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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: September 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.
Telephone (403) 290-0264
(Issuer's telephone number)
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 October 28, 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
September 30, 2003
|
Page |
Consolidated Financial Statements: |
|
Consolidated Balance Sheets |
F - 1 |
Consolidated Statements of Operations |
F - 2 to F - 3 |
Consolidated Statements of Cash Flows |
F - 4 |
Notes to Financial Statements |
F - 5 |
2
WESTSPHERE ASSET CORPORATION, INC. |
||||
|
|
September 30, |
|
December 31, |
CURRENT ASSETS |
|
|
|
|
Cash |
$ |
103,033 |
$ |
138,219 |
Accounts receivable net of $17,560 allowance for doubtful accounts at September 30, 2003 and $16,806 at December 31, 2002 |
|
142,052 |
|
277,933 |
Accounts receivable - related parties |
|
183,061 |
|
30,990 |
Current portion of finance receivables |
|
7,398 |
|
7,209 |
Inventory |
|
141,709 |
|
235,165 |
Prepaid expense and deposit |
|
38,870 |
|
51,579 |
Current portion of mortgage receivable |
|
41,673 |
|
35,771 |
Total current assets |
|
657,796 |
|
776,866 |
|
|
|
|
|
Property and equipment, net |
|
294,634 |
|
269,284 |
Intellectual property |
|
115,035 |
|
100,082 |
Mortgage receivable |
|
239,205 |
|
246,803 |
Deferred site development costs |
|
9,636 |
|
10,180 |
Loans - related parties |
|
166,516 |
|
114,943 |
Finance receivables |
|
-- |
|
3,771 |
Future tax benefits |
|
29,309 |
|
25,159 |
Other investments |
|
165,119 |
|
164,024 |
|
|
|
|
|
Total assets |
$ |
1,677,250 |
$ |
1,711,112 |
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
$ |
124,898 |
$ |
618,079 |
Accounts payable, related parties |
|
234,523 |
|
48,490 |
Deposits payable |
|
274 |
|
647 |
Bank loan |
|
165,321 |
|
-- |
Total current liabilities |
|
525,016 |
|
667,216 |
|
|
|
|
|
Shareholder loans |
|
244,858 |
|
206,921 |
Convertible debentures |
|
107,104 |
|
91,937 |
Non-current lease obligation |
|
8,947 |
|
13,507 |
Total liabilities |
|
885,925 |
|
979,581 |
|
|
|
|
|
Minority interest in subsidiaries |
|
9,377 |
|
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 |
|
1,289,799 |
|
1,250,256 |
Common stock warrants |
|
190,285 |
|
190,285 |
Accumulated other comprehensive income |
|
96,810 |
|
(28,335) |
Accumulated deficit |
|
(794,946) |
|
(690,837) |
Total stockholders' equity |
|
781,948 |
|
721,369 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
1,677,250 |
|
1,711,112 |
The accompanying notes are an integral part of these statements.
F-1
WESTSPHERE ASSET CORPORATION, INC. |
||||
|
|
2003 |
|
2002 |
Revenue - |
|
|
|
|
Equipment and supplies |
$ |
118,472 |
$ |
408,459 |
Residual and interchange income |
|
533,795 |
|
334,039 |
Other |
|
27,758 |
|
43,438 |
Total revenue |
|
680,025 |
|
785,936 |
|
|
|
|
|
Cost of sales - |
|
|
|
|
Equipment and supplies |
|
144,004 |
|
350,020 |
Residual and interchange costs |
|
277,509 |
|
148,936 |
Commissions |
|
2,643 |
|
22,175 |
Other |
|
15,879 |
|
11,331 |
Total cost of sales |
|
440,035 |
|
532,462 |
|
|
|
|
|
Gross profit |
|
239,990 |
|
253,474 |
|
|
|
|
|
Administrative expenses - |
|
|
|
|
Depreciation and amortization |
|
12,102 |
|
5,778 |
Consulting fees |
27,889 |
3,588 |
||
Legal and accounting fees |
|
6,559 |
|
12,353 |
Salaries and benefits |
|
158,714 |
|
98,044 |
Travel, delivery and vehicle expenses |
|
43,240 |
|
39,942 |
Other |
|
82,363 |
|
53,127 |
Total administrative expenses |
|
330,867 |
|
212,832 |
|
|
|
|
|
Income (loss) from operations |
|
(90,877) |
|
40,624 |
|
|
|
|
|
Other income - |
|
|
|
|
Interest income |
|
5,228 |
|
3,788 |
Interest expense |
|
(12,944) |
|
(6,333) |
Gain on asset sales |
|
-- |
|
-- |
|
|
|
|
|
Net income (loss) before income taxes |
|
(98,593) |
|
38,097 |
|
|
|
|
|
Provision for income taxes |
|
4,349 |
|
-- |
|
|
|
|
|
Net income (loss) |
$ |
(94,244) |
$ |
38,097 |
|
|
|
|
|
Net income per common share |
$ |
nil |
$ |
nil |
|
|
|
|
|
Weighted number of shares outstanding |
|
29,564,640 |
|
20,834,696 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
Net income (loss) |
$ |
(94,244) |
$ |
38,097 |
Foreign currency translation adjustment |
|
(2,675) |
|
(26,162) |
Total comprehensive income |
$ |
(96,919) |
$ |
11,935 |
The accompanying notes are an integral part of these statements.
F-2
WESTSPHERE ASSET CORPORATION, INC. |
||||
|
|
2003 |
|
2002 |
Revenue - |
|
|
|
|
Equipment and supplies |
$ |
518,352 |
$ |
905,503 |
Residual and interchange income |
|
1,368,932 |
|
909,290 |
Other |
|
94,415 |
|
115,549 |
Total revenue |
|
1,981,699 |
|
1,930,342 |
|
|
|
|
|
Cost of sales - |
|
|
|
|
Equipment and supplies |
|
470,215 |
|
782,697 |
Residual and interchange costs |
|
684,509 |
|
381,726 |
Commissions |
|
8,479 |
|
38,650 |
Other |
|
28,113 |
|
36,146 |
Total cost of sales |
|
1,191,316 |
|
1,239,219 |
|
|
|
|
|
Gross profit |
|
790,383 |
|
691,123 |
|
|
|
|
|
Administrative expenses - |
|
|
|
|
Depreciation and amortization |
|
30,932 |
|
55,809 |
Consulting fees |
114,565 |
65,270 |
||
Legal and accounting fees |
|
41,428 |
|
50,142 |
Salaries and benefits |
|
409,121 |
|
277,942 |
Travel, delivery and vehicle expenses |
|
105,452 |
|
109,568 |
Other |
|
211,315 |
|
202,610 |
Total administrative expenses |
|
912,813 |
|
761,341 |
|
|
|
|
|
(Loss) from operations |
|
(122,430) |
|
(70,218) |
|
|
|
|
|
Other income - |
|
|
|
|
Interest income |
|
21,657 |
|
27,037 |
Interest expense |
|
(34,319) |
|
(13,087) |
Gain on asset sales |
|
30,983 |
|
-- |
|
|
|
|
|
Net (loss) before income taxes |
|
(104,109) |
|
(56,268) |
|
|
|
|
|
Provision for income taxes |
|
-- |
|
-- |
|
|
|
|
|
Net (loss) |
$ |
(104,109) |
$ |
(56,268) |
|
|
|
|
|
Net (loss) per common share |
$ |
nil |
$ |
nil |
|
|
|
|
|
Weighted number of shares outstanding |
|
28,966,740 |
|
21,164,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
Net (loss) |
$ |
(104,109) |
$ |
(56,268) |
Foreign currency translation adjustment |
|
125,145 |
|
(188) |
Total comprehensive income (loss) |
$ |
21,036 |
$ |
(56,456) |
The accompanying notes are an integral part of these statements.
F-3
WESTSPHERE ASSET CORPORATION, INC. |
||||
|
|
2003 |
|
2002 |
Cash flows from operating activities: |
|
|
|
|
Net (loss) from operations |
$ |
(104,109) |
$ |
(56,268) |
Reconciling adjustments - |
|
|
|
|
Common shares and warrants issued for expenses |
|
4,645 |
|
46,894 |
Depreciation and amortization |
|
30,932 |
|
61,522 |
Gain on sale of assets |
|
(30,983) |
|
-- |
Other non-cash transactions |
|
694 |
|
-- |
Changes in operating assets and liabilities |
|
|
|
|
Accounts receivable |
|
7,554 |
|
(60,380) |
Inventory |
132,251 |
(43,299) |
||
Prepaid expenses and other |
|
21,218 |
|
(75,010) |
Accounts payable and accrued liabilities |
|
(389,242) |
|
(29,465) |
Net cash provided by (used for) operations |
|
(327,040) |
|
(156,006) |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchase of equipment |
|
(62,104) |
|
(130,908) |
Disposal of equipment |
|
26,826 |
|
174,290 |
Collection on loans receivable |
|
48,311 |
|
-- |
Other investments |
|
5,927 |
|
(73,193) |
Net cash provided by (used for) investing activities |
|
18,960 |
|
(29,811) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Issuance of debt |
|
235,318 |
|
181,522 |
Repayment of debt |
|
(15,175) |
|
-- |
Net cash provided by financing activities |
|
220,143 |
|
181,522 |
|
|
|
|
|
Foreign currency translation adjustment |
|
52,751 |
|
33,434 |
Net change in cash and cash equivalents |
|
(35,186) |
|
(29,139) |
Cash and cash equivalents at beginning of period |
|
138,219 |
|
134,004 |
Cash and cash equivalents at end of period |
$ |
103,033 |
$ |
163,143 |
|
|
|
|
|
Supplemental schedule of cash flow information |
|
|
|
|
Interest paid in cash |
$ |
2,798 |
$ |
-- |
Income taxes paid in cash |
$ |
-- |
$ |
-- |
|
|
|
|
|
Supplemental schedule of noncash investing and financing activities |
|
|
|
|
Stock and options issued for investment in subsidiary |
$ |
-- |
$ |
66,258 |
Debt repaid by issuing stock |
$ |
-- |
$ |
188,089 |
The accompanying notes are an integral part of these statements.
F-4
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 nine months ended September 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 nine months ended September 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-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
During the three (3) month period of operations ended September 30, 2003, Westsphere and its subsidiaries generated a net loss from operations of $90,877, while net income from operations of $40,624 were realized for the same period from the previous year. The total revenue earned during the third quarter of year 2003 decreased by $105,911 to $680,025 from total revenue earned during the same period from the previous year of $785,936. This decrease in revenue was primarily due to an a significant drop in sales of equipment and supplies, partially offset by an increase in residual and interchange income. The drop in sales of equipment and supplies was due to the introduction of a new program, Rent-to-Own, whereby Westsphere's subsidiary Vencash collects monthly rent payments plus applicable taxes. The increase in residual and interchange income was due to the discovery program which was introduced in the latter part of the year 2002 and partially from sales during the year. Westsphere's gro ss margin has increased from 32% to 35%. Westsphere's total administrative expenses for the third quarter of 2003 increased to $330,867 from $212,836 from the previous year. Most of such increase was caused by an increase in total cost of salaries and benefits from $98,044 to a total of $158,714. The increase in salaries and benefits is due to hiring additional sales and marketing staffs to promote new marketing programs and additional administrative staffs to handle the increase in volume of transactions and paperwork There was also an increase in consulting fees from the third quarter of year 2002 from $3,588 to a total of $27,889 during the third quarter of year 2003, which was due to new management contracts to officers of the company. Other expenses also increased from the third quarter of year 2002 of $53,127 to $82,363 during the third quarter of year 2003, which was primarily due to promotion materials and increase in travel expenses to promote new programs.
Results of Operations - Nine Month Period
During the nine (9) month period ended September 30, 2003, Westsphere and its subsidiaries generated a net loss from operations of $104,109, while net loss from operations of $56,268 were realized for the same period from the previous year. The total revenue earned for the nine (9) month period of year 2003 increased by $51,357 to $1,981,699 from total revenue earned during the same period from the previous year of $1,930,342. This increase in revenue was primarily due to a drop in sales of equipment and supplies, partially offset by an increase in residual and interchange income. The increase in residual and interchange income mainly came from the results of the discovery program which was introduced at the end of year 2002. The decrease in sales of equipment and supplies was due to a slow down in sales during the first six (6) month period and the new marketing program - Rent-To-Own which was introduced in the third quarter, whereby Westsphere's subsidiary Vencash collects monthl y rent payments plus applicable taxes. Westsphere's gross margin has increased from 36% to 40%. Westsphere's total administrative expenses for the nine (9) month period of year 2003 increased to $912,813 from $761,341 from the previous year. This increase was mainly caused by an increase in total cost of salaries and benefits from $277,942 to $409,121. The increase in salaries and benefits is due to the hiring of additional sales and marketing staff to promote new marketing programs, and additional administrative staff to handle the increase in the volume of transactions and paperwork. There was also an increase in consulting fees from $65,270 for the nine (9) month period of the year 2002 to $114,565 during the nine (9) month period of year 2003, which is due to new management contracts to officer of the company commencing April 1, 2003. Other expenses also increased from $202,610 for the nine (9) month period of year 2002 to $211,315 for the nine (9) month period of year 2003, which was primarily due to pr omotional materials and travel expenses to promote new programs.
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 September 30, 2003, Westsphere's subsidiary Vencash raised $36,668 by way of a demand loan from an existing shareholder of Westsphere, with interest accruing at the rate of 15% per annum on the outstanding balance. The purpose of the loan was to cover a Vencash short term payable.
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.
3
Changes in Financial Position
During the nine (9) month period ended September 30, 2003, Westsphere's total assets decreased to $1,677,250 from $1,711,112 as at December 31, 2002. This decrease is primarily due to decrease in inventory on hand. As of September 30, 2003, Westsphere's current liabilities totaled $525,016 and consisted of accounts payable of $124,898 to suppliers for the purchase of ATM machines and POS machines, accounts payable to related parties in the amount of $234,523, a bank loan in the amount of $165,321 and $274 due for deposits payable. Long-term liabilities as at September 30, 2003 consist of $107,104 in convertible debentures, $244,858 in shareholders loan and non-current lease obligations of $8,947.
Shareholders' equity as of September 30, 2003 was $781,948, inclusive of an accumulated loss from operations of $794,946, as compared to shareholders equity of $721,369 as of December 31, 2002. Total issued and outstanding share capital as of the period ended September 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, 2003.
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
On April 1, 2003, Westsphere entered into a written agreement with Douglas MacDonald to continue to serve as Westsphere's President and Chief Executive Officer for two years. Pursuant to the terms of this agreement, Mr. MacDonald will be paid $13,187 per year, payable in twelve equal monthly installments. Mr. McDonald will receive additional compensation under Westsphere's Executive Compensation/Bonus Plan. Mr. MacDonald will also receives full medical, dental and health benefits paid by Westsphere and an expense account.
4
Mr. MacDonald and his corporation, MacDonald & Associates Gaming Specialists Inc. also entered into agreements with Westsphere's subsidiaries, Westsphere Financial Ltd. and Vencash Capital Corporation, to provide Mr. MacDonald's services of Chief Executive Officer to such subsidiaries for two years. Vencash Capital Corporation will pay Mr. MacDonald's corporation $32,967 per year in twelve equal installments, along with an expense account and participation in the Vencash Executive Compensation/Bonus Plan. Westsphere Financial Ltd. will pay Mr. MacDonald's corporation $28,571 per year in twelve equal monthly installments, an expense account, participation in Westsphere Financial Ltd's Executive Compensation/Bonus Plan and $110 per month in an office accommodation and reimbursement for telephone, facsimile and internet services supplied to Westsphere Financial Ltd. by Mr. MacDonald's corporation. Westsphere Financial Ltd. will also provide Mr. MacDonald a vehicle allowance of $0.33 per k ilometer, full medical, dental and health benefits and a living accommodation while working in the Calgary area in an amount mutually acceptable to all parties.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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
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
6
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 |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
3(i)(a) |
By-Laws of Westsphere Asset Corporation, Inc. |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
3(i)(b) |
By-Laws of Vencash Capital Corporation |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
4 |
Specimen Stock Certificate |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.1 |
Agreement dated December, 1998 by and between Westsphere Asset Corporation, Inc. and 3 Ocean Investment Corporation |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
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 |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.3 |
Sample Conversion Agreement by and among Westsphere Asset Corporation, Inc. and various shareholders of Vencash Capital Corporation |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.4 |
ABS Processing Agreement dated October 28, 19988 by and between Vencash Capital Corporation and TNS Smart Network Inc. |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.5 |
Agreement dated June 24, 1999 by and between Vencash Capital Corporation and TCS (Canada) Limited |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.6 |
Sample Convertible Debenture issued by Westsphere Asset Corporation, Inc. in connection with the offering of $105,600 convertible debentures |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.7 |
Sample Loan Agreement and Promissory Note between Westsphere Asset Corporation, Inc. and various investors |
Incorporated by reference to the Exhibits filed with the Registrant's Annual Report on Form 10-KSB for the period ended December 31, 2000 |
10.8 |
Loan Agreement between Westsphere Asset Corporation, Inc. and the Canadian Western Bank |
Incorporated by reference to the Exhibits filed with the Registrant's quarterly Report on Form 10-QSB for the period ended June 30, 2003 |
10.9 |
Agreement dated April 1, 2003 between Douglas MacDonald and Westsphere Asset Corporation |
Filed herewith |
10.10 |
Agreement dated April 1, 2003 between Vencash Capital Corporation, Douglas MacDonald and MacDonald & Associates Gaming Specialists Inc. |
Filed herewith |
10.11 |
Agreement dated April 1, 2003 between Westsphere Financial Group Ltd., Douglas MacDonald and MacDonald & Associates Gaming Specialists Inc. |
Filed herewith |
31. |
S302 Certifications |
Filed herewith |
32. |
Certification pursuant to 18USC Section 1350, as adapted pursuant to Section 906 of the Sarbones-Oxley Act of 2002 |
Filed herewith |
7 to 8
THIS AGREEMENT is effective as of the 1st day of April 2003
BETWEEN:
WESTSPHERE ASSET CORPORATION, INC.,
a body corporate under the laws of the State of Colorado
(hereinafter referred to as "Westsphere")
OF THE FIRST PART
and
DOUGLAS N. MAC DONALD,
a businessman residing in St. Albert, Alberta
(hereinafter referred to as "Mac Donald")
OF THE SECOND PART
WHEREAS:
A. Westsphere conducts its business operations as a holding company providing administrative and operational support to its wholly owned subsidiaries and joint venture business operations as well as supplying "financial services and packages" such as lease funding, equity based secured loans and venture capital to its business operations. Westsphere's shares are listed for trading on the OTC BB under the symbol: WSHA.
B. Mac Donald is a businessman engaged in supplying consulting, management, promotional and development services for several Corporations ("Clients") whereby he provides administrative and operational support to its clients and/or their wholly owned subsidiaries and joint venture business operations.
C. Westsphere wishes to retain Mac Donald to direct the development and management of Westsphere pursuant to the terms of this agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each, the parties hereto covenant and agree each with the other as follows:
ARTICLE 1
TERM
1.1 The term of this agreement shall be for a two (2) year period commencing on the first day of April, 2003 and ending on the thirty-first day of April, 2005.
1.2 Provided Westsphere is not in default under this agreement, the agreement will automatically renew for a further one (1) year term, and will successively renew for further one (1) year terms, unless or until Westsphere or Mac Donald shall, at least thirty (30) days prior to the last day of the then current term, deliver written notice to the other party of non-renewal, in which case this agreement shall terminate on the last day of the then current term.
Page Two
Agreement
Westsphere Asset Corporation, Inc. - Douglas N. Mac Donald
1.3 Mac Donald agrees to the cancellation of all other agreements previously entered into between Westsphere and Mac Donald or related to Mac Donald's role with Mac Donald & Associates Gaming Specialists Inc. with the understanding and commitment that notwithstanding when notice is delivered of non renewal or termination of this agreement between the first two parties, Westsphere agrees that M&A Gaming and Mac Donald shall receive from Westsphere a minimum of nine (9) months severance package. The severance package is to include;
i) continued full payment of contracted monthly payments including salaries, bonuses due for the period, and other enumeration for services rendered by M&A Gaming or Mac Donald to Westsphere as set out in this agreement,
ii)continued full payment for contracted expense allowance as covered in this agreement,
iii) the option of a buy out of any supplied equipment utilized personally by Mac Donald including but not limited to any personal p.c. computer systems, vehicles, or any other personal use items or equipment, at full depreciated value supplied by Westsphere,
iv) full medical, life insurance, dental and health benefits existing at the time of non-renewal or termination which will continue fully paid by Westsphere for a minimum of twelve (12) months from the termination date of this Agreement.
ARTICLE 2
RESPONSIBILITIES OF MAC DONALD
2.1 Douglas Norman Mac Donald will act as the President and Chief Executive Officer of Westsphere whose duties will to initiate, direct, organize, co-ordinate, promote, oversee and manage Westsphere's business operations pursuant to the terms of this agreement.
2.2 Mac Donald will direct and be responsible for the due diligence, organization, and promotion, of Westsphere, in addition to the purchase and development of businesses and properties of interest to Westsphere at the direction of the Board of Directors of Westsphere, and in doing so carry out his responsibilities pursuant to the terms and conditions of this Agreement.
2.3 Mac Donald shall provide the following services for the benefit of Westsphere, at the direction of the Board of Directors of Westsphere;
(a) negotiations of contracts pertaining to the purchase and distribution of certain products, equipment, services, properties, and businesses required for the development of all aspects of the business of Westsphere;
(b) provide liaison with the agents of the owners of property and businesses of interest to Westsphere, or its' auditors, accountants and lawyers,
(c) co-ordinate and arrange for the development and submission of proposals, marketing plans, and development plans, from start up phase to completion and implementation;
(d) negotiation and concluding acquisitions on behalf of ;
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Agreement
Westsphere Asset Corporation, Inc. - Douglas N. Mac Donald
(e) ensure the reporting responsibilities and deadlines pertaining to all United States Securities and Exchange Commission filings are met and maintained in order to ensure that Westsphere's shares are listed for trading on the OTC BB under the symbol: WSHA.,
(f) co-ordinate and arrange for the promotion of Westsphere shares for the benefit of all Westsphere shareholders,
(g) any other related services which is requested by the Board of Directors of Westsphere .
2.4 Mac Donald agrees that it shall, during the continuance of this agreement to provide his services to the business of Westsphere for and in the best interest of Westsphere.
2.5 It is acknowledged, agreed and understood by Westsphere that Mac Donald supplies management and consulting services to other related and non-related Corporations through various capacities originating from his involvement with Mac Donald & Associates Gaming Specialists Inc. Westsphere is aware that Mac Donald now does and will continue to provide management services to other companies and Westsphere recognizes that these companies will require a certain portion of the time of Mac Donald. Westsphere agrees that Mac Donald may continue to provide such services to outside interests, provided that such interests do not conflict with their duties under this agreement.
2.6 Mac Donald acknowledges and agrees that he shall not, and shall insure that he does not, except as authorized or required hereunder, reveal or divulge to any person or companies any of the trade secrets, secret or confidential operations, processes or dealings or any information concerning the organization, business, finances, transactions or other affairs of Westsphere or of their subsidiaries which may come to the knowledge of Mac Donald during the term of this agreement and shall keep in complete secrecy all confidential information entrusted to them and shall not use or attempt to use any such information in any manner which may injure or cause loss either directly or indirectly to the business of Vencash, or may be likely so to do. This restriction shall cease to apply to information or knowledge which may come into the public domain through no fault of Mac Donald.
ARTICLE 3
COMPENSATION
3.1 As compensation for the services rendered and provided by Mac Donald to Westsphere pursuant to this Agreement during the Term, Westsphere shall pay to Mac Donald, tax paid, the sum of eighteen thousand ($18,000.00) dollars per year, payable in 12 equally monthly installments of one thousand five hundred ($1,500.00) per month plus commencing on the date of this agreement.
3.2 Incorporated with and in addition to the compensation outlined in the aforementioned Article 3.1 is an Executive Compensation/Bonus Plan as set out in appendix #1 attached to and forming a part of this agreement, commencing on April 1, 2003 and continuing during the effective dates of this agreement.
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Agreement
Westsphere Asset Corporation, Inc. - Douglas N. Mac Donald
3.3 Incorporated with and in addition to the compensation outlined in the aforementioned Article 3.1 and Article 3.2 and appendix #1 is a pre authorized expense allowance to reimburse Mac Donald, for all expenses incurred, by Mac Donald on behalf of Westsphere during the effective dates of this agreement.
3.4 Commencing April 1, 2003, a full medical, dental and health benefits program will be supplied to Mac Donald for full participation of all of Mac Donald immediate family members residing at the family residence of 45 Sheraton Drive, St. Albert, Alberta. Premiums pertaining to Mac Donald's participation in the benefits program will continue fully paid by Westsphere until the original termination date of this Agreement or period of severance package term whichever is greater. Benefits related payment will be made in addition to the compensation payments as set out in articles 3.1 and 3.2.
3.5 Commencing March 1, 2002, any charges incurred from purchases made through the use of any Westsphere or Westsphere subsidiary issued credit cards supplied to Mac Donald will be credited as payment of compensation directly to Mac Donald as payment received by Mac Donald. Copies of credit card statements outlining the transactions totaling the amount debited from the next monthly installment will be forwarded to Mac Donald upon receipt.
ARTICLE 4
GOVERNING LAW
4.1 The laws of the Province of Alberta, shall govern this Agreement and all matters arising thereunder.
ARTICLE 5
ASSIGNMENT
5.1 This agreement may be assigned by either party only with the written consent of the other party hereto.
ARTICLE 6
ENUREMENT
6.1 The provisions of this Agreement shall enure to the benefit of and are binding upon the parties hereto together with their respective personal representatives, successors and assigns.
ARTICLE 7
SIGNING BY COUNTERPART
7.1 This Agreement may be signed by the parties hereto in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original, and such counterparts together shall constitute on and the same instrument and notwithstanding the date of the execution will be deemed to bear the date as set forth above.
Page Five
Agreement
Westsphere Asset Corporation, Inc. - Douglas N. Mac Donald
IN WITNESS WHEROF the parties hereto have duly executed this agreement to take effect as of the 1st day of March, AD 2002. Upon the execution of this document, this agreement shall replace and cancel all other agreements between the parties, and more particularly an agreement between Westsphere, M&A Gaming, and Mac Donald dated the 1st day of March 2002.
/s/ Dr. L.R.Queen
Dr. L. R. Queen, Director and member of
Westsphere Asset Corporation, Inc. Compensation Committee
/s/ M. B. Reuscher
M. B. Reuscher, Director and member of
Westsphere Asset Corporation, Inc. Compensation Committee
Accepted by:
/s/ Douglas N. Mac Donald
Douglas N. Mac Donald
Page Six
Agreement
Westsphere Asset Corporation, Inc. - Mac Donald & Associates Gaming Specialists, Inc
APPENDIX #1
EXECUTIVE COMPENSATION/BONUS PLAN
Westsphere Asset Corporation, Inc. - Mac Donald & Associates Gaming Specialists Inc.
Westsphere has initiated an Officer and Director Compensation and Bonus Plan (the "Plan") for participation by the following Officer and Directors of Westsphere Asset Corporation, Inc.
Douglas N. Mac Donald, Director, President and CEO
Robert L. Robins, Director, Vice President
Dr. L. Roy Queen, Director
M. Bernd Reuscher, Director
Kim Law, Director, Vice President and CFO
Sonia Goeseels, Vice President, Administration
Awards under the Plan will be issued on a quarterly basis based on a formula as set out in the Compensation and Bonus Plan. Westsphere shall pay to Mac Donald forty (40%) percent of the total award amount for performance in his capacity as the President and CEO of Westsphere, and shall participate in a pro-rata manner with the other Directors and Officers for his duties as a Westsphere Director in regards to the distribution of the outstanding Plan award balance.
/s/ Dr. L. R. Queen
Authorized signatory,
Dr. L. R. Queen, Director, and member of
Westsphere Asset Corporation, Inc. Compensation Committee
/s/ M. Bernd Reuscher
Authorized signatory,
M. Bernd Reuscher, Director, and member of
Westsphere Asset Corporation, Inc. Compensation Committee
THIS AGREEMENT is effective as of the 1st day of April 2003
BETWEEN:
VENCASH CAPITAL CORPORATION
a body corporate under the laws of the Province of Alberta
(hereinafter referred to as "Vencash")
OF THE FIRST PART
and
MAC DONALD & ASSOCIATES GAMING SPECIALISTS INC.,
a body corporate under the laws of the Province of Alberta
(hereinafter referred to as "Mac Donald & Associates")
OF THE SECOND PART
and
DOUGLAS N. MAC DONALD,
a businessman residing in St. Albert, Alberta
(hereinafter referred to as "Mac Donald")
OF THE THIRD PART
WHEREAS:
A. Vencash conducts its business as a distributor, reseller, deployer, and service organization related to the sales and management of ATM equipment across Canada and acts as a processor of fee generated revenues produced from transaction surcharges. .
B. Mac Donald & Associates were originally brought together to service the specialty business field associated with the Gaming (licensed and regulated gambling) Industry in Canada and throughout North America. Mac Donald & Associates business has evolved to incorporate the corporate management and governance field.
C. Mac Donald & Associates is an association of independent management and consulting specialists, which specializes in the field of forensic evaluation, due diligence investigations, corporate audit investigations and corporate re-structuring and where Mac Donald & Associates is engaged in the business of supplying consulting, management, promotional and development services for several Corporations ("Clients") whereby it provides administrative and operational support to its clients and/or their wholly owned subsidiaries and joint venture business operations.
D. Mac Donald & Associates has retained the services of Douglas Norman Mac Donald in order to assist Mac Donald & Associates in meeting its' responsibilities to Vencash pursuant to the terms of this agreement . Vencash wishes to retain Mac Donald & Associates to supply the services of Douglas Norman Mac Donald to act as the Chief Executive Officer of Vencash in order to initiate, direct, organize, co-ordinate, promote, oversee and manage the administration responsibilities of Vencash and assist the President and Chief Operating Officer of Vencash in his management, development and growth of Vencash's business operations.
Page Two
Agreement
Vencash Capital Corporation. - Mac Donald & Associates Gaming Specialists, Inc.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each, the parties hereto covenant and agree each with the other as follows:
ARTICLE 1
TERM
1.1 The term of this agreement shall be for a two (2) year period commencing on the first day of April, 2003 and ending on the thirty-first day of March, 2005.
1.2 Provided Vencash is not in default under this agreement, the agreement will automatically renew for a further one (1) year term, and will successively renew for further one (1) year terms, unless or until Vencash or Mac Donald & Associates shall, at least sixty (60) days prior to the last day of the then current term, deliver written notice to the other party of non-renewal, in which case this agreement shall terminate on the last day of the then current term.
1.3 Mac Donald & Associates and Mac Donald agree to the cancellation of all other agreements previously entered into between Vencash and Mac Donald & Associates and Mac Donald with the understanding and commitment that notwithstanding when notice is delivered of non renewal or termination of this agreement between the first two parties, Vencash agrees that Mac Donald & Associates and Mac Donald shall receive from Vencash a minimum of nine (9) months severance package. The severance package is to include;
i) continued full payment of contracted monthly payments including salaries, bonuses due for the period, and other enumeration for services rendered by Mac Donald & Associates or Mac Donald to Vencash as set out in this agreement,
ii) continued full payment for contracted expense allowance as covered in this agreement,
iii) the option of a buy out of any supplied equipment utilized personally by Mac Donald including but not limited to any personal p.c. computer systems, vehicles, or any other personal use items or equipment, at full depreciated value supplied by Vencash,
iv) full medical, life insurance, dental and health benefits existing at the time of non-renewal or termination which will continue fully paid by Vencash for a minimum of twelve (12) months from the termination date of this Agreement.
ARTICLE 2
RESPONSIBILITIES OF MAC DONALD & ASSOCIATESAND MAC DONALD
2.1 Mac Donald & Associates will supply the services of Douglas Norman Mac Donald to act as the Chief Executive Officer of Vencash whose duties will be to initiate, direct, organize, co-ordinate, promote, oversee and manage the administration responsibilities of Vencash and assist the President and Chief Operating Officer of Vencash pursuant to the terms of this agreement.
Page Three
Agreement
Vencash Capital Corporation. - Mac Donald & Associates Gaming Specialists, Inc.
2.2 With the written approval of the Board of Directors of Vencash Mac Donald & Associates can supply a suitable and agreed upon replacement for Mac Donald to fill the role of the Chief Executive Officer, if for some reason Mac Donald cannot continue in the role of Chief Executive Officer.
2.3 Mac Donald will direct and be responsible for the due diligence, organization, and promotion, of Vencash, and will be responsible to initiate, direct, organize, co-ordinate, promote, oversee and manage the administration responsibilities of Vencash and assist the President and Chief Operating Officer of Vencash, and in doing so carry out the responsibilities Mac Donald & Associates and Mac Donald, pursuant to the terms and conditions of this Agreement.
2.4 Mac Donald shall provide the following services for the benefit of Vencash, at the direction of the Board of Directors of Vencash;
(a) to co-ordinate and assist in negotiations of contracts pertaining to the purchase and distribution of certain products, equipment, services, properties, and businesses required for the development of all aspects of the business of Vencash, its wholly owned subsidiaries and joint venture business operations,
(b) provide liaison with the agents of the owners of property and businesses of interest to Vencash, its wholly owned subsidiaries and joint venture business operations or their auditors, accountants and lawyers,
(c) co-ordinate, oversee and manage the administration responsibilities of Vencash,
(d) negotiation and concluding acquisitions on behalf of Vencash and/or subsidiaries or joint venture operations in which Vencash is a party,
(e) ensure the reporting responsibilities and deadlines pertaining to all United States Securities and Exchange Commission filings are met and maintained in order to ensure that Westsphere Asset Corporation, Inc's (Vencash's sole shareholder) are listed for trading on the OTC BB under the symbol: WSHA.,
(f) any other related services which is requested by the Board of Directors of Vencash
2.5 Mac Donald & Associates and Mac Donald agree that it shall, during the continuance of this agreement to provide its service to the business of Vencash and/or subsidiaries or joint venture operations in which Vencash is a party and in the best interest of Vencash.
2.6 It acknowledged, agreed and understood by Vencash, Mac Donald & Associates and Mac Donald supply similar management and consulting services to other related and non-related Corporations. Vencash is aware that Mac Donald & Associates and Mac Donald now, and will continue to, provide management service to other companies and Vencash recognizes that these companies will require a certain portion of the time of Mac Donald & Associates and Mac Donald.
Page Four
Agreement
Vencash Capital Corporation. - Mac Donald & Associates Gaming Specialists, Inc.
Vencash agrees that Mac Donald & Associates may continue to provide such services to outside interests, provided that such interests do not conflict with their duties under this agreement.
2.7 Mac Donald & Associates and Mac Donald shall not, and shall insure that it does not, except as authorized or required hereunder, reveal or divulge to any person or companies any of the trade secrets, secret or confidential operations, processes or dealings or any information concerning the organization, business, finances, transactions or other affairs of Vencash or of their subsidiaries which may come to the knowledge of Mac Donald & Associates and Mac Donald during the term of this agreement and shall keep in complete secrecy all confidential information entrusted to them and shall not use or attempt to use any such information in any manner which may injure or cause loss either directly or indirectly to the business of Vencash, or may be likely so to do. This restriction shall cease to apply to information or knowledge which may come into the public domain through no fault of Mac Donald & Associates.
ARTICLE 3
COMPENSATION
3.1 As compensation for the services rendered and provided by Mac Donald & Associates and Mac Donald to Vencash pursuant to this Agreement during the Term, Vencash shall pay to M&A Gaming, the sum of forty-five ($45,000.00) dollars per year plus applicable GST, payable in 12 equally monthly installments of three thousand seven hundred and fifty ($3,750.00) per month plus applicable GST commencing on the date of this agreement.
3.2 Incorporated with and in addition to the compensation outlined in the aforementioned Article 3.1 is an Executive Compensation/Bonus Plan which will be set out as an appendix to this agreement and will be attached to and form a part of this agreement, commencing on April 1, 2002 and continuing during the effective dates of this agreement.
3.3 Incorporated with and in addition to the compensation outlined in the aforementioned Article 3.1 and Article 3.2 and appendix #1 is a pre authorized expense allowance to reimburse M&A, for all expenses incurred, by Mac Donald & Associates and Mac Donald on behalf of Vencash during the effective dates of this agreement.
3.4 Commencing April 1, 2002, any charges incurred from purchases made through the use of any Vencash or Vencash subsidiary issued credit cards supplied to Mac Donald & Associates and/or Mac Donald will be credited as payment of compensation directly to Mac Donald & Associates as payment received by M&A Gaming. Copies of credit card statements outlining the transactions totaling the amount debited from the next monthly installment will be forwarded to Mac Donald & Associates upon receipt.
ARTICLE 4
GOVERNING LAW
4.1 The laws of the Province of Alberta, shall govern this Agreement and all matters arising thereunder.
Page Five
Agreement
Vencash Capital Corporation - Mac Donald & Associates Gaming Specialists, Inc.
ARTICLE 5
ASSIGNMENT
5.1 This agreement may be assigned by either party only with the written consent of the other party hereto.
ARTICLE 6
ENUREMENT
6.1 The provisions of this Agreement shall enure to the benefit of and are binding upon the parties hereto together with their respective personal representatives, successors and assigns.
ARTICLE 7
SIGNING BY COUNTERPART
7.1 This Agreement may be signed by the parties hereto in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original, and such counterparts together shall constitute on and the same instrument and notwithstanding the date of the execution will be deemed to bear the date as set forth above.
IN WITNESS WHEROF the parties hereto have duly executed this agreement to take effect as of the 1st day of March, AD 2003. Upon the execution of this document, this agreement shall replace and cancel all other agreements between the parties.
/s/ Dr. L. R. Queen
Dr. L. R. Queen, Director and member of
Vencash Asset Corporation, Inc. Compensation Committee
/s/ M. B. Reuscher
M. B. Reuscher, Director and member of
Vencash Asset Corporation, Inc. Compensation Committee
Accepted by: |
|
/s/ Douglas N. Mac Donald |
/s/ Douglas N. Mac Donald |
Page Six
Agreement
Vencash Capital Corporation. - Mac Donald & Associates Gaming Specialists, Inc
APPENDIX #1
EXECUTIVE COMPENSATION/BONUS PLAN
Vencash Asset Corporation, Inc. - Mac Donald & Associates Gaming Specialists Inc.
Vencash has initiated an Compensation and Bonus Plan (the "Plan") for participation by Douglas N. Mac Donald, to which forms a part of this agreement
Douglas N. Mac Donald, Chief Executive Officer
Awards under the Plan will be issued on a quarterly basis based on a formula as set out in the Compensation and Bonus Plan. Vencash shall pay to Douglas Mac Donald for his duties as a the Chief Executive Officer of Vencash Capital Corporation in a manner set out below:
/s/ Dr. L. R. Queen
Authorized signatory,
Dr. L. R. Queen, Director, and member of
Vencash Asset Corporation, Inc. Compensation Committee
/s/ M. Bernd Reuscher
Authorized signatory,
M. Bernd Reuscher, Director, and member of
Vencash Asset Corporation, Inc. Compensation Committee
THIS AGREEMENT is effective as of the 1st day of April 2003
BETWEEN:
WESTSPHERE FINANCIAL GROUP LTD.
a body corporate under the laws of the Province of Alberta
(hereinafter referred to as "Westsphere Financial")
OF THE FIRST PART
and
MAC DONALD & ASSOCIATES GAMING SPECIALISTS INC.,
a body corporate under the laws of the Province of Alberta
(hereinafter referred to as "Mac Donald & Associates")
OF THE SECOND PART
and
DOUGLAS N. MAC DONALD,
a businessman residing in St. Albert, Alberta
(hereinafter referred to as "Mac Donald")
OF THE THIRD PART
WHEREAS:
A. Westsphere Financial conducts its business operations supplying "financial services and packages" such as lease funding, equity based secured loans and venture capital to its wholly owned or other related business operations.
B. Mac Donald & Associates were originally brought together to service the specialty business field associated with the Gaming (licensed and regulated gambling) Industry in Canada and throughout North America. Mac Donald & Associates business has evolved to incorporate the corporate management and governance field.
C. Mac Donald & Associates is an association of independent management and consulting specialists, who specialize in the field of forensic evaluation, due diligence investigations, corporate audit investigations and corporate re-structuring and where Mac Donald & Associates is engaged in the business of supplying consulting, management, promotional and development services for several Corporations ("Clients") whereby it provides administrative and operational support to its clients and/or their wholly owned subsidiaries and joint venture business operations.
D. Mac Donald & Associates has retained the services of Douglas Norman Mac Donald in order to assist Mac Donald & Associates in meeting its' responsibilities to Westsphere Financial pursuant to the terms of this agreement . Westsphere Financial wishes to retain Mac Donald & Associates to supply the services of Douglas Norman Mac Donald to act as the Chief Executive Officer and President of Westsphere Financial in order to initiate, direct, organize, co-ordinate, promote, oversee and manage the administration and day to day business operations of Westsphere Financial
Page Two
Agreement
Westsphere Financial Group Ltd. - Mac Donald & Associates Gaming Specialists, Inc.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each, the parties hereto covenant and agree each with the other as follows:
ARTICLE 1
TERM
1.1 The term of this agreement shall be for a two (2) year period commencing on the first day of April, 2003 and ending on the thirty-first day of March, 2005.
1.2 Provided Westsphere Financial is not in default under this agreement, the agreement will automatically renew for a further one (1) year term, and will successively renew for further one (1) year terms, unless or until Westsphere Financial or Mac Donald & Associates shall, at least sixty (60) days prior to the last day of the then current term, deliver written notice to the other party of non-renewal, in which case this agreement shall terminate on the last day of the then current term.
1.3 Mac Donald & Associates and Mac Donald agree to the cancellation of all other agreements previously entered into between Westsphere Financial and Mac Donald & Associates and Mac Donald with the understanding and commitment that notwithstanding when notice is delivered of non renewal or termination of this agreement between the first two parties, Westsphere Financial agrees that Mac Donald & Associates and Mac Donald shall receive from Westsphere Financial a minimum of nine (9) months severance package. The severance package is to include;
i) continued full payment of contracted monthly payments including salaries, bonuses due for the period, and other enumeration for services rendered by Mac Donald & Associates or Mac Donald to Westsphere Financial as set out in this agreement,
ii) continued full payment for contracted expense allowance as covered in this agreement,
iii) the option of a buy out of any supplied equipment utilized personally by Mac Donald including but not limited to any personal p.c. computer systems, vehicles, or any other personal use items or equipment, at full depreciated value supplied by Westsphere Financial,
iv) full medical, life insurance, dental and health benefits existing at the time of non-renewal or termination which will continue fully paid by Westsphere Financial for a minimum of twelve (12) months from the termination date of this Agreement.
ARTICLE 2
RESPONSIBILITIES OF MAC DONALD & ASSOCIATES AND MAC DONALD
2.1 Mac Donald & Associates will supply the services of Douglas Norman Mac Donald to act as the Chief Executive Officer and President of Westsphere Financial whose duties will be to initiate, direct, organize, co-ordinate, promote, oversee and manage the administration and day to day business responsibilities of Westsphere Financial pursuant to the terms of this agreement.
Page Three
Agreement
Westsphere Financial Group Ltd. - Mac Donald & Associates Gaming Specialists, Inc.
2.2 With the written approval of the Board of Directors of Westsphere Financial Mac Donald & Associates can supply a suitable and agreed upon replacement for Mac Donald to fill the role of the Chief Executive Officer and President if for some reason Mac Donald cannot continue in the role of Chief Executive Officer and/or President.
2.3 Mac Donald will direct and be responsible for the due diligence, organization, and promotion, of Westsphere Financial, and will be responsible to initiate, direct, organize, co-ordinate, promote, oversee and manage the administration and day to day business operations of Westsphere Financial and in doing so carry out the responsibilities of Mac Donald & Associates and Mac Donald, pursuant to the terms and conditions of this Agreement.
2.4 Mac Donald shall provide the following services for the benefit of Westsphere Financial, at the direction of the Board of Directors of Westsphere Financial;
(a) to co-ordinate and assist in negotiations of contracts pertaining to the purchase and distribution of certain products, equipment, services, properties, and businesses required for the development of all aspects of the business of Westsphere Financial, its wholly owned subsidiaries and joint venture business operations,
(b) provide liaison with the agents of the owners of property and businesses of interest to Westsphere Financial, its wholly owned subsidiaries and joint venture business operations or their auditors, accountants and lawyers,
(c) co-ordinate, oversee and manage the administration responsibilities of Westsphere Financial,
(d) negotiation and concluding acquisitions on behalf of Westsphere Financial and/or subsidiaries or joint venture operations in which Westsphere Financial is a party,
(e) ensure the reporting responsibilities and deadlines pertaining to all United States Securities and Exchange Commission filings are met and maintained in order to ensure that Westsphere Asset Corporation, Inc's (Westsphere Financial's sole shareholder) are listed for trading on the OTC BB under the symbol: WSHA.,
(f) any other related services which is requested by the Board of Directors of Westsphere Financial
2.5 Mac Donald & Associates and Mac Donald agree that they shall, during the continuance of this agreement provide their service to the business of Westsphere Financial and/or subsidiaries or joint venture operations in which Westsphere Financial is a party and in the best interest of Westsphere Financial.
2.6 It is acknowledged, agreed and understood by Westsphere Financial, Mac Donald &
Associates and Mac Donald supply similar management and consulting services to other related and non-related Corporations. Westsphere Financial is aware that Mac Donald & Associates and Mac Donald now, and will continue to, provide management service to other companies and Westsphere Financial recognizes that these companies will require a certain portion of the time of Mac Donald & Associates and Mac Donald.
Page Four
Agreement
Westsphere Financial Group Ltd. - Mac Donald & Associates Gaming Specialists, Inc.
Westsphere Financial agrees that Mac Donald & Associates may continue to provide such services to outside interests, provided that such interests do not conflict with their duties under this agreement.
2.7 Mac Donald & Associates and Mac Donald shall not, and shall insure that it does not, except as authorized or required hereunder, reveal or divulge to any person or companies any of the trade secrets, secret or confidential operations, processes or dealings or any information concerning the organization, business, finances, transactions or other affairs of Westsphere Financial or of their subsidiaries which may come to the knowledge of Mac Donald & Associates and Mac Donald during the term of this agreement and shall keep in complete secrecy all confidential information entrusted to them and shall not use or attempt to use any such information in any manner which may injure or cause loss either directly or indirectly to the business of Westsphere Financial, or may be likely so to do. This restriction shall cease to apply to information or knowledge which may come into the public domain through no fault of Mac Donald & Associates.
ARTICLE 3
COMPENSATION
3.1 As compensation for the services rendered and provided by Mac Donald & Associates and Mac Donald to Westsphere Financial pursuant to this Agreement during the Term, Westsphere Financial shall pay to M&A Gaming, the sum of thirty-nine ($39,000.00) thousand dollars per year plus applicable GST, payable in 12 equally monthly installments of three thousand two hundred and fifty ($3,250.00) dollars per month plus applicable GST commencing on the date of this agreement.
3.2 Incorporated with and in addition to the compensation outlined in the aforementioned Article 3.1 is an Executive Compensation/Bonus Plan which will be set out as an appendix to this agreement and will be attached to and form a part of this agreement, commencing on April 1, 2002 and continuing during the effective dates of this agreement.
3.3 Incorporated with and in addition to the compensation outlined in the aforementioned Article 3.1 and Article 3.2 and appendix #1 is a pre authorized expense allowance to reimburse M&A, for all expenses incurred, by Mac Donald & Associates and Mac Donald on behalf of Westsphere Financial during the effective dates of this agreement.
3.4 Commencing April 1, 2002, any charges incurred from purchases made through the use of any Westsphere Financial or Westsphere Financial subsidiary issued credit cards supplied to Mac Donald & Associates and/or Mac Donald will be credited as payment of compensation directly to Mac Donald & Associates as payment received by M&A Gaming. Copies of credit card statements outlining the transactions totaling the amount debited from the next monthly installment will be forwarded to Mac Donald & Associates upon receipt.
3.5 Incorporated with and in addition to expenses outlined in the aforementioned Article 3.3 and Article 3.4 Westsphere shall pay to M&A Gaming and Mac Donald one hundred and fifty ($150.00) dollars monthly for office accommodation supplied by M&A Gaming located at 45 Sheridan Drive, St. Albert, Alberta.
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Agreement
Westsphere Financial Group Ltd. - Mac Donald & Associates Gaming Specialists, Inc.
3.6 Incorporated with and in addition to expenses outlined in the aforementioned Article 3.3 Westsphere shall be responsible to reimburse M&A Gaming and Mac Donald for monthly communication costs related to telephone, facsimile and internet services supplied to Westsphere at the St. Albert, Alberta office of Mac Donald Gaming located at 45 Sheridan Drive, St. Albert, Alberta and more specifically related to but not exclusive to telephone number (780) 460-0252 @ $135.00 per month and facsimile number (780) 460-0253 @ $45.00 per month and Shaw Cable @ $95.00 per month.
3.7 Incorporated with and in addition to expenses outlined in the aforementioned Article 3.3 and Article 3.4 Westsphere shall be responsible to reimburse Mac Donald a vehicle allowance to consist of;
(Westsphere Financial understands and agrees that upon review of the aforementioned travel allowance increase adjustments can be made to the travel totals after producing such supporting and accepted business travel logs required to confirm and validate the adjustment.)
(Mac Donald and M&A Gaming agree that in the case that fuel purchases are paid by either Westsphere Financial or any of its subsidiaries or joint venture business operations the flat rate payment shall be reduced by the amount of the fuel purchases supported by such receipts documenting the payment of the fuel purchase by either Westsphere Financial or any of its subsidiaries or joint venture business operations. Mac Donald will have the option at his sole discretion of repayment of gas purchased on his behalf to Westsphere or reducing the flat rate km. claim.)
3.8 Commencing April 1, 2003, a full medical, dental and health benefits program will be supplied to Mac Donald for full participation of all of Mac Donald immediate family members residing at the family residence of 45 Sheraton Drive, St. Albert, Alberta. Premiums pertaining to Mac Donald's participation in the benefits program will continue fully paid by Westsphere Financial until the original termination date of this Agreement or period of severance package term whichever is greater. Benefits related payment will be made in addition to the compensation payments as set out in articles 3.1 and 3.2.
3.9 Westsphere Financial will supply Calgary based living accommodation to be utilized by Mac Donald while working within the Calgary area. Accommodation must be mutually acceptable by all parties to this agreement. Any dispute over accommodation shall result in Mac Donald being afforded commercial hotel accommodation of his choice while attending in Calgary in executing the duties and responsibilities of M&A Gaming and Mac Donald according to the terms and conditions of this Agreement.
ARTICLE 4
GOVERNING LAW
4.1 The laws of the Province of Alberta, shall govern this Agreement and all matters arising thereunder.
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Agreement
Westsphere Financial Group Ltd. - Mac Donald & Associates Gaming Specialists, Inc.
ARTICLE 5
ASSIGNMENT
5.1 This agreement may be assigned by either party only with the written consent of the other party hereto.
ARTICLE 6
ENUREMENT
6.1 The provisions of this Agreement shall enure to the benefit of and are binding upon the parties hereto together with their respective personal representatives, successors and assigns.
ARTICLE 7
SIGNING BY COUNTERPART
7.1 This Agreement may be signed by the parties hereto in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original, and such counterparts together shall constitute on and the same instrument and notwithstanding the date of the execution will be deemed to bear the date as set forth above.
IN WITNESS WHEROF the parties hereto have duly executed this agreement to take effect as of the 1st day of March, AD 2003. Upon the execution of this document, this agreement shall replace and cancel all other agreements between the parties.
/s/ Dr. L. R Queen
Dr. L. R. Queen, Director and member of
Westsphere Financial Asset Corporation, Inc. Compensation Committee
/s/ M. B. Reuscher
M. B. Reuscher, Director and member of
Westsphere Financial Asset Corporation, Inc. Compensation Committee
Accepted by: |
|
/s/ Douglas N. Mac Donald |
/s/ Douglas N. Mac Donald |
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Agreement
Westsphere Financial Capital Corporation. - Mac Donald & Associates Gaming Specialists, Inc
APPENDIX #1
EXECUTIVE COMPENSATION/BONUS PLAN
Westsphere Financial Asset Corporation, Inc. - Mac Donald & Associates Gaming Specialists Inc.
Westsphere Financial has initiated an Compensation and Bonus Plan (the "Plan") for participation by Douglas N. Mac Donald, to which forms a part of this agreement
Douglas N. Mac Donald, Chief Executive Officer
Awards under the Plan will be issued on a quarterly basis based on a formula as set out in the Compensation and Bonus Plan. Westsphere Financial shall pay to Douglas Mac Donald for his duties as a the Chief Executive Officer of Westsphere Financial Capital Corporation in a manner set out below:
/s/ Dr. L. R. Queen
Authorized signatory,
Dr. L. R. Queen, Director, and member of
Westsphere Financial Asset Corporation, Inc. Compensation Committee
/s/ M. Bernd Reuscher
Authorized signatory,
M. Bernd Reuscher, Director, and member of
Westsphere Financial Asset Corporation, Inc. Compensation Committee
EXHIBIT 31
SECTION 302 CERTIFICATIONS
I, Douglas MacDonald, certify that:
1. I have reviewed this quarterly report of Westsphere Asset Corporation, Inc.
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 statements, 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. As the Registrant's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant I have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which the quarterly report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
(d) Disclosed in this report any changes in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant's auditors:
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: November 14, 2003 |
By: /s/ Douglas MacDonald Name: Douglas MacDonald Title: President and CEO |
SECTION 302 CERTIFICATIONS
I, Kim Law, certify that:
1. I have reviewed this quarterly report of Westsphere Asset Corporation, Inc.
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 statements, 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. As the Registrant's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant I have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which the quarterly report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
(d) Disclosed in this report any changes in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant's auditors:
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
Date: November 14, 2003 |
By: /s/ Kim Law Name: Kim Law Title: Vice President of Finance and CFO |
EXHIBIT 32
CERTIFICATION PURSUANT TO
In connection with the Quarterly Report of Westsphere Asset Corporation, Inc. (the "Company") on Form 10-QSB for the period ended September, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Douglas MacDonald, President and CEO, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2003 |
By: /s/ Douglas MacDonald Name: Douglas MacDonald Title: President and CEO |
CERTIFICATION PURSUANT TO
In connection with the Quarterly Report of Westsphere Asset Corporation, Inc. (the "Company") on Form 10-QSB for the period ended September, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kim Law, Vice President of Finance and CFO, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2003 |
By: /s/ Kim Law Name: Kim Law Title: Vice President of Finance and CFO |