOLVED:
Westsphere Assets Corporation, Inc.
Per: /s/ D. Mac Donald
D. Mac Donald, President & CEO