F-4/A

As filed with the Securities and Exchange Commission on September 3, 2004

Registration No. 333-116582

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Amendment No. 1 to

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Bombardier Recreational Products Inc.

(Exact name of Registrant as specified in its charter)

Canada	3790	98-0413395
(State or jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)
Canada	4186524 Canada Inc.	Not Applicable
Nova Scotia	BRP Nova Scotia ULC	98-0413396
Delaware	BRP US Inc.	37-1341308
Delaware	BRP Holdings (USA) Inc.	20-0460802
Delaware	BRP Holding LP	47-0935320
Delaware	BRP LLC	47-0935322
Barbados	BRP (Barbados) Inc.	Not Applicable
Luxembourg	BRP (Luxembourg) 1 S.ar.l.	Not Applicable
Luxembourg	BRP (Luxembourg) 2 S.ar.l.	Not Applicable
Luxembourg	BRP (Luxembourg) 3 S.ar.l.	Not Applicable
Luxembourg	BRP (Luxembourg) 4 S.ar.l.	Not Applicable
Luxembourg	BRP (Luxembourg) 5 S.ar.l.	Not Applicable
Mexico	BRP Mexico S.A. de C.V.	Not Applicable
Australia	BRP Australia Pty Ltd.	Not Applicable
Japan	BRP Japan Ltd.	Not Applicable

1061 Parent Street

Saint-Bruno, Québec

Canada J3V 6P1

(450) 461-7700

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Jennifer Millson

Bombardier Recreational Products Inc.

1061 Parent Street

Saint-Bruno, Québec

Canada J3V 6P1

(450) 461-7700

(Name, address, including zip code, and telephone number, including area code, of agent for service)

with a copy to:

Joel F. Freedman, Esq.

Ropes & Gray LLP

One International Place

Boston, MA 02110-2624

(617) 951-7000

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this Registration Statement.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered(1)	Amount to be Registered	Proposed Maximum Offering Price Per Unit (1)		Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee (2)(4)
8 3/8% Senior Subordinated Notes due 2013(3)	U.S.$200,000,000	100	%	U.S.$200,000,000	U.S.$25,340

(1) Estimated solely for the purpose of calculating the registration fee.

(2) Calculated pursuant to Rule 457.

(3) 4186524 Canada Inc., BRP Nova Scotia ULC, BRP US Inc. BRP Holdings (USA) Inc., BRP Holding LP, BRP (Luxembourg) 1 S.ar.l., BRP (Luxembourg) 2 S.ar.l., BRP (Luxembourg) 3 S.ar.l., BRP (Luxembourg) 4 S.ar.l., BRP (Luxembourg) 5 S.ar.l., BRP Mexico S.A. de C.V., BRP Australia Pty Ltd., and BRP Japan Ltd., the subsidiary co-registrants, will guarantee, on an unconditional basis, the obligations of Bombardier Recreational Products Inc. under the 8 ³/8% Senior Subordinated Notes.

(4) Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statements filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated                     , 2004

PRELIMINARY PROSPECTUS

[BRP LOGO]

Bombardier Recreational Products Inc.

Offer to Exchange

U.S.$200,000,000 principal amount of its 8 ³/8% Senior Subordinated Notes Due 2013, which have been registered under the Securities Act, for any and all of its outstanding 8 ³/8% Senior Subordinated Notes Due 2013.

We are offering to exchange all of our outstanding 8 ³/8% senior subordinated notes due 2013, which we refer to as the old notes, for our registered 8 ³/8% senior subordinated notes due 2013, which we refer to as the exchange notes, and together with the old notes, the notes. The terms of the exchange notes are identical to the terms of the old notes except that the exchange notes have been registered under the Securities Act of 1933, as amended, and are therefore freely transferable. We will pay interest on the notes on June 15 and December 15 of each year, beginning December 15, 2004. The notes will mature on December 15, 2013.

We may redeem some or all of the notes at any time on or after December 15, 2008 at the redemption prices set forth in this prospectus. In addition, at any time before December 15, 2006, we may redeem up to 35% of the notes with the net proceeds of one or more equity offerings so long as at least 65% of the aggregate principal amount of the notes remains outstanding. We may also redeem all of the notes at 100% of their principal amount plus accrued interest if at any time we become obligated to pay withholding taxes as a result of a change in law. Upon the occurrence of certain change of control events, we will be required to offer to purchase the notes.

We are also hereby offering to exchange the subsidiary guarantees of the old notes for subsidiary guarantees of the exchange notes, which are described herein.

The principal features of the exchange offer are as follows:

• The exchange offer expires at 5:00 p.m., New York City time, on             , 2004, unless extended.

• We will exchange all old notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer.

• You may withdraw tendered old notes at any time prior to the expiration of the exchange offer.

• The exchange of old notes for exchange notes pursuant to the exchange offer will not be a taxable event for U.S. federal income tax purposes.

• We will not receive any proceeds from the exchange offer.

• We do not intend to apply for listing of the exchange notes on any securities exchange or automated quotation system.

Broker-dealers receiving exchange notes in exchange for old notes acquired for their own account through market-making or other trading activities must deliver a prospectus in any resale of the exchange notes.

Investing in the notes involves risks that are described in the “ Risk Factors” section beginning on page 12.

Neither the U.S. Securities and Exchange Commission nor any other federal or state agency has approved or disapproved of the securities to be distributed in the exchange offer, nor have any of these organizations determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is             , 2004

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal delivered with this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where such old notes were acquired by such broker-dealers as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days following the effective date of the registration statement, of which this prospectus is a part, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus as if we had authorized it. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction to any person whom it is unlawful to make such offer or solicitation in such jurisdiction.

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	12
Presentation of Financial and Other Information	25
Exchange Rate Data	25
Enforceability of Civil Liabilities Against Foreign Persons	26
Forward-Looking Statements	26
Trademarks and Trade Names	27
Market and Industry Data	27
The Transactions	28
Exchange Offer	29
Use of Proceeds	36
Capitalization	37
Selected Historical Consolidated Financial Data	38
Unaudited Pro Forma Consolidated Financial Data	42
Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Business	66
Management	79
Security Ownership of Certain Beneficial Owners and Management	84
Certain Related Party Transactions	86
Description of Our Senior Secured Credit Facility	88
Description of the Exchange Notes	91
Description of Other Financing Arrangements	138
Book Entry, Delivery and Form	141
Material Tax Considerations	143
Plan of Distribution	149
Legal Matters	149
Independent Auditors	149
Available Information	150
Index to Financial Statements	F-1

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SUMMARY

The following summary contains basic information about us and this offering. It likely does not contain all the information that is important to you. You should read the entire prospectus, including the financial data and related notes, before making an investment decision.

As used in this prospectus, references to “we,” “us” and “our” refer to Bombardier Recreational Products Inc. and its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires. Prior to the consummation of the Transactions on December 18, 2003, which are described below, we operated as the recreational products business of Bombardier Inc. within its operational and administrative infrastructure. Since that time we have operated as an independent company. In connection with the Transactions, we entered into certain arrangements with Bombardier, including a trademark license agreement and floorplan and other financing arrangements, each of which is more specifically described in “Certain Related Party Transactions—Arrangements with Bombardier” and “Description of Other Financing Arrangements.” All financial information reflecting our results of operations prior to December 18, 2003, including financial information provided as to our various business segments, constitutes results of operations of the recreational products business of Bombardier. See “Risk Factors—We may not effectively build the infrastructure previously provided to our business by Bombardier.”

We present our financial information in Canadian dollars. In this prospectus, all references to “U.S.$” refer to U.S. dollars and all references to “$” refer to Canadian dollars. References to “fiscal” refer to the results of operations for the 12-month period ending January 31 of the applicable year. In some cases, for ease of comparison purposes, data for the period of December 19, 2003 to January 31, 2004 has been added to data for the period from February 1, 2003 to December 18, 2003 to arrive at a 12-month combined period ended January 31, 2004. This period may be referred to herein as the combined year ended January 31, 2004. Unless otherwise noted, “EBITDA” and other financial terms have the meanings set forth under “—Summary Historical and Pro Forma Consolidated Financial Data.”

Our Company

We are a leading designer, manufacturer and distributor of motorized recreational products worldwide. Our business consists of a diversified portfolio of products with industry leading and improving market shares. We have a number one market share position in the primary markets of each of our core products: snowmobiles (the Ski-Doo and Lynx brands), personal watercraft (the Sea-Doo brand), and sport boats (the Sea-Doo brand). In 2001, we also entered the market for outboard engines, by acquiring the Johnson and Evinrude brands from Outboard Marine Corporation (which brands have the highest installed base of outboard engines in North America) and for all terrain vehicles, or ATVs, by launching our own product line. Due to our market leading positions, our products have a large base of customers who currently use our products, which installed base generates repeat business from our customers and supports a recurring stream of revenue from related parts, accessories and clothing sales. Our products are distributed worldwide through approximately 1,500 power sports dealers, 2,000 marine dealers and 105 other distributors.

On July 23, 2004, our board of directors approved the sale of our utility vehicles segment. The transaction was completed on August 30, 2004 and the utility vehicles segment was sold for net proceeds of approximately $40 million, subject to a purchase price adjustment based on working capital amounts at the closing date. The sale of the utility vehicles segment is in line with our strategic focus, which is designed to maximize the synergies between our various products and manufacturing facilities. The sale of the utility vehicles segment will not have a significant impact on our results of operations and financial position. For the combined year ended January 31, 2004, revenues from the utility vehicles segment represented 3.3% of our combined revenues and segment operating profit represented 4.6% of our combined segment operating profit.

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Our Businesses

Power Sports Segment

Our power sports segment includes our snowmobile, personal watercraft, ATV, sport boat and small engine businesses, including any related parts, accessories and clothing operations. During the combined year ended January 31, 2004, our power sports division generated revenues of approximately $1,866.8 million.

Snowmobiles. Our founder introduced the first modern day snowmobile in 1959. We currently produce a full line of products marketed under the Ski-Doo brand name in North America and Europe and the Lynx brand name in Europe. Our products have been recognized with industry awards for many years, including “2004 Snowmobile of the Year” from Snow Goer Magazine and “Real World Sled of the Year” by SnowTrax Television in 2004. Our distribution network consists of approximately 800 dealers in North America, approximately 70% of which we believe exclusively sell our products. Due to our more than 40-year presence in the industry and our market leadership, we have a large installed base of snowmobiles. Through the sale of related parts, accessories and clothing, this installed base generates a recurring stream of revenues.

Personal Watercraft. We introduced the first personal watercraft in 1968. We currently produce a full line of personal watercraft marketed under the Sea-Doo brand name. Our products have been recognized with industry awards for many years, including “2004 Editor’s Choice in the Musclecraft Class” from Watercraft World Magazine for our Sea-Doo RXP. Our distribution network consists of approximately 850 dealers in North America, of which 750 are in the U.S. and approximately 55% of which we believe exclusively sell our products. As a result of our history of market leadership, we have a large installed base of personal watercraft that generates a recurring stream of revenues from the sale of related parts, accessories and clothing.

All-terrain Vehicles. The first 3-wheel ATV product was introduced in North America in 1971, and the modern 4-wheel ATV was introduced during the late 1980s. We began producing a limited line of ATVs in 1998 to leverage our manufacturing facilities, technology and dealer network. Since that time, we have been expanding our ATV product lines to cover most key market segments, including the utility and recreational segments of the market. Our products have been recognized with industry awards, including “2004 Innovation of the Year” from ATV Guide for the Outlander MAX. Our distribution network consists of approximately 1,150 dealers in North America, approximately 50% of which we believe exclusively sell our products.

Sport Boats. We entered the recreational boating industry in 1994 as an extension of our already successful personal watercraft business. Our model year 2004 line-up is composed of nine platforms and twelve different models of sport boats marketed under the Sea-Doo brand name, which address sport performance and all-purpose recreational needs of consumers in the sport boat segment of the recreational boating industry. Sport boats represent a specific niche in the market, representing motorized boats that utilize jet-power rather than conventional propeller propulsion.

Small Engines. We manufacture small engines for a broad array of vehicles and equipment under the Rotax brand name. These engines are used in our Ski-Doo and Lynx snowmobiles, our Sea-Doo personal watercraft, our ATVs, as well as in other manufacturers’ motorcycles, scooters, karts and small and ultra-light aircraft.

Marine Engines Segment

In March 2001, we acquired most of the engine manufacturing assets of Outboard Marine Corporation, or Outboard Marine. The assets we acquired included the Johnson and Evinrude outboard engine brands and a direct-injection technology, which allows 2-stroke engines to meet stricter emission standards. Our marine engine segment currently sells all three principal engine types, 2-stroke carbureted engines, 2-stroke direct injection engines and 4-stroke engines. Evinrude direct injection engines received “Highest in Customer Satisfaction for two-stroke engines” from J.D. Power & Associates in 2003 for engines produced in 2002 and early 2003, including our first full year of ownership. In addition, our new Evinrude E-TEC technology won the 2003 “Innovation Award” from the National Marine Manufacturer Association, as well as the 2003 “Editor’s Choice” award from Motorboating

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magazine. Due to the long history of the Johnson and Evinrude brands, we have a large installed base, estimated to be 40% of all installed outboard engines in the U.S. in 2003. During the combined year ended January 31, 2004, our marine engines segment generated revenues of approximately $542.3 million.

Related Parts and Accessories

We provide parts, accessories and clothing related to our products. The parts we sell include consumables (e.g., oil), wearable components (e.g., spark plugs and transmission belts) and replacement parts (e.g., pistons and windshields), while the accessories we sell include products that enhance or modify vehicle functionality (e.g., second passenger seats, colored covers and racks). Of the parts and accessories we sell, many are components, gauges and other parts which are not provided by another vendor. We also sell clothing, mainly in connection with our snowmobile and personal watercraft products, which reflects our brands and is designed with colors and logos to match our products.

Our Competitive Strengths

Diversified Portfolio of Leading Market Positions. We have become a global leader in recreational motorized products and we believe we have developed some of the most recognized and respected brands in our industries. We have been providing our customers motorized recreational products for over 40 years, resulting in the development of a strong portfolio of quality brands that have achieved market leadership positions.

Market Share Momentum in all Businesses. Despite our leading market position in several of our businesses, we have continued to gain market share from competitors in each of our main businesses. In the snowmobile business, our share of the North American market has grown from 29% in model year 2000 to 37% in model year 2004, while in Europe, we believe our market share has increased from 40% to 47% during the same period. In personal watercraft, our North American market share increased from 42% in model year 2000 to 47% in model year 2003. We have increased our market share in our newer ATV and outboard engines businesses as well. We believe the gains in market share reflect our focus on product innovation and the success of new technologies such as the REV platform in snowmobiles, the GTX 4-TEC model in personal watercraft and the E-TEC direct injection outboard engines.

Expertise in Innovative Product Development. We believe we have a history of innovation, beginning with the invention of the snow utility vehicle in 1945, followed by the invention of the modern-day snowmobile in 1959 and the creation of the personal watercraft in 1968. We believe we have demonstrated expertise in developing new products with the introduction of the first all-terrain vehicle specifically designed for two riders, a new generation of 2-stroke direct injection technology for outboard engines, and a platform for snowmobiles designed to provide a smoother ride and improved maneuverability.

Strong and Extensive Dealer Network and Relationships. We believe that our market position is strengthened by our extensive distribution network consisting of approximately 1,500 power sports dealers, 2,000 marine dealers and 105 other distributors. We also have a strategic alliance with Deere & Company to manufacture John Deere branded ATVs which are sold through Deere & Company’s dealer network in North America. Also, through this strategic alliance, Deere & Company is manufacturing a Bombardier private label side-by-side vehicle that we sell through our dealer network in North America.

High Quality and Diverse Product Offering. Our commitment to product development has been recognized by both consumers and the industries in which we compete. Ski-Doo was recently selected as “Snowmobile of the Year” by Snow Goer Magazine in 2004 and “Real World Sled of the Year” by SnowTrax Television in 2004. Sea-Doo personal watercraft has received similar distinction, being named 2004 “Editor’s Choice in the

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Musclecraft Class” by Watercraft World Magazine. Our Outlander MAX ATV has been awarded “Innovation of the Year” by ATV Guide in 2004 while our Evinrude E-TEC direct injection engine received the “Innovation Award” from the National Marine Manufacturer Association in 2003. We believe the wide range of products we offer allows us to target many different markets effectively. In addition, this diverse base of products allows us to take advantage of the seasonal trends in our businesses.

Experienced Management Team with Strong Track Record. We have an experienced management team that has demonstrated its ability to grow revenue and increase market share while maintaining a corporate culture that is committed to offering our customers an exciting recreational experience. Our chairman, Laurent Beaudoin, has over 40 years experience with Bombardier Inc. Our other senior managers have an average of ten years of service with us. Their ability to identify new opportunities and identify new innovative product offerings enables us to remain a leader in the markets in which we compete.

Our History

The recreational products division of Bombardier Inc. was the founding business on which that company expanded into a world leader in transportation products. In 1937, Joseph Armand Bombardier developed a vehicle with steerable skis in front of a set of tracks that could travel across snow. Bombardier Inc. was founded in 1942 to manufacture this tracked vehicle and later produced what became the modern snowmobile. The first Ski-Doo snowmobile was launched in 1959. Thereafter, the recreational products division was expanded to other recreational motorized products, including the Sea-Doo personal watercraft in 1968, Sea-Doo sport boat in 1994, and ATV in 1998. Bombardier also made key acquisitions which complemented its recreational product business, including the acquisition of an Austrian company which manufactured Rotax engines in 1970, the acquisition of the Lynx brand snowmobile in 1988 and the acquisition of the Johnson and Evinrude brands and related assets in 2001.

The Transactions

On December 2, 2003, we entered into a purchase agreement with Bombardier Inc., whom we sometimes refer to in this prospectus as the seller or Bombardier, pursuant to which we purchased Bombardier’s recreational products business for a purchase price of approximately $960.0 million (comprised of $910.0 million in cash and $50.0 million face amount of redeemable preferred shares of our parent), subject to adjustment in accordance with the terms of the purchase agreement. The acquisition was primarily financed by (i) a cash common equity investment by an investor group led by affiliates of Bain Capital, Beaudier Group and Caisse de dépôt et placement du Québec, whom we collectively refer to as our Sponsors, and management of $310.0 million; (ii) the borrowing by us of an aggregate U.S.$280.0 million (approximately $372.2 million on the closing date) under our senior secured credit facility; and (iii) the issuance of an aggregate U.S.$200.0 million (approximately $265.8 million on the closing date) in the old notes. The acquisition and related financing transactions closed on December 18, 2003, immediately following the issuance of the old notes and the closing of our senior secured credit facility. The acquisition and the related financing transactions, including the issuance of the old notes and the payment of all related fees and expenses, are collectively referred to in this prospectus as the Transactions.

Corporate Information

We are a corporation organized under the laws of Canada. Our principal executive offices are located at 1061 Parent Street, Saint-Bruno, Québec, Canada J3V 6P1 and our telephone number is (450) 461-7700.

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The Exchange Offer

The following is a brief summary of some of the terms of this offering. For a more complete description of the terms of the notes, see “Description of the Exchange Notes.”

Issuer Bombardier Recreational Products Inc., a corporation organized under the laws of Canada.

Notes offered U.S.$200,000,000 aggregate principal amount of 8 ³/8% senior subordinated notes due 2013.

Maturity December 15, 2013.

Interest payment dates June 15 and December 15, beginning December 15, 2004. Interest on the exchange notes will accrue from June 15, 2004, the last interest payment date for the old notes.

Guarantees The notes will be guaranteed on a full and unconditional, unsecured senior subordinated basis by all of our existing and future subsidiaries that guarantee our obligations and the obligations of our restricted subsidiaries under our senior secured credit facility. See “Description of the Exchange Notes—Brief Description of the Exchange Notes and the Subsidiary Guarantees—The Subsidiary Guarantees.”

Ranking The notes will be our unsecured senior subordinated obligations and will:

• rank junior to all of our existing and future senior debt, which will include debt under our senior secured credit facility;

• rank equally with our existing and future senior subordinated debt;

• rank senior to all of our existing and future subordinated debt; and

• be effectively subordinated to all of our existing and future secured obligations to the extent of the value of the assets securing such obligations, including debt under our senior secured credit facility.

Similarly, the guarantees by our subsidiaries will:

• rank junior to all of the existing and future senior debt of such subsidiaries, which will include the subsidiary guarantees under our senior secured credit facility;

• rank equally with the existing and future senior subordinated obligations of such subsidiaries;

• rank senior to all of the existing and future subordinated debt of such subsidiaries; and

• be effectively subordinated to all of the existing and future secured obligations of such subsidiaries to the extent of the value of the assets securing such obligations, including the subsidiary guarantees under our senior secured credit facility.

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As of January 31, 2004, we and our subsidiaries had approximately $371.4 million of senior debt outstanding to which the exchange notes would have been subordinated. In addition, the exchange notes and subsidiary guarantees will be effectively subordinated to all intercompany debt of non-guarantor subsidiaries pledged to our lenders pursuant to our senior secured credit facility. See “Description of the Exchange Notes—Subordination.”

Optional redemption We may redeem some or all of the exchange notes, at any time on or after December 15, 2008 at the redemption prices described in this prospectus. See “Description of the Exchange Notes—Optional Redemption.”

We may also redeem the exchange notes as a whole but not in part at any time at 100% of the principal amount of the exchange notes plus accrued interest to the date of redemption in the event of changes affecting withholding taxes that would require us to pay “additional amounts” to holders of the exchange notes. See “Description of the Exchange Notes—Tax Redemption” and “—Additional Amounts.”

At any time prior to December 15, 2008, we may redeem the exchange notes upon a change of control at a price equal to 100% of the principal amount of the exchange notes plus the applicable premium. See “Description of the Exchange Notes—Optional Redemption.”

Equity offering optional redemption At any time before December 15, 2006, we may redeem up to 35% of the aggregate principal amount of the exchange notes with the net proceeds of one or more equity offerings so long as at least 65% of the aggregate principal amount of the exchange notes remains outstanding after such redemption.

Change of control Upon the occurrence of certain change of control events unless we give a notice to redeem the exchange notes as described above, we will be required to make an offer to purchase all the notes at a purchase price equal to 101% of the principal amount of the exchange notes, plus accrued interest.

Asset sales If we sell assets under certain circumstances, we will be required to make an offer to purchase the exchange notes with excess proceeds from the sale of assets. See “Description of the Exchange Notes—Asset Sales.”

Covenants The indenture governing the exchange notes contains covenants that, among other things, will limit our ability and the ability of our subsidiaries to:

• incur additional debt and issue or sell preferred stock,

• pay dividends on, redeem or repurchase our capital stock,

• make investments,

• create certain liens,

• sell assets,

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• in the case of our restricted subsidiaries, incur obligations that restrict their ability to make dividend or other payments to us,

• in the case of our subsidiaries, guarantee or secure debt,

• engage in transactions with affiliates,

• create unrestricted subsidiaries, and

• consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.

These covenants are subject to important exceptions and qualifications. See “Risk Factors—Risks Related to the Exchange Notes” and “Description of the Exchange Notes.”

Additional amounts Any payments made by us with respect to the exchange notes will be made without withholding or deduction for taxes unless required by law. If we are required by law to withhold or deduct for taxes with respect to a payment to the holders of exchange notes, we will pay the additional amount necessary so that the net amount received by the holders of exchange notes (other than certain excluded holders) after the withholding is not less than the amount that they would have received in the absence of the withholding. See “Description of the Exchange Notes—Additional Amounts.”

Transfer restrictions The exchange notes have not been registered under the Securities Act or any state securities laws and have not been qualified for sale under the securities laws of Canada or any province or territory of Canada. Accordingly, unless the exchange notes are registered, they may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws, and the securities laws of Canada or any province or territory of Canada.

No established market for the notes The exchange notes are a new issue of securities, and currently there is no market for them. We do not intend to apply for the exchange notes, to be listed on any securities exchange or to arrange for any quotation system to quote them. The exchange notes will be eligible for trading in The PORTAL^® Market. The initial purchasers of the notes have advised us that they intend to make a market for the exchange notes, but they are not obligated to do so. The initial purchasers may discontinue any market-making in the exchange notes at any time in their sole discretion. Accordingly, we cannot assure you that a liquid market will develop for the notes or the exchange notes.

Tax consequences For a discussion of certain U.S. and Canadian federal income tax consequences of an investment in the notes, see “Certain Tax Considerations.” You should consult your own tax advisor to determine the U.S., Canadian, federal, state, provincial, territorial, local and other tax consequences of an investment in the exchange notes with respect to your individual circumstances.

See “Risk Factors” and the other information in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the exchange notes.

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Summary Historical and Pro Forma Consolidated Financial Data

Our predecessor for the period from February 1, 1999 to December 18, 2003 is the recreational products business of Bombardier. We completed the Transactions as of December 18, 2003, and as a result of adjustments to the carrying value of assets and liabilities pursuant to the acquisition of the recreational products business that was part of the Transactions, the financial position and results of operations for periods subsequent to the Transactions may not be comparable to those of our predecessor company.

The summary historical financial data as at and for the year ended January 31, 2000 is derived from the unaudited financial statements of our predecessor company not included in this prospectus, and as at January 31, 2001 and 2002 and for the year ended January 31, 2001, is derived from the audited financial statements of our predecessor company not included in this prospectus. The summary historical financial data as at January 31, 2003 and December 18, 2003, and for each of the years in the two-year period ended January 31, 2003, and the period from February 1, 2003 to December 18, 2003 is derived from the audited financial statements of our predecessor company, which are included elsewhere in this prospectus together with the auditors’ report thereon. The summary historical consolidated financial data as at January 31, 2004 and for the period from December 19, 2003 to January 31, 2004 is derived from our audited consolidated financial statements, which are included elsewhere in this prospectus with the auditor’s report thereon. Data for the period from February 1, 2003 to December 18, 2003 has been added to data for the period from December 19, 2003 to January 31, 2004 to arrive at a combined twelve-month period ended January 31, 2004. Summary historical financial data as at and for the three-month period ended April 30, 2004 and for our predecessor’s three-month period ended April 30, 2003, have been derived from our unaudited interim consolidated financial statements, which are included elsewhere in this prospectus.

The following summary pro forma consolidated financial data for the twelve-month period ended January 31, 2004 gives effect, in the manner described under “Unaudited Pro Forma Consolidated Financial Data” and the notes thereto, to the Transactions, as if they occurred as of February 1, 2003. The unaudited pro forma consolidated financial data also gives effect to the disposal of the utility vehicles segment as if the disposal had occurred on February 1, 2003 and therefore the results of operations of the utility vehicles segment for the pro forma twelve months ended January 31, 2004 have been removed. The unaudited pro forma consolidated statement of income data does not purport to represent what our results of operations would have been if the Transactions had occurred as of the date indicated or what such results will be for future periods. Given that the balance sheet as at January 31, 2004 includes the effect of the Transactions, no pro forma consolidated balance sheet data is presented.

The summary pro forma interim consolidated data for the three-month period ended April 30, 2004 gives effect, in the manner described under “Unaudited Pro Forma Consolidated Financial Data” and the notes thereto, of the disposal of the utility vehicles segment as if the disposal had occurred on February 1, 2004. The unaudited pro forma interim consolidated balance sheet and statement of operations do not purport to represent what our results of operations would have been if the disposal had occurred as of the date indicated or what such results will be for future periods.

You should read the information contained in this table in conjunction with “Unaudited Pro Forma Consolidated Financial Data,” “Selected Historical Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the audited financial statements and the accompanying notes thereto of our predecessor company included elsewhere in this prospectus, and our audited consolidated financial statements and the accompanying notes thereto included elsewhere in this prospectus. The audited financial statements were prepared in accordance with Canadian GAAP, which differs in certain significant respects from U.S. GAAP. These differences are described in Note 22 and Note 26 to the audited financial statements of our predecessor company and our audited consolidated financial statements, respectively, included elsewhere in this prospectus.

8

	Predecessor															Successor									Predecessor			Successor
	Fiscal Year Ended January 31,												For the Period February 1, 2003 to December 18, 2003			For the Period December 19, 2003 to January 31, 2004			Combined Twelve Months Ended January 31, 2004			Pro Forma Twelve Months Ended January 31, 2004			Three Months Ended April 30, 2003			Three Months Ended April 30, 2004			Pro Forma Three Months Ended April 30, 2004
	2000			2001			2002			2003
	($ in millions, except ratios)
Canadian GAAP
Statement of Income Data:
Revenues
Power sports	$	1,345.7		$	1,558.8		$	1,638.8		$	1,819.9		$	1,593.1		$	273.7		$	1,866.8		$	1,866.8		$	378.8		$	479.5		$	479.5
Marine Engines(a)		—			—			289.4			563.5			482.5			59.8			542.3			542.3			129.1			143.6			143.6
Utility Vehicles		112.0			112.4			91.8			92.9			71.5			11.5			83.0			—			7.9			7.8			—
Total revenues(b)		1,457.7			1,671.2			2,020.0			2,476.3			2,147.1			345.0			2,492.1			2,409.1			515.8			630.9			623.1
Cost of sales		1,187.7			1,284.5			1,560.5			1,913.3			1,738.3			318.5			2,056.8			1,972.7			433.2			540.8			534.2
Gross profit		270.0			386.7			459.5			563.0			408.8			26.5			435.3			436.4			82.6			90.1			88.9
Operating expenses
Selling and marketing		90.5			97.8			136.4			166.3			147.2			18.6			165.8			161.4			45.4			40.5			39.3
Research and development		71.1			74.1			100.4			106.3			97.2			13.3			110.5			106.9			29.4			30.4			29.6
General and administrative		72.0			106.1			128.3			120.6			115.7			7.9			123.6			123.8			32.1			31.3			30.3
Total operating expenses		233.6			278.0			365.1			393.2			360.1			39.8			399.9			392.1			106.9			102.2			99.2
Operating profit (loss)		36.4			108.7			94.4			169.8			48.7			(13.3	)		35.4			44.3			(24.3	)		(12.1	)		(10.3	)
Interest expense (income) and other		2.8			(0.4	)		4.1			4.9			3.2			6.4			9.6			49.4			1.0			12.2			12.2
Accretion in carrying value of redeemable preferred shares		—			—			—			—			—			0.5			0.5			4.0			—			1.0			1.0
Net loss on derivative financial instruments		—			—			—			—			—			4.5			4.5			4.5			—			—			—
Unrealized foreign exchange loss on long-term debt		—			—			—			—			—			(1.3	)		(1.3	)		(1.3	)		—			21.2			21.2
Income (loss) before income taxes		33.6			109.1			90.3			164.9			45.5			(23.4	)		22.1			(12.3	)		(25.3	)		(46.5	)		(44.7	)
Income tax expense (recovery)		10.3			34.6			23.7			50.1			15.3			(5.9	)		9.4			(0.8	)		(8.8	)		(10.8	)		(10.1	)
Net income (loss)	$	23.3		$	74.5		$	66.6		$	114.8		$	30.2		$	(17.5	)	$	12.7		$	(11.5	)	$	(16.5	)	$	(35.7	)	$	(34.6	)
Other Operating Data:
EBITDA(c)	$	99.5		$	171.2		$	164.2		$	267.2		$	140.3		$	(2.4	)	$	137.9		$	153.6		$	2.2		$	(3.0	)	$	(1.3	)
Depreciation and amortization		63.1			62.5			69.8			97.4			91.6			14.1			105.7			112.5			26.5			30.3			30.2
Additions to property, plant and equipment		45.9			62.9			194.7			97.7			73.8			21.0			94.8						17.0			8.7			8.6
Ratio of earnings to fixed charges(d)		4.5	x		18.6	x		8.5	x		12.8	x		4.8	x		—			2.1	x		—						—			—
Balance Sheet Data (at end of period):
Cash	$	21.4		$	11.1		$	17.0		$	28.7		$	140.2		$	196.2												152.5			152.5
Working capital(e)		(39.3	)		(56.5	)		(289.0	)		(287.3	)		166.9			225.3												231.0			211.9
Total assets(f)		615.1			693.4			1,127.7			1,134.9			1,328.5			1,795.6												1,736.1			1,716.1
Total long-term debt		22.4			9.0			5.9			3.5			3.9			640.0												661.4			661.4
Redeemable preferred shares		—			—			—			—			—			43.2												44.2			44.2
Share capital		—			—			—			—			—			304.5												311.0			311.0
Total net equity		173.6			142.3			178.1			170.2			577.8			289.0												260.3			261.4
U.S. GAAP
Statement of Income Data:
Net income (loss)							$	53.4		$	132.8		$	37.8		$	(23.7	)	$	14.1		$	(6.6	)	$	0.5		$	(33.9	)	$	(32.8	)
Other Operating Data:
EBITDA(c) (g)							$	142.6		$	290.8		$	148.7		$	(11.7	)	$	137.0		$	152.7		$	26.7		$	(3.0	)	$	(1.3	)
Ratio of earnings to fixed charges(d)								6.9	x		14.7	x		5.8	x		—			2.3	x		—
Balance Sheet Data (at end of period):
Total assets							$	1,129.0		$	1,152.0		$	1,357.0		$	1,788.9											$	1,719.3		$	1,705
Total long-term debt								13.7			12.5			12.5			640.0												661.4			661.4
Total net equity(h)								136.4			130.5			531.2			282.3												230.0			231.1

9

(a) Revenues for the Marine Engines segment for the years ended January 31, 2000 and 2001 are not included as such results occurred prior to our predecessor’s acquisition of assets of the outboard engine business of Outboard Marine Corporation.

(b) Effective February 1, 2002, our predecessor prospectively adopted, for sales promotions and incentive programs, the requirements of EITF Issue 01-09. Under the new method, we generally provide for estimated sales promotion and incentive expenses at the later of revenue recognition or the announcement of sales promotion and incentive programs. Prior to the year ended January 31, 2003, these sales promotions and incentive programs were provided for at the time that management determined that the sales promotions and incentives were necessary, which was generally before the announcement to customers.

(c) EBITDA represents net income (loss) plus income tax expense (recovery), interest expense (income) including amortization of deferred financing costs, accretion in carrying value of redeemable preferred shares (which is considered interest expense under Canadian GAAP), and depreciation and amortization. We present EBITDA because we believe it provides useful information about our ability to service and incur debt. EBITDA is not an alternative to net income nor does it represent cash flow from operations as defined by either Canadian GAAP or U.S. GAAP, collectively, GAAP, and we do not suggest that you consider it is an indicator of operating performance or an alternative to operating cash flow or net income (as measured by GAAP) or as a measure of liquidity. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Furthermore, since EBITDA is not defined by GAAP, it may not be calculated on the same basis as other similarly titled measures of other companies. The following table represents a reconciliation from net income (a GAAP measure) to EBITDA:

	Predecessor										Successor						Predecessor		Successor
	Fiscal Year Ended January 31,								For the period February 1, 2003 to December 18, 2003		For the period December 19, 2003 to January 31, 2004		Combined Twelve Months Ended January 31, 2004		Pro Forma Twelve Months Ended January 31, 2004		Three Months Ended April 30, 2003		Three Months Ended April 30, 2004		Pro Forma Three Months Ended April 30, 2004
	2000		2001		2002		2003
	($ in millions)
EBITDA
Net income (loss)	$	23.3	$	74.5	$	66.6	$	114.8	$	30.2	$	(17.5)	$	12.7	$	(11.5)	$	(16.5)	$	(35.7)	$	(34.6)
Interest expense (income) and other		2.8		(0.4)		4.1		4.9		3.2		6.4		9.6		49.4		1.0		12.2		12.2
Accretion in carrying value of preferred shares		—		—		—		—		—		0.5		0.5		4.0		—		1.0		1.0
Income tax expense (recovery)		10.3		34.6		23.7		50.1		15.3		(5.9)		9.4		(0.8)		(8.8)		(10.8)		(10.1)
Depreciation and amortization		63.1		62.5		69.8		97.4		91.6		14.1		105.7		112.5		26.5		30.3		30.2
EBITDA	$	99.5	$	171.2	$	164.2	$	267.2	$	140.3	$	(2.4)	$	137.9	$	153.6	$	2.2	$	(3.0)	$	(1.3)

(d) For purposes of calculating the ratio of earnings to fixed charges, earnings represent income (loss) before income tax expense plus fixed charges. Fixed charges consist of total interest expense, amortization of deferred financing costs, accretion in carrying value of preferred shares and a one-third portion of operating lease expenses that management believes is representative of the interest component of rent pursuant to our operating leases. For U.S. GAAP purposes, the accretion in carrying value of redeemable preferred shares in the amount of $0.5 million, for the period from December 19, 2003 to January 31, 2004 and $1.0 million for the three-month period ended April 30, 2004 and pro forma three- month period ended April 30, 2004, are not included in fixed charges. The ratio (under Canadian GAAP) was not presented for the period of December 19, 2003 to January 31, 2004 and pro forma twelve months ended January 31, 2004 as earnings were insufficient to cover fixed charges by $23.4 million and $12.3 million, respectively. The ratio (under Canadian GAAP) was not presented for the three-month period ended April 30, 2004 and pro forma three-month period ended April 30, 2004 as earnings were insufficient to cover fixed charges by $46.5 million and $44.7 million, respectively. The ratio (under U.S. GAAP) was not presented for the period of December 19, 2003 to January 31, 2004 and pro forma twelve months ended January 31, 2004, as earnings were insufficient to cover fixed charges by $31.9 million and $9.9 million, respectively. The ratio (under US GAAP) was not presented for the three month period ended April 30, 2004 and pro forma three-month period ended April 30, 2004 as earnings were insufficient to cover fixed charges by $44.4 million and $42.6 million, respectively. The ratio for the pro forma twelve months ended January 31, 2004 is a supplemental pro forma ratio to give effect to the Transactions as reflected in the Unaudited Pro Forma Consolidated Statement of Income included elsewhere in this prospectus.

(e) Represents total current assets less total current liabilities.

(f) Total assets as of January 31, 2000 and 2001 do not include the acquisition of assets of the outboard engine business of Outboard Marine Corporation which was consummated in 2002.

10

(g) The following is a reconciliation of EBITDA from Canadian GAAP to U.S. GAAP:

	Predecessor									Successor									Predecessor			Successor
	Fiscal Year Ended January 31,						For the Period February 1, 2003 to December 18, 2003			For the Period December 19, 2003 to January 31, 2004			Combined Twelve Months Ended January 31, 2004			Pro Forma Twelve Months Ended January 31, 2004			Three Months Ended April 30, 2003			Three Months Ended April 30, 2004			Pro Forma Three Months Ended April 30, 2004
	2002			2003
	($ in millions)
EBITDA (Canadian GAAP)	$	164.2		$	267.2		$	140.3		$	(2.4	)	$	137.9		$	153.6		$	2.2		$	(3.0	)	$	(1.3	)
Adjustments (i):
Development costs capitalized		(9.5	)		(8.6	)		(4.7	)		(9.3	)		(14.0	)		(14.0	)		(1.6	)		—			—
Pension expense		(0.5	)		(0.9	)		(0.4	)		—			(0.4	)		(0.4	)		(0.1	)		—			—
Software costs capitalized		1.5			1.4			1.2			—			1.2			1.2			0.3			—			—
Unrealized gains/losses on foreign exchange contracts		(13.1	)		31.7			12.3			—			12.3			12.3			25.9			—			—
EBITDA (U.S. GAAP) (ii)	$	142.6		$	290.8		$	148.7		$	(11.7	)	$	137.0		$	152.7		$	26.7		$	(3.0	)	$	(1.3	)

(i) See Note 22, Note 26 and Note 14 to the audited financial statements of our predecessor company, our audited consolidated financial statements and our interim consolidated financial statements, respectively, included elsewhere in this prospectus.

(ii) EBITDA includes $9.1 million, $13.8 million, $11.3 million, $0.4 million, $11.7 million and $11.7 million of research and development tax credits for the fiscal years ended January 31, 2002 and 2003, the period from February 1, 2003 to December 18, 2003, the period from December 19, 2003 to January 31, 2004, the combined year ended January 31, 2004 and the pro forma twelve months ended January 31, 2004, respectively, which we include as a reduction in our research and development expenses, as opposed to a reduction in our income tax expense. For the three month period ended April 30, 2004 and 2003 and pro forma three month period ended April 30, 2004 EBITDA includes $1.5 million, $2.7 million and $1.5 million of research and development tax credits which we include as a reduction in our research and development expense, as opposed to a reduction in our income tax expense.

(h) Total net equity under U.S. GAAP includes other accumulated comprehensive income (loss) of $(12.3) million, $(10.3) million, $(15.2) million, $2.0 million, $(22.6) million and $(22.6) million as of January 31, 2002 and 2003, December 18, 2003, January 31, 2004, April 30, 2004 and pro forma April 30, 2004.

11

RISK FACTORS

You should carefully consider the risks described below before making an investment decision. Any of the following risks could materially and adversely affect our financial condition or results of operations. In such case, you may lose all or part of your original investment.

Risks Related to Our Businesses

We have a significant amount of debt, which we might not be able to service and which contain covenants that limit our activities.

As a result of our issuance of the old notes and borrowings under our senior secured credit facility, we have substantial debt. As of January 31, 2004, we and our subsidiaries had approximately $371.4 million (U.S.$280.0 million) of senior debt outstanding and approximately $265.3 million (U.S.$200.0 million) of senior subordinated debt outstanding. In addition, subject to restrictions in the indenture governing the notes and our senior secured credit facility, we may incur additional debt. This level of debt could have significant consequences to you, including:

• we must use a substantial portion of our cash flow from operations to pay interest and principal on the notes, loans under our senior secured credit facility and other indebtedness, which will reduce the funds available to us for other purposes such as potential acquisitions and capital expenditures;

• our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired;

• we are exposed to fluctuations in interest rates, because our senior secured credit facility will have a variable rate of interest;

• we have a higher level of indebtedness than some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in planning for, or responding to, changing conditions in our industry, including increased competition; and

• we are more vulnerable to general economic downturns and adverse developments in our business.

Our ability to repay or refinance our debt will depend upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory and other factors beyond our control.

We expect to obtain money to pay our expenses and to pay the principal and interest on the exchange notes, our senior secured credit facility and other debt from cash flow from our operations. Our ability to meet our expenses depends on our future performance, which will be affected by financial, business, economic and other factors. We will not be able to control many of these factors, such as economic conditions in the markets where we operate and pressure from competitors. We cannot be certain that our cash flow will be sufficient to allow us to pay principal and interest on our debt, including the notes, and meet our other obligations. If we do not have enough money, we may be required to refinance all or part of our existing debt, including the notes, sell assets or borrow more money. We cannot guarantee that we will be able to do so on terms acceptable to us, if at all. In addition, the terms of existing or future debt agreements, including our credit facilities and the indenture, may restrict us from pursuing any of these alternatives. The failure to generate sufficient cash flow or to achieve such alternative could significantly adversely affect the value of the notes.

12

The indenture for the notes and our senior secured credit facility impose significant operating and financial restrictions on us, which may prevent us from capitalizing on business opportunities and taking some corporate actions.

The indenture relating to the notes and our senior secured credit facility contain, and future debt instruments to which we may become subject may contain, debt covenants that limit our ability to engage in activities that could otherwise benefit our company, including restrictions on our ability to:

• incur, assume or permit to exist additional indebtedness or contingent obligations;

• incur liens and engage in sale and leaseback transactions;

• make capital expenditures;

• make loans and investments;

• declare dividends, make payments or redeem or repurchase capital stock;

• engage in mergers, acquisitions and other business combinations;

• prepay, redeem or purchase certain indebtedness including the exchange notes;

• amend or otherwise alter the terms of our indebtedness including the exchange notes;

• sell assets;

• transact with affiliates; and

• alter the business that we conduct.

Our senior secured credit facility also includes financial covenants, including requirements that we maintain a maximum total leverage ratio, a minimum fixed charge coverage ratio and a minimum interest coverage ratio. Our ability to comply with these covenants is dependent on our future performance which will be subject to many factors, some of which are beyond our control, including prevailing economic and weather conditions. A failure to comply with these covenants could result in a default under our senior secured credit facility, which could permit the lenders to accelerate such debt. If any of our debt is accelerated, we may not have sufficient funds available to repay such debt, in which case, our lenders could proceed against any collateral securing that debt. We cannot assure you that these covenants will not adversely affect our ability to finance our future operations or capital needs to pursue available business opportunities.

We operate in highly competitive industries, which may adversely affect our results of operations or our ability to expand our businesses.

All of the industries in which we operate are highly competitive and we have a number of significant competitors in each of our markets. Some of our competitors are more diversified and have financial and marketing resources which are substantially greater than ours. To continue to remain competitive, we will need to develop new, and improve our existing, products. The mature nature of our markets means that actions by our competitors to reduce their costs, lower their prices or introduce innovative products could hurt our sales or profits. We may not be able to maintain our competitive position within our markets.

If we are unable to develop new products or improve upon our existing products on a timely basis, our future profitability could be negatively affected.

We believe that our future success depends, in part, on our ability to develop on a timely basis new technologically advanced products or improve upon our existing products in innovative ways that meet or exceed appropriate industry standards. Maintaining our market position will require us to continue to invest in research and development and sales and marketing. Industry standards, customer expectations or other products may emerge that could render one or more of our products less desirable. We may not have sufficient resources to make necessary investments or we may be unable to make the technological advances necessary to develop new products or improve our existing products to maintain our market position.

13

If we are unable to protect our intellectual property rights or further develop our existing technologies, brands and marks or develop new technologies, brands and marks, our competitive position may be harmed.

We rely on a combination of patent, trade secret and trademark laws to protect certain aspects of our business. We have registered trademarks, copyrights and patents and other trademark and patent registrations pending in the United States and abroad. However, we have selectively pursued patent and trademark protection in Europe, Canada, and the United States, and in some instances we have not perfected important patent and trademark rights in these and other countries. The failure to obtain worldwide patent protection may result in other companies copying and marketing products based upon our protected technologies outside our protected markets. This could impede our growth in existing markets and into new markets, and result in a greater supply of similar products that could erode our pricing power.

Our well-established brands and branded products include Ski-Doo snowmobiles, Sea-Doo personal watercraft and sport boats and Johnson and Evinrude outboard engines. We believe that these trademarks are of great value and that the loss of any one or all of our trademark rights could lower sales and increase our costs. In addition, in connection with the Transactions, we entered into a trademark license agreement whereby we have the right to continue to use certain marks of Bombardier which were not otherwise assigned to us in connection with the Transactions, subject to certain conditions. The license allows us to use “Bombardier” in our corporate name as long as the Beaudier Group maintains at least a 10% ownership interest in our parent. If we have not been able to create a comparable independent brand for our products prior to the termination of the license, we may see a decline in sales and revenues when the license terminates.

We may be required to enforce our intellectual property or to defend our intellectual property from infringement claims and we may incur substantial costs as a result of litigation or other proceedings relating to patent or trademark rights.

Our success depends in part on our ability to protect our trademarks, trade secrets and patents from unauthorized use by others. If substantial unauthorized use of our intellectual property rights occurs, we may incur significant financial costs in prosecuting actions for infringement of our rights, as well as the loss of efforts by engineers and managers who must devote attention to these matters. We also cannot be sure that the patents we have obtained, or other protections such as confidentiality and trade secrets, will be adequate to prevent imitation of our products and technology by others. If we are unable to protect our technology through the enforcement of intellectual property rights, our ability to compete based on technological advantages may be harmed. If we fail to prevent substantial unauthorized use of our trade secrets, we risk the loss of intellectual property rights and our competitive advantage.

Additionally, we are currently a defendant in patent lawsuits relating to our snowmobiles and personal watercraft and others may bring similar suits. If we are unsuccessful in our defense of any of these actions, there could be material adverse consequences including payment of monetary damages, licensing of patents on unfavorable terms, and removal of desirable features from our products. Others may also claim we are infringing upon their patents. If so, we might also face significant liabilities, incur costs and which could limit our ability to use certain technology. Even if we are able to defeat such a claim, the allegation that we are infringing another’s intellectual property rights could harm our reputation and cause us to incur significant costs. Also, from time to time, third parties have challenged, and may in the future try to challenge, our trademark rights and branding practices. We may be required to institute or defend litigation to enforce our trademark rights, which, regardless of the outcome, could result in substantial costs and diversion of resources and could negatively affect our competitive position, sales, profitability and reputation. If we lose the use of a product name, our efforts spent building that brand will be lost and we will have to rebuild a brand for that product, which we may or may not be able to do.

14

Patented and unpatented technologies developed by our competitors and others may impair our competitive position.

Some of our direct competitors and indirect competitors (such as automotive manufacturers) may have significantly more resources to direct toward developing and patenting new technologies. It is possible that our competitors will develop and patent equivalent or superior engine technologies and other products that compete with ours. They may assert these patents against us and we may be required to license these patents on unfavorable terms or cease using the technology covered by these patents, either of which would harm our competitive position and may materially adversely affect our business. We also may not be able to obtain broad enough patent protection over our engine and other technologies to adequately protect our competitive advantages.

Actions of our dealers and distributors could harm our sales. Our failure to maintain good relations with our dealers and distributors or the loss or consolidation of our customer base could adversely affect our sales.

We are dependent on a dealer and distribution network to sell and service our products. We sell a majority of our products through non-exclusive distribution and dealer agreements. Many of the dealers through which we sell our products also carry competing product offerings and most dealers who sell our products exclusively are not contractually obligated to continue to do so and may choose to sell competing products at any time, which may lower our sales. In addition, we rely on our dealers to service and repair our products. There can be no assurance that our dealers will provide high quality repair services to our customers. If our dealers fail to provide quality repair work to our customers, our brand identity and reputation may be damaged and sales of our products may be adversely affected.

If our dealer base were to consolidate, competition for the business of fewer dealers would intensify. If we do not provide product offerings and pricing that meet the needs of our dealers, or if we lose a substantial amount of our dealer base, our profitability could decrease.

Also, particularly with respect to marine engines, we depend on relationships with customers for whom we manufacture original equipment manufacturer, or OEM, products. If our customer base were to begin using our competitors for their OEM needs or if any of these customers were acquired by our competitors, our OEM marine engine sales would be adversely affected.

Our floorplan financing and other financing arrangements subject us to risks associated with dealer defaults and insufficient liquidity.

We are party to written agreements with financing companies that provide financing for purchases of many of our products by dealers that meet the credit and other requirements of such financing companies. When a dealer purchases a product using dealer financing, we receive payment soon after shipment to the dealer. If we are not able to maintain this sort of dealer financing, also known as “floorplan” financing, on acceptable terms, our dealers will have to pay cash or obtain independent financing to purchase our products and consequently, may buy fewer products from us. The terms of our floorplan financing agreements require us to repurchase any new and unused product from dealers that default on their obligations to the finance company, generally subject to a cap. As a result, if one or more of our dealers default and we are required to repurchase their inventory, any funds we use for this purpose will not be available to operate our business. Repurchases would likely be required at times when the market for our products is depressed or not in season, which would limit our ability to resell the units and could have a material adverse effect on our financial position. See “Description of Other Financing Arrangements—Floorplan Financing.”

Additionally, certain of our supplemental floorplan financing agreements and other financing arrangements under which we sell receivables to third parties are terminable by the other party on short notice. In the event a financier terminates its arrangements with us, we may not have an adequate amount of time to find replacement financing on comparable terms or at all. In the absence of these arrangements, we would have to self-finance the

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sales of our products, the result of which would be an increase in our working capital needs. We may not be in a financial position to provide self-financing, and, if we did, it could have a negative impact on our short-term liquidity.

We rely on third parties to supply materials, components and, in some instances, our products, and their failure to do so could adversely affect our sales and increase our costs.

Some important components of our products are available from only one or two sources and in some instances we have entered into relationships whereby a third-party manufacturer supplies us with the finished product we sell. If these suppliers ceased doing business with us or decreased their supply to us, we may be unable to timely replace them, if at all. This could interrupt our production, hurt our sales or increase our costs.

We are subject to the risk of possible delays in deliveries or delivery failures on our supplier contracts. Suppliers’ failure to supply us on commercially reasonable terms would materially harm our operations. Adequate sources of alternative reliable outside suppliers may not be identified and engaged at advantageous terms or on any terms at all, which could adversely affect our sales.

We may not be able to execute our growth strategy.

Part of our strategy is to continue to gain market share by leveraging the strength of our brands in existing markets, expanding our development expertise into new markets, and growing internationally. Many factors, such as innovation, economic conditions, consumer demand and our competitors’ ability to achieve similar goals, will impact whether or not we are able to execute our growth strategy. Additionally, many of the markets in which we currently operate are either remaining flat or declining over time. If we are not able to gain additional market share, expand into new markets and/or increase our presence internationally, our operating results may be materially harmed.

Our annual and quarterly financial results are subject to significant fluctuations depending on various factors, many of which are beyond our control.

Our sales and operating results can vary significantly from quarter to quarter and year to year depending on various factors, many of which are beyond our control. These factors include:

• variations in the timing and volume of our sales;

• seasonality of our products;

• discretionary spending habits;

• the timing of expenditures in anticipation of future sales;

• sales promotions by us and our competitors;

• changes in competitive and economic conditions generally;

• changes in interest rates;

• changes in the cost or availability of our raw materials or labor; and

• foreign currency exposure.

As a result, our results of operations may decline quickly and significantly in response to changes in order patterns or rapid decreases in demand for our products. We anticipate that fluctuations in operating results will continue in the future.

Unfavorable weather conditions could hurt our sales and increase our inventory levels.

As a manufacturer of outdoor motorized equipment, our sales are affected by weather conditions. For example, lack of snowfall in any year in any particular region of the United States, Canada or Europe may

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adversely affect retail sales of snowmobiles in that region. In addition, sales of personal watercraft may be affected by increased rain during the summer. Further, sales of parts and accessories for our products are also influenced by weather conditions. We seek to minimize these effects by stressing pre-season sales and by shifting dealer inventories from one location to another with more advantageous weather conditions during the selling season. However, weather conditions could have a material adverse effect on our sales, inventory levels and resulting profitability.

Product liability, warranty and recall claims may materially affect our financial condition and damage our reputation.

We are engaged in a business which exposes us to claims for product liability and warranty claims in the event our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in property damage, personal injury or death. We have approximately 146 pending litigations, 70% of which are in the United States and about half of which consist of product liability cases. With respect to product liability claims which arose prior to the consummation of the Transactions, Bombardier agreed to indemnify us for certain amounts. Claims may arise in the future in excess of our indemnities and insurance coverage. In the future, we may not be able to adequately insure our product liability and warranty risk or the cost of doing so may be prohibitive. Adverse determination of material product liability and warranty claims made against us could have a material adverse effect on our financial condition and harm our reputation.

In addition, if any of our products are, or are alleged to be, defective, we may be required to participate in a recall of that product if the defect or alleged defect relates to safety. We have been the subject of numerous lawsuits for product liability claims related to fuel tanks for certain of our personal watercraft which were the subject of a recall and to the steering design of personal watercraft and anticipate future suits of this nature. These and other claims we face could be costly to us and require substantial management attention.

We have less control over the quality of products manufactured for us by others.

We have entered into and intend to enter into manufacturing agreements with third parties to produce some of our products which we market under our brand names. We have entered into agreements with a Taiwanese manufacturer to produce entry-level ATVs and related components under our brand. We have also entered into an agreement with a Japanese manufacturer to supply a substantial portion of our Johnson 4-stroke engines. We will have less control over the quality of production of these products. As these products will carry our name, any manufacturing defects would be associated with us and may harm our reputation and sales.

We may not effectively build the infrastructure previously provided to our business by Bombardier.

Prior to the consummation of the Transactions, we operated as the recreational products business of Bombardier within its operational and administrative infrastructure. As an independent company, we must provide our own services, including insurance, treasury and banking. In addition, we have become subject to the extensive reporting requirements under the indenture governing the notes, requiring the development of an independent financial management system. We may not be able to efficiently provide these services ourselves or find third-party providers of these services on a timely and cost-effective basis or at all. We do not have experience in providing the types of services we will be required to provide going forward and may incur substantial costs in doing so. We will not be able to operate successfully without establishing an independent operational and administrative infrastructure.

A downturn in general economic or business conditions, either nationally or internationally, could adversely affect our business.

Many of our products, including snowmobiles, ATVs, sport boats and personal watercraft, are considered to be discretionary purchases by our customers and, as a result, sales of these products tend to decline during

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periods of economic uncertainty. Accordingly, any significant decline in general economic conditions, including uncertainty regarding future economic prospects, could have a material adverse effect on our business, financial condition and results of operations. Recently, the global economy has been experiencing a severe economic downturn which has affected many of the markets in which we operate, negatively impacting our financial performance. Our business is also subject to changes in consumer preferences. There can be no assurance that interest in our products will continue to grow, or that we will be able to sustain current levels of production and sales, or to increase such levels. Any significant decline in the size of the market of any of our products as a result of a downturn in general economic conditions could have a material adverse effect on our business, financial condition and results of operations.

Compliance with existing and changing environmental and safety laws and regulations could increase our costs or restrict our business.

We are subject to extensive environmental and safety laws and regulations concerning, among other things, emissions and discharges to waters, air and land, the handling and disposal of hazardous and non-hazardous materials and wastes, and employee health and safety. Environmental risks and liabilities are inherent in many of our manufacturing operations and products. Future environmental liabilities may occur or environmental damages may result in future liabilities due to prior or present practices. From time to time, we have incurred and continue to incur material costs and obligations related to environmental compliance matters. Failure to comply with such laws and regulations could result in costs for corrective action, penalties or the imposition of additional liabilities or restrictions. Potential liabilities resulting from past or present practices cannot be estimated at this time and may be significant. Further, we have from time to time acquired other business or entities and we may be subject to claims based on successor liability with respect to the prior activities of entities or businesses we acquired. We are aware that there is or may be soil or groundwater contamination at certain of our facilities resulting from current or former operations. These matters are in various stages of investigation and may result in material costs.

Additionally, changes in environmental or other laws could require extensive changes in our operations or to our products. We cannot anticipate what the costs of compliance with these changes might be. New engine emission regulations are being phased in between 2000 and 2008 by the U.S. federal government, the State of California and the European Union and certain of our customers are subject to the noise reduction directive applicable to outdoor equipment sold in the European Union that became effective January 1, 2002. In addition, during the last legislative session, the Canadian Parliament considered a bill that, if enacted, would have allowed local cottagers’ associations to ban or impose restrictions on personal watercraft. This bill, or similar legislation, may be reintroduced in the future.

We cannot be certain, however, that identification of presently unidentified environmental conditions, more vigorous enforcement by regulatory agencies, enactment or more stringent laws and regulations or other unanticipated events will not arise in the future and give rise to additional material environmental liabilities which could have a material adverse effect on our business, financial condition or results of operations.

We may not always be able to terminate our relationships with particular dealers, which could limit our ability to improve our dealer network and could increase our costs.

We are subject to regulations and other restrictions on our ability to terminate our dealer relationships which prescribe the means by which we can terminate dealer relationships and impose penalties for failure to comply. There is currently litigation pending against us pursuant to the regulations with respect to certain dealers with whom we have terminated our relationship. Even if we prevail on these matters, we may spend a considerable amount of time and money to do so. These restrictions may also prevent or deter us from terminating dealer relationships that are unprofitable or otherwise undesirable to maintain.

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Our international operations subject us to additional risks, which risks and costs may differ in each country in which we do business, and may cause our profitability to decline.

We conduct our business in many countries. Our financial condition and results of operations may be adversely affected if the markets in which we compete are affected by changes in political, economic or other factors. These factors, over which we have no control, may include:

• recessionary or expansive trends in international markets;

• changing labor conditions and difficulties in staffing and managing our foreign operations;

• increases in the taxes we pay and other changes in applicable tax laws;

• legal and regulatory changes and the burdens and costs of our compliance with a variety of laws, including trade restrictions and tariffs;

• difficulties in obtaining and enforcing intellectual property rights;

• changes in inflation rates;

• changes in exchange rates and the imposition of restrictions on currency conversion or the transfer of funds; and

• political and economic instability.

Fluctuations in the value of the Canadian dollar in relation to other currencies may lead to lower revenues and earnings.

Exchange rate fluctuations could have an adverse effect on our results of operations. The majority of our revenue and the majority of our debt is in U.S. dollars while the majority of our cost of sales and operating expenses are in Canadian dollars and Euros. In addition, a portion of our sales and operating expenses are in currencies of other countries, including Norway, Brazil, Australia and Japan. Sales made outside Canada are denominated in the currency of the country in which the sale is made, and this currency could become less valuable prior to conversion to Canadian dollars as a result of exchange rate fluctuations. Unfavorable currency fluctuations could lead to increased prices to customers outside Canada, or could result in lower revenues for us, on a Canadian dollar basis, from such customers. The U.S. dollar exchange rate in relation to the Canadian dollar, for the twelve-month period from February 1, 2003 to January 31, 2004, decreased by 13.3% from 1.5290 to 1.3264.

For the purposes of financial reporting, any change in the value of the Canadian dollar against the U.S. dollar during a given financial reporting period would result in a foreign currency loss or gain on the translation of any U.S. cash and cash equivalents or U.S. dollar denominated debt into Canadian currency under GAAP. Consequently, our reported earnings under GAAP could fluctuate materially as a result of foreign exchange translation gains or losses.

Loss of key personnel or our inability to attract and retain new qualified personnel could hurt our business and inhibit our ability to operate and grow successfully.

Our success will continue to depend to a significant extent on our leadership team and other key management personnel as well as our ability to attract and retain qualified personnel to operate our manufacturing, marketing and distribution centers and international operations. The loss of these employees or our inability to recruit and retain qualified personnel could have a material adverse effect on our operating results.

Since we do not sell our products under long-term purchase commitments and may not correctly estimate demand, production delays or poor marketing judgment could diminish sales.

Our ability to predict future demand for our products and to timely develop new products to meet that demand will influence our performance. We plan annual production levels and long-term product development and introduction based on anticipated demand. For the majority of sales, we do not have long-term purchase

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commitments or non revocable orders. We rely on our own market assessment and regular communication with our dealers and other customers to anticipate the future volumes of purchase orders. Changes in product demand or delays in product delivery by us could impair our ability to achieve sales goals or maintain profitability.

Employment related matters such as unionization and pension plan obligations may affect our profitability.

Our facilities in Austria, Finland, Sweden and Norway are unionized. While we have positive labor relations in these locations, we have little control over the union activities in these areas and could face difficulties in the future. We and certain of our employees in Canada, including some of those at our Valcourt facility, are parties to a stability agreement concerning the terms of their employment. The stability agreement provides that employees classified as “permanent employees” may not be laid off except under specified circumstances. Additionally, these employees are entitled to receive a portion of their salary even if they are not working due to supply shortages or problems related to our business development. As a result of the stability agreement, our profit margins could be reduced in the event that we produce and sell less product but are required to continue to pay our employees at current levels.

We support several defined benefit pension plans in the United States, Canada and Europe. In Canada, pension assets are invested in accordance with legislative and/or regulatory requirements. In Europe, pension plans follow local legislative requirements and are typically unfunded. In the United States, the qualified defined benefit pension plans our employees participate in are retained by Bombardier, though we are responsible for accrued benefits under the non-qualified plan that arose prior to the consummation of the Transactions. In the event we were to experience shortfalls in our pension plans, due to economic conditions or otherwise, we would be obligated in Canada and may be obligated in other jurisdictions to fund these shortfalls. These obligations would divert sums which could be used to increase revenues or be contributed to marketing, research and development or other areas of our business.

Our historical and pro forma financial information may not be representative of our results as a separate company.

Our historical and pro forma financial information included in this prospectus may not reflect what our results of operations, financial position and cash flows would have been had we been a separate, stand-alone entity during the periods presented, or what our results of operations, financial position and cash flows will be in the future. Accordingly, our historical results of operations may not be indicative of our future operating or financial performance. See “Selected Historical Consolidated Financial Data,” “Unaudited Pro Forma Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Risks Related to the Exchange Offer

Your right to receive payments on the notes and the subsidiary guarantees will be junior to our existing senior debt and the existing senior debt of our subsidiary guarantors and all of our and their future senior debt.

The notes and the subsidiary guarantees are subordinated in right of payment to the prior payment in full of our and our subsidiary guarantors’ current and future senior debt, including our and their obligations under our senior secured credit facility. As a result of the subordination provisions of the notes, in the event of the bankruptcy, liquidation or dissolution of us or any subsidiary guarantor, our assets or the assets of the applicable subsidiary guarantor will be available to pay obligations under the notes and our other senior subordinated obligations only after all payments have been made on our senior debt or the senior debt of the applicable subsidiary guarantor. Sufficient assets may not remain after all of these payments have been made to make any payments on the notes and our other senior subordinated obligations, including payments of interest when due. As of January 31, 2004, we and our subsidiaries had approximately $371.4 million of senior debt outstanding to

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which the notes and the subsidiary guarantees would have been subordinated. In addition, the notes and subsidiary guarantees are effectively subordinated to all intercompany debt of non-guarantor subsidiaries pledged to our lenders pursuant to our senior secured credit facility. Also, all payments on the notes and the subsidiary guarantees are prohibited in the event of a payment default on our designated senior debt and, for limited periods, upon the occurrence of other defaults under our designated senior debt.

The notes and the subsidiary guarantees are effectively subordinated to all of our and our subsidiary guarantors’ secured debt and all debt of our non-guarantor subsidiaries.

The notes are not secured. The borrowings under our senior secured credit facility are secured by liens on substantially all of our and our subsidiary guarantors’ assets, including receivables, inventory, equipment, real estate, leases, licenses, patents, brand names, trademarks, contracts, securities and stock of those subsidiaries, as well as intercompany notes issued by certain of our non-guarantor subsidiaries and the capital stock of our non-guarantor subsidiaries, subject to certain exceptions agreed upon with our lenders and local law requirements. If we or any of the subsidiary guarantors declare bankruptcy, liquidate or dissolve, or if payment under our senior secured credit facility or any of our or their other secured debt is accelerated, the secured lenders would be entitled to exercise the remedies available to a secured lender under applicable law and will have a claim on those assets before the holders of the notes. As a result, the notes are effectively subordinated to our and our subsidiaries’ secured debt to the extent of the value of the assets securing that debt, and the holders of the notes would in all likelihood recover ratably less than the lenders of our and our subsidiaries’ secured debt in the event of our or their bankruptcy, liquidation or dissolution. As of January 31, 2004, we and the subsidiary guarantors had approximately $371.4 million of secured debt outstanding and $250.0 million of additional secured debt was available for borrowing under the revolving loan portion of our senior secured credit facility (excluding approximately $54.5 million of outstanding letters of credit).

In addition, the notes are structurally subordinated to all of the liabilities of our subsidiaries that do not guarantee the notes. In the event of a bankruptcy, liquidation or dissolution of any of the non-guarantor subsidiaries, holders of their debt, their trade creditors and holders of their preferred equity will generally be entitled to payment on their claims from assets of those subsidiaries before any assets are made available for distribution to us. Under some circumstances, the terms of the notes will permit our non-guarantor subsidiaries to incur additional specified debt up to U.S.$50.0 million. As of January 31, 2004, the non-guarantor subsidiaries had approximately $1.3 million of debt outstanding to which the notes would have been structurally subordinated. In addition, the notes and subsidiary guarantees will be effectively subordinated to all intercompany debt of non-guarantor subsidiaries pledged to our lenders pursuant to our senior secured credit facility.

For the combined year ended January 31, 2004, our non-guarantor subsidiaries had sales of $798.5 million.

Applicable statutes allow courts, under specific circumstances, to void the subsidiary guarantees of the notes.

Our creditors or the creditors of one or more subsidiary guarantors could challenge the subsidiary guarantees as fraudulent transfers, conveyances or preferences or on other grounds under applicable U.S. federal or state law, applicable Canadian federal or provincial law or applicable laws of other relevant jurisdictions and countries. The entering into of the subsidiary guarantees could be found to be a fraudulent transfer, conveyance or preference and declared void if a court were to determine that:

• a subsidiary guarantor delivered its subsidiary guarantee with the intent to hinder, delay or defraud its existing or future creditors;

• the subsidiary guarantor did not receive fair consideration for the delivery of the subsidiary guarantee; or

• the subsidiary guarantor was insolvent at the time it delivered the subsidiary guarantee.

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To the extent a court voids a subsidiary guarantee as a fraudulent transfer, preference or conveyance or holds it unenforceable for any other reason, holders of notes would cease to have any direct claim against the guarantor that delivered that subsidiary guarantee. If a court were to take this action, the subsidiary guarantor’s assets would be applied first to satisfy the subsidiary guarantor’s liabilities, including trade payables, and preferred stock claims, if any, before any payment in respect of the subsidiary guarantee could be made. We cannot assure you that a subsidiary guarantor’s remaining assets would be sufficient to satisfy the claims of the holders of notes relating to any voided portions of the subsidiary guarantees.

We may not have the funds to purchase the notes upon a change of control as required by the indenture for the notes.

If we were to experience a change of control as described under “Description of the Exchange Notes,” we would be required to make an offer to purchase all of the notes then outstanding at 101% of their principal amount, plus accrued and unpaid interest to the date of purchase. The source of funds for any purchase of the notes would be our available cash or cash generated from other sources, including borrowings, sales of assets, sales of equity or funds provided by our existing or new equityholders. We cannot assure you that any of these sources will be available or sufficient to make the required purchase of the notes, and restrictions in our new credit facility may not allow such purchases. Upon the occurrence of a change of control event, we may seek to refinance the debt outstanding under our senior secured credit facility and the notes. However, it is possible that we will not be able to complete such refinancing on commercially reasonable terms or at all. In such event, we would not have the funds necessary to finance the required change of control offer. See “Description of the Exchange Notes—Change of Control.”

In addition, under our senior secured credit facility, a change of control would be an event of default. Any future credit agreement or other agreements relating to our senior debt to which we become a party may contain similar provisions. Our failure to purchase the notes upon a change of control under the indenture would constitute an event of default under the indenture. This default would, in turn, constitute an event of default under our senior secured credit facility and may constitute an event of default under future senior debt, any of which may cause the related debt to be accelerated after any applicable notice or grace periods. If debt were to be accelerated, we might not have sufficient funds to purchase the notes and repay the debt.

We are controlled by our Sponsors, whose interests in our business may be different from yours.

As a result of the Transactions, affiliates of Bain Capital, Beaudier Group and Caisse de depot et placement du Quebec own, directly or indirectly, substantially all of our outstanding common stock and together have the ability to control our affairs and policies. Additionally, our Sponsors and certain affiliates have entered into shareholder arrangements with respect to, among other things, the voting of our parent’s capital stock, election of directors and other actions to be taken by our parent and our board of directors, including amendments to our certificate of incorporation and by-laws and approval of significant corporate transactions. The interests of our Sponsors and their affiliates will likely differ from yours in material respects. For example, these shareholders may have an interest in pursuing acquisitions, divestitures or other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to the holders of the notes. See “Security Ownership of Certain Beneficial Owners and Management” and “Certain Related Party Transactions.”

Because several of our directors and officers reside in Canada, you may not be able to effect service of process upon them or us, or enforce civil liabilities against them or us, under the U.S. federal securities laws.

We are a corporation organized under the laws of Canada. Some of our directors and officers and some of the experts named in this prospectus are residents of Canada or other jurisdictions outside of the United States and all or a substantial portion of our assets and their assets are located outside of the United States. As a result, it

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may be difficult for holders of notes to effect service of process upon us or such persons within the United States or to enforce against us or them in the United States judgments of courts of the United States predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States. In addition, we have been advised by our Canadian counsel that there is doubt as to the enforceability in Canada of liabilities predicated solely upon U.S. federal securities law against us, our directors, controlling persons and officers and the experts named in this prospectus who are not residents of the United States, in original actions or in actions for enforcements of judgments of U.S. courts. For more information, see “Enforceability of Civil Liabilities Against Foreign Persons.”

You may have difficulty enforcing U.S. bankruptcy laws and your rights as a creditor may be limited under the bankruptcy laws of Canada or other jurisdictions.

Under bankruptcy laws in the United States, courts have jurisdiction over a debtor’s property wherever it is located, including property situated in other countries. However, courts outside of the United States may not recognize the U.S. bankruptcy court’s jurisdiction. Accordingly, you may have difficulty administering a U.S. bankruptcy case involving us, because we have property located outside of the United States. Any orders or judgments of a bankruptcy court in the United States may not be enforceable against us with respect to our property located outside the United States. Similar difficulties may arise in administering bankruptcy cases in foreign jurisdictions.

Under the indenture governing the notes, the rights of the trustee to enforce remedies may be significantly impaired if we seek the benefit of the restructuring provisions of applicable Canadian federal bankruptcy, insolvency and other restructuring legislation. For example, both the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada) contain provisions enabling an “insolvent person” to obtain a stay of proceedings against its creditors and others and to prepare and file a proposal or plain of compromise or arrangement for consideration by all or some of its creditors to be voted on by the various classes of its creditors. The restructuring plan or proposal, if accepted by the requisite majorities of creditors and if approved by the court, may permit the insolvent debtor to retain possession and administration of its property, even though it may be in default under the applicable debt instrument.

The powers of the courts under the Bankruptcy and Insolvency Act (Canada) and particularly under the Companies’ Creditors Arrangement Act (Canada) have been exercised broadly to protect a restructuring entity from actions taken by creditors and other parties. Accordingly, we cannot predict whether payments under the notes would be made following commencement of or during such a proceeding, whether or when the trustee could exercise its rights under the indenture governing the notes, whether your claims could be compromised or extinguished under such a proceeding or whether and to what extent holders of the notes would be compensated for delays in payment, if any, of principal and interest.

There is no public market for the notes, and we cannot be sure that a market for the notes will develop.

The exchange notes will constitute a new issue of securities for which there is currently no active trading market. If any of the notes are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities and other factors, including general economic conditions, our financial condition, performance and prospects, and prospects for companies in our industry in general. In addition, the liquidity of the trading market in the notes and the market prices quoted for the notes may be adversely affected by changes in the overall market for high-yield securities.

The initial purchasers have advised us that they presently intend to make a market in the exchange notes as permitted by applicable law. The initial purchasers are not obligated, however, to make a market in the notes and any such market-making may be discontinued at any time without notice. As a result, we cannot assure you as to the development or liquidity of any market for the exchange notes. In addition, such market-making activity will be subject to the limitations imposed by the U.S. Securities Exchange Act of 1934, and may be limited during the exchange offer to exchange the notes described below.

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If you do not exchange your old notes, they may be difficult to resell.

It may be difficult for you to sell old notes that are not exchanged in the exchange offer, since any old notes not exchanged will remain subject to the restrictions on transfer provided for in Rule 144 under the Securities Act. These restrictions on transfer of your old notes exist because we issued the old notes pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. In general, absent registration under or exemption from the Securities Act, your transfer of old notes will continue to be restricted by the resale limitations of Rule 144 and applicable state securities laws. We do not intend to register the old notes under the Securities Act.

Unless you are an affiliate of us within the meaning of Rule 405 under the Securities Act, you may offer for resale, resell or otherwise transfer exchange notes without compliance with the registration and prospectus delivery provisions of the Securities Act, so long as you acquired the exchange notes in the ordinary course of business and have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. If you tender your old notes for the purpose of participating in a distribution of the exchange notes, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

To the extent that any old notes are tendered and accepted in the exchange offer, the trading market, if any, for the old notes that remain outstanding after the exchange offer would be adversely affected due to a reduction in market liquidity.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless we indicate otherwise, financial information in this prospectus has been prepared in accordance with Canadian generally accepted accounting principles, or Canadian GAAP. Canadian GAAP differs in some respects from United States generally accepted accounting principles, or U.S. GAAP, and thus our financial statements may not be comparable to the financial statements of U.S. companies. The principal differences as they apply to us are summarized in Notes 22 and 26 to the audited financial statements of our predecessor company and our audited consolidated financial statements, respectively, included herein.

We present our financial information in Canadian dollars. In this prospectus, except where we indicate, all references to “U.S.$” refer to U.S. dollars and all references to “$” refer to Canadian dollars. This prospectus contains a translation of some Canadian dollar amounts into U.S. dollars at specified exchange rates solely for your convenience. See “Exchange Rate Data” below for information about the rates of exchange between Canadian dollars and U.S. dollars for the fiscal years ended January 31, 2000, 2001, 2002 and 2003, the period from February 1, 2003 to December 18, 2003, the period from December 19, 2003 to January 31, 2004 and the most recent six months.

EXCHANGE RATE DATA

The following table sets forth certain exchange rates based upon the noon spot rate as determined by trades in the Toronto interbank market. Such rates are set forth as U.S. dollars per Canadian dollar and are the inverse of the rate quoted by the Bank of Canada for Canadian dollars per U.S.$1.00. On September 2, 2004, the noon spot rate was $1.00 per U.S.$0.76927.

	Year ended January 31,				For the Period February 1, 2003 to December 18,	For the Period December 19, 2003 to January 31,	Three Months Ended April 30,
	2000	2001	2002	2003	2003	2004	2003	2004
Low	0.65424	0.64131	0.61989	0.62073	0.65312	0.74644	0.65312	0.72955
High	0.69730	0.69382	0.66952	0.66181	0.77143	0.78790	0.69759	0.76458
Period end	0.68908	0.66667	0.62802	0.65402	0.75233	0.75392	0.69759	0.73865
Average rate	0.67679	0.67097	0.64160	0.63912	0.72472	0.76383	0.67506	0.72955
	2004
	April	May	June	July	August	September
Low	0.72955	0.71592	0.73046	0.74918	0.75041	0.76523
High	0.76377	0.73654	0.74360	0.76458	0.77143	0.76947

The average rate is derived by taking the average of the noon buying rate on the last day of each month during the relevant period.

Canada has no system of exchange controls. There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian company to non-resident investors. There are no laws of Canada or exchange restrictions affecting the remittance of dividends, interest, royalties or similar payments to non-resident holders of our securities, except as described under “Certain Tax Considerations—Canadian Federal Income Tax Considerations.”

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ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS

We are a corporation organized under the laws of Canada. Some of our directors, controlling persons and officers and certain of the experts named in this prospectus are not residents of the United States, and all or a substantial portion of their assets and all or a substantial portion of our assets are located outside the United States. We have agreed, in accordance with the terms of the indenture under which the notes were issued, to accept service of process in any suit, action or proceeding with respect to the indenture or the notes brought in any federal or state court located in New York City by an agent designated for such purpose, and to submit to the jurisdiction of such courts in connection with such suits, actions or proceedings. However, it may be difficult for you to effect service of process within the United States upon us or our directors, controlling persons, officers and experts who are not residents of the United States or to realize in the United States upon judgments of United States courts based upon the civil liability under the federal securities laws of the United States. We have been advised by our Canadian counsel that there is doubt as to the enforceability in Canada against us or against our directors, controlling persons, officers or experts, who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S. courts, of liabilities based solely upon the federal securities laws of the United States.

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. All statements contained in this document other than historical information are forward-looking statements. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as “may,” “expects,” “should,” or similar expressions. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:

• Our high degree of leverage and significant debt service obligations;

• Restrictions under the indenture governing the notes and under our senior secured credit facility;

• Changes in interest rates;

• Changes in foreign currency valuations and economic conditions in the countries where we do business;

• Our ability to introduce new, or improve existing, products;

• Our failure to protect our trademarks, patents and other intellectual property rights;

• Changes in the price of raw materials;

• Interruptions in deliveries of raw materials or finished goods;

• Our ability to effectively compete and changes in competition or other trends in the industries in which we compete;

• Our ability to operate as a stand-alone business;

• Current and future litigation; and

• Acceptance by our customers of new products we develop or acquire.

Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. We do not intend, and do not undertake, any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

You should review carefully the section captioned “Risk Factors” in this prospectus for a more complete discussion of the risks of an investment in the notes.

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TRADEMARKS AND TRADE NAMES

We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. In addition, our name, logo and website name and address are our service marks or trademarks. Each trademark, trade name or service mark by any other company appearing in this prospectus belongs to its holder. Some of the more important trademarks that we own or have rights to use include Ski-Doo^®, Lynx^™, Sea-Doo^®, Johnson^®, Evinrude^® and Rotax^™. In addition, we have entered into a trademark license agreement whereby we will have the right to continue to use certain Bombardier marks.

MARKET AND INDUSTRY DATA

Market data used throughout this prospectus was obtained from internal company surveys and various trade associations which monitor the industries in which we compete. Neither we nor any of the initial purchasers have independently verified this market data. Similarly, internal company surveys, while believed by us to be reliable, have not been verified by any independent sources. While we are not aware of any misstatements regarding any industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under “Risk Factors” in this prospectus. Throughout the prospectus, references to “North America” or the “North American market” refer to the combined U.S. and Canadian market, references to “Europe” or the “European market” exclude Russia and references to “sport boats” refer to what are commonly known in the industry as jet boats. Also, references to market data for “model year,” when referring to snowmobiles, refer to the 12-months ended March 31 for North America, and to the 12-months ended June 30 for Europe, when referring to personal watercraft and jet boats, refer to the 12-months ended September 30, and when referring to outboard engines, refer to the 12-months ended June 30, in each case, for the year indicated. The market data for model years for our other businesses are measured by the calendar year. In addition, all market information refers to retail sales markets of the applicable business or segment and, unless otherwise indicated, all market share data is calculated as a percentage of units sold in the retail market.

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THE TRANSACTIONS

On December 2, 2003, we entered into a purchase agreement with Bombardier pursuant to which we acquired Bombardier’s recreational products business for a purchase price of approximately $960.0 million (comprised of $910.0 million in cash and $50.0 million face amount of redeemable preferred shares of our parent), subject to adjustment in accordance with the terms of the purchase agreement. In connection with the acquisition, Bombardier agreed to reorganize and consolidate these assets and liabilities into several direct and indirect subsidiaries. We consummated the Transactions on December 18, 2003. Upon the consummation of the Transactions, we, directly or indirectly, purchased these subsidiaries of Bombardier and related assets.

In connection with the acquisition, our Sponsors and certain members of our management contributed $310.0 million in exchange for common equity of our parent and our parent issued to Bombardier an aggregate $50.0 million face amount of 6.0% redeemable preferred shares. Our parent contributed the proceeds of this equity investment to us in return for common and redeemable preferred shares in our company. In addition, the acquisition was primarily financed on the closing date by (i) approximately $372.2 million (U.S.$280.0 million) under our senior secured credit facility, consisting of a term loan borrowing by us of approximately $260.5 million (U.S.$196.0 million) and a term loan borrowing by a wholly-owned U.S. subsidiary of ours of approximately $111.7 million (U.S.$84.0 million); and (ii) the issuance of approximately $265.8 million (U.S.$200.0 million) of the old notes to the initial purchasers. As a result of the consummation of the Transactions, our Sponsors and management own 100% of the outstanding common stock of our parent.

The chart below summarizes our ownership and corporate structure as a result of the consummation of the Transactions:

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THE EXCHANGE OFFER

Purpose and Effect

Concurrently with the sale of the old notes on December 18, 2003, we entered into a registration rights agreement with the initial purchasers of the old notes, which requires us to file a registration statement under the Securities Act with respect to the exchange notes and, upon the effectiveness of the registration statement, offer to the holders of the old notes the opportunity to exchange their old notes for a like principal amount of exchange notes. The exchange notes will be issued without a restrictive legend and generally may be reoffered and resold without registration under the Securities Act. The registration rights agreement further provides that we must cause the registration statement to be declared effective within 270 days of the issue date of the old notes and must consummate the exchange offer within 300 days after the issue date.

Except as described below, upon the completion of the exchange offer, our obligations with respect to the registration of the old notes and the exchange notes will terminate. A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part, and this summary of the material provisions of the registration rights agreement does not purport to be complete and is qualified in its entirety by reference to the complete registration rights agreement. As a result of the timely filing and the effectiveness of the registration statement, we will not have to pay certain liquidated damages on the old notes provided in the registration rights agreement. Following the completion of the exchange offer, holders of old notes not tendered will not have any further registration rights other than as set forth in the paragraphs below, and the old notes will continue to be subject to certain restrictions on transfer. Additionally, the liquidity of the market for the old notes could be adversely affected upon consummation of the exchange offer. See “Risk Factors—If you do not properly tender your old notes, your ability to transfer your old notes will be adversely affected.”

In order to participate in the exchange offer, a holder must represent to us, among other things, that:

• the exchange notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the holder;

• the holder is not engaging in and does not intend to engage in a distribution of the exchange notes;

• the holder does not have an arrangement or understanding with any person to participate in the distribution of the exchange notes;

• the holder is not an “affiliate,” as defined under Rule 405 under the Securities Act, of Bombardier Recreational Products Inc. or any subsidiary guarantor; and

• if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for old notes that were acquired a result of market-making or other trading activities, then the holder will deliver a prospectus in connection with any resale of such exchange notes.

Under certain circumstances specified in the registration rights agreement, we may be required to file a “shelf” registration statement for a continuous offer in connection with the old notes pursuant to Rule 415 under the Securities Act.

Based on an interpretation by the SEC’s staff set forth in no-action letters issued to third parties unrelated to us, we believe that, with the exceptions set forth below, exchange notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by the holder of exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act, unless the holder:

• is an “affiliate,” within the meaning of Rule 405 under the Securities Act, of Bombardier Recreational Products Inc. or any subsidiary guarantor;

• is a broker-dealer who purchased old notes directly from us for resale under Rule 144A or Regulation S or any other available exemption under the Securities Act;

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• acquired the exchange notes other than in the ordinary course of the holder’s business;

• has an arrangement with any person to engage in the distribution of the exchange notes; or

• is prohibited by any law or policy of the SEC from participating in the exchange offer.

Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes cannot rely on this interpretation by the SEC’s staff and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange note. See “Plan of Distribution.” Affiliates and broker-dealers who acquired old notes directly from us and not as a result of market making activities or other trading activities may not rely on the staff’s interpretations discussed above or participate in the exchange offer, and must comply with the prospectus delivery requirements of the Securities Act in order to sell the old notes.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on                  , 2004, or such date and time to which we extend the offer. We will promptly issue $1,000 in principal amount of exchange notes in exchange for each $1,000 principal amount of old notes accepted in the exchange offer. Holders may tender some or all of their old notes pursuant to the exchange offer. However, old notes may be tendered only in integral multiples of $1,000 in principal amount.

The exchange notes will evidence the same debt as the old notes and will be issued under the terms of, and entitled to the benefits of, the indenture relating to the old notes.

As of the date of this prospectus, U.S.$200.0 million in aggregate principal amount of old notes were outstanding, and there was one registered holder, a nominee of the Depository Trust Company. This prospectus, together with the letter of transmittal, is being sent to the registered holder and to others believed to have beneficial interests in the old notes. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC promulgated under the Exchange Act.

We will be deemed to have accepted validly tendered old notes when and if we have given oral or written notice thereof to U.S. Bank, National Association, the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth under the heading “—Conditions to the Exchange Offer” or otherwise, certificates for any such unaccepted old notes will be returned, without expense, to the tendering holder of those old notes promptly after the expiration date unless the exchange offer is extended.

Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes in the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, applicable to the exchange offer. See “—Fees and Expenses.”

Expiration Date; Extensions; Amendments

The expiration date shall be 5:00 p.m., New York City time, on                  , 2004, unless we, in our sole discretion, extend the exchange offer, in which case the expiration date shall be the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we will notify the exchange agent and each registered holder of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next

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business day after the previously scheduled expiration date and will also disseminate notice of any extension by press release or other public announcement prior to 9:00 a.m., New York City time. We reserve the right, in our sole discretion:

• to delay accepting any old notes, to extend the exchange offer or, if any of the conditions set forth under “—Conditions to the Exchange Offer” shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of that delay, extension or termination to the exchange agent, or

• to amend the terms of the exchange offer in any manner.

In the event that we make a fundamental change to the terms of the exchange offer, we will file a post-effective amendment to the registration statement. In such event, we will generally be required to extend the exchange offer so that at least five business days remain in the exchange offer after the effective date of such change.

Procedures for Tendering

Only a holder of old notes may tender the old notes in the exchange offer. Except as set forth under “—Book-Entry Transfer,” to tender in the exchange offer a holder must complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, have the signatures on the letter of transmittal guaranteed if required by the letter of transmittal and mail or otherwise deliver the letter of transmittal or copy to the exchange agent prior to the expiration date. In addition:

• certificates for the old notes must be received by the exchange agent along with the letter of transmittal prior to the expiration date, or

• a timely confirmation of a book-entry transfer, or a book-entry confirmation, of the old notes, if that procedure is available, into the exchange agent’s account at The Depository Trust Company, which we refer to as the book-entry transfer facility, following the procedure for book-entry transfer described below, must be received by the exchange agent prior to the expiration date, or you must comply with the guaranteed delivery procedures described below.

To be tendered effectively, the letter of transmittal and the required documents must be received by the exchange agent at the address set forth under “—Exchange Agent” prior to the expiration date.

Your tender, if not withdrawn prior to 5:00 p.m., New York City time, on the expiration date, will constitute an agreement between you and us in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal.

The method of delivery of old notes and the letter of transmittal and all other required documents to the exchange agent is at your election and risk. Instead of delivery by mail, it is recommended that you use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the exchange agent before the expiration date. No letter of transmittal or old notes should be sent to us. You may request your broker, dealer, commercial bank, trust company or nominee to effect these transactions for you.

Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on the beneficial owner’s behalf. If the beneficial owner wishes to tender on its own behalf, the beneficial owner must, prior to completing and executing the letter of transmittal and delivering the owner’s old notes, either make appropriate arrangements to register ownership of the old notes in the beneficial owner’s name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time.

Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act unless old notes tendered pursuant thereto are tendered:

• by a registered holder who has not completed the box entitled “Special Registration Instruction” or “Special Delivery Instructions” on the letter of transmittal, or

• for the account of an eligible guarantor institution.

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If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by any eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an eligible guarantor institution.

If the letter of transmittal is signed by a person other than the registered holder of any old notes listed in the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as that registered holder’s name appears on the old notes.

If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers persons should so indicate when signing, and evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal unless waived by us.

All questions as to the validity, form, eligibility, including time of receipt, acceptance, and withdrawal of tendered old notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all old notes not properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent, nor any other person shall incur any liability for failure to give that notification. Tenders of old notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, promptly following the expiration date, unless the exchange offer is extended.

In addition, we reserve the right in our sole discretion to purchase or make offers for any old notes that remain outstanding after the expiration date or, as set forth under “—Conditions to the Exchange Offer,” to terminate the exchange offer and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions, or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer.

In all cases, issuance of exchange notes for old notes that are accepted for exchange in the exchange offer will be made only after timely receipt by the exchange agent of certificates for such old notes or a timely book-entry confirmation of such old notes into the exchange agent’s account at the book-entry transfer facility, a properly completed and duly executed letter of transmittal or, with respect to The Depository Trust Company and its participants, electronic instructions in which the tendering holder acknowledges its receipt of and agreement to be bound by the letter of transmittal, and all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer or if old notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering holder or, in the case of old notes tendered by book-entry transfer into the exchange agent’s account at the book-entry transfer facility according to the book-entry transfer procedures described below, those non-exchanged old notes will be credited to an account maintained with that book-entry transfer facility, in each case, promptly after the expiration or termination of the exchange offer.

Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where those old notes were acquired by such broker-dealer as a result of market making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes. See “Plan of Distribution.”

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Book-Entry Transfer

The exchange agent will make a request to establish an account with respect to the old notes at the book-entry transfer facility for purposes of the exchange offer within two business days after the date of this prospectus, and any financial institution that is a participant in the book-entry transfer facility’s systems may make book-entry delivery of old notes being tendered by causing the book-entry transfer facility to transfer such old notes into the exchange agent’s account at the book-entry transfer facility in accordance with that book-entry transfer facility’s procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at the book-entry transfer facility, the letter of transmittal or copy of the letter of transmittal, with any required signature guarantees and any other required documents, must, in any case other than as set forth in the following paragraph, be transmitted to and received by the exchange agent at the address set forth under “—Exchange Agent” on or prior to the expiration date or the guaranteed delivery procedures described below must be complied with.

The Depository Trust Company’s Automated Tender Offer Program is the only method of processing exchange offers through The Depository Trust Company. To accept the exchange offer through the Automated Tender Offer Program, participants in The Depository Trust Company must send electronic instructions to The Depository Trust Company through The Depository Trust Company’s communication system instead of sending a signed, hard copy letter of transmittal. The Depository Trust Company is obligated to communicate those electronic instructions to the exchange agent. To tender old notes through the Automated Tender Offer Program, the electronic instructions sent to The Depository Trust Company and transmitted by The Depository Trust Company to the exchange agent must contain the character by which the participant acknowledges its receipt of and agrees to be bound by the letter of transmittal.

Guaranteed Delivery Procedures

If a registered holder of the old notes desires to tender old notes and the old notes are not immediately available, or time will not permit that holder’s old notes or other required documents to reach the exchange agent prior to 5:00 p.m., New York City time, on the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if:

• the tender is made through an eligible guarantor institution;

• prior to 5:00 p.m., New York City time, on the expiration date, the exchange agent receives from that eligible guarantor institution a properly completed and duly executed letter of transmittal or a facsimile of a duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, by telegram, telex, fax transmission, mail or hand delivery, setting forth the name and address of the holder of old notes and the amount of the old notes tendered and stating that the tender is being made by guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, will be deposited by the eligible guarantor institution with the exchange agent; and

• the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery.

Withdrawal Rights

Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date.

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For a withdrawal of a tender of old notes to be effective, a written or, for The Depository Trust Company participants, electronic Automated Tender Offer Program transmission, notice of withdrawal, must be received by the exchange agent at its address set forth under “—Exchange Agent” prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must:

• specify the name of the person having deposited the old notes to be withdrawn, whom we refer to as the depositor;

• identify the old notes to be withdrawn, including the certificate number or numbers and principal amount of such old notes;

• be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee register the transfer of such old notes into the name of the person withdrawing the tender; and

• specify the name in which any such old notes are to be registered, if different from that of the depositor.

All questions as to the validity, form, eligibility and time of receipt of such notices will be determined by us, whose determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange, but which are not exchanged for any reason, will be returned to the holder of those old notes without cost to that holder promptly after withdrawal, rejection of tender, or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures under “—Procedures for Tendering” at any time on or prior to the expiration date.

Conditions to the Exchange Offer

Notwithstanding any other provision of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time before the acceptance of those old notes for exchange or the exchange of the exchange notes for those old notes, if the exchange offer violates applicable law, any applicable interpretation of securities regulations by the staff of the SEC or any order of any governmental agency or court of competent jurisdiction.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any of those rights and each of those rights shall be deemed an ongoing right which may be asserted at any time and from time to time prior to the expiration of the exchange offer.

In addition, we will not accept for exchange any old notes tendered, and no exchange notes will be issued in exchange for those old notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939. In any of those events we are required to use every reasonable effort to obtain the withdrawal of any stop order at the earliest possible time.

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Exchange Agent

All executed letters of transmittal should be directed to the exchange agent. U.S. Bank, National Association has been appointed as exchange agent for the exchange offer. Questions, requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows:

By Registered or Certified Mail; Hand Delivery or Overnight Courier:

U.S. Bank, National Association

West Side Flats Operations Center

60 Livingston Avenue

St. Paul, Minnesota 55107

Reference: Bombardier Recreational Products Inc.

By Facsimile (Eligible Institutions Only):

(651) 495-8158

Reference: Bombardier Recreational Products Inc.

For Information or Confirmation by Telephone:

(800) 934-6802

Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand or by overnight delivery service.

Fees and Expenses

We will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail; however, additional solicitations may be made in person or by telephone by our officers and employees. The estimated cash expenses to be incurred in connection with the exchange offer will be paid by us and will include fees and expenses of the exchange agent, accounting, legal, printing and related fees and expenses.

Transfer Taxes

Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection with that tender or exchange, except that holders who instruct us to register exchange notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax on those old notes.

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USE OF PROCEEDS

This exchange offer is intended to satisfy our obligations under the registration rights agreement, dated December 18, 2003, by and among Bombardier Recreational Products Inc., the subsidiary guarantors party thereto, and the initial purchasers of the old notes. We will not receive any proceeds from the issuance of the exchange notes in the exchange offer. Instead, we will receive in exchange old notes in like principal amount. We will retire or cancel all of the old notes tendered in the exchange offer.

On December 18, 2003, we issued and sold the old notes. We used the proceeds from the offering of the old notes, borrowings under the senior secured credit facility, and a cash equity investment by our Sponsors to finance the Transactions and pay related fees and expenses.

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CAPITALIZATION

The following table sets forth our cash and total capitalization as of April 30, 2004. The information in this table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and accompanying notes thereto appearing elsewhere in this prospectus.

	April 30, 2004 (1)
Cash	$	152.5
Long-term debt (including current portion of $5.2 million):
Senior secured credit facility		383.8
Senior subordinated notes		274.1
Other		3.5
Total long-term debt		661.4
Redeemable preferred shares		44.2
Shareholder’s equity		260.3
Total capitalization	$	965.9

(1) Our cash and total capitalization is presented as of April 30, 2004, the most recent balance sheet date presented in this prospectus. Subsequent to April 30, 2004, we have not incurred any additional long-term debt and no other significant transactions occurred that impact our capitalization.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

Our predecessor for the period from February 1, 1999 to December 18, 2003 is the recreational products business of Bombardier. We completed the Transactions as of December 18, 2003, and as a result of adjustments to the carrying value of assets and liabilities pursuant to the acquisition of the recreational products business that was part of the Transactions, the financial position and results of operations for periods subsequent to the Transactions may not be comparable to those of our predecessor company.

The selected historical financial data as at and for the year ended January 31, 2000 is derived from the unaudited financial statements of our predecessor company not included in this prospectus, and as at January 31, 2001 and 2002 and for the year ended January 31, 2001, is derived from the audited financial statements of our predecessor company not included in this prospectus. The selected historical financial data as at January 31, 2003 and December 18, 2003, and for each of the years in the two-year period ended January 31, 2003, and the period from February 1, 2003 to December 18, 2003 is derived from the audited financial statements of our predecessor company, which are included elsewhere in this prospectus together with the auditors’ report thereon. The selected historical consolidated financial data as at January 31, 2004 and for the period from December 19, 2003 to January 31, 2004 is derived from our audited consolidated financial statements, which are included elsewhere in this prospectus with the auditor’s report thereon. Data for the period from February 1, 2003 to December 18, 2003 has been added to data for the period from December 19, 2003 to January 31, 2004 to arrive at a combined year ended January 31, 2004. Summary historical financial data as at and for the three-month period ended April 30, 2004 and for our predecessors three-month period ended April 30, 2003 have been derived from our unaudited interim consolidated financial statements, which are included elsewhere in this prospectus.

You should read the information contained in this table in conjunction with “Unaudited Pro Forma Consolidated Financial Data”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the audited financial statements and the accompanying notes thereto of our predecessor company included elsewhere in this prospectus, and our audited consolidated financial statements and the accompanying notes thereto included elsewhere in this prospectus. The financial statements were prepared in accordance with Canadian GAAP, which differs in certain significant respects from U.S. GAAP. These differences are described in Note 22, Note 26 and Note 20 to the audited financial statements of our predecessor company, our audited consolidated financial statements and our unaudited interim consolidated financial statements, respectively, included elsewhere in this prospectus.

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	Predecessor															Successor						Predecessor			Successor
	Fiscal Year Ended January 31,												For the Period February 1, 2003 to December 18, 2003			For the Period December 19, 2003 to January 31, 2004			Combined Twelve Months Ended January 31, 2004			Three Months Ended April 30, 2003			Three Months Ended April 30, 2004
	2000			2001			2002			2003
	($ in millions, except ratios)
Canadian GAAP
Statement of Income Data:
Total Revenues(a)	$	1,457.7		$	1,671.2		$	2,020.0		$	2,476.3		$	2,147.1		$	345.0		$	2,492.1		$	515.8		$	630.9
Cost of sales		1,187.7			1,284.5			1,560.5			1,913.3			1,738.3			318.5			2,056.8			433.2			540.8
Gross profit		270.0			386.7			459.5			563.0			408.8			26.5			435.3			82.6			90.1
Operating expenses
Selling and marketing		90.5			97.8			136.4			166.3			147.2			18.6			165.8			45.4			40.5
Research and development		71.1			74.1			100.4			106.3			97.2			13.3			110.5			29.4			30.4
General and administrative		72.0			106.1			128.3			120.6			115.7			7.9			123.6			32.1			31.3
Total operating expenses		233.6			278.0			365.1			393.2			360.1			39.8			399.9			106.9			102.2
Operating profit (loss)		36.4			108.7			94.4			169.8			48.7			(13.3	)		35.4			(24.3	)		(12.1	)
Interest expense (income) and other		2.8			(0.4	)		4.1			4.9			3.2			6.4			9.6			1.0			12.2
Accretion in carrying value of redeemable preferred shares		—			—			—			—			—			0.5			0.5			—			1.0
Net loss on derivative financial instruments		—			—			—			—			—			4.5			4.5			—			—
Unrealized foreign exchange loss on long-term debt		—			—			—			—			—			(1.3	)		(1.3	)		—			21.2
Income (loss) before income taxes		33.6			109.1			90.3			164.9			45.5			(23.4	)		22.1			(25.3	)		(46.5	)
Income tax expense (recovery)		10.3			34.6			23.7			50.1			15.3			(5.9	)		9.4			(8.8	)		(10.8	)
Net income (loss)	$	23.3		$	74.5		$	66.6		$	114.8		$	30.2		$	(17.5	)	$	12.7		$	(16.5	)	$	(35.7	)
Other Operating Data:
EBITDA(b)	$	99.5		$	171.2		$	164.2		$	267.2		$	140.3		$	(2.4	)	$	137.9		$	2.2		$	(3.0	)
Depreciation and amortization		63.1			62.5			69.8			97.4			91.6			14.1			105.7			26.5			30.3
Additions to property, plant and equipment		45.9			62.9			194.7			97.7			73.8			21.0			94.8			17.0			8.7
Cash flows provided by (used in):
Operating activities					173.0			177.9			215.4			(81.1	)		79.6						(150.0	)		(29.2	)
Investing activities					(72.2	)		(359.4	)		(96.4	)		(75.4	)		(778.2	)					(14.0	)		(15.1	)
Financing activities					(108.4	)		192.7			(118.2	)		247.6			895.9						150.0			3.8
Ratio of earnings to fixed charges(c)		4.5	x		18.6	x		8.5	x		12.8	x		4.8	x		—			2.1	x					—
Balance Sheet Data (at end of period):
Cash	$	21.4		$	11.1		$	17.0		$	28.7		$	140.2		$	196.2									152.5
Working capital(d)		(39.3	)		(56.5	)		(289.0	)		(287.3	)		166.9			225.3									231.0
Total assets(e)		615.1			693.4			1,127.7			1,134.9			1,328.5			1,795.6									1,736.1
Total long-term debt		22.4			9.0			5.9			3.5			3.9			640.0									661.4
Redeemable preferred shares		—			—			—			—			—			43.2									44.2
Share capital		—			—			—			—			—			304.5									311.0
Total net equity		173.6			142.3			178.1			170.2			577.8			289.0									260.3
U.S. GAAP
Statement of Income Data:
Net income (loss)							$	53.4		$	132.8		$	37.8		$	(23.7	)	$	14.1		$	0.5		$	(33.9	)
Other Operating Data:
EBITDA(b)(f)							$	142.6		$	290.8		$	148.7		$	(11.7	)	$	137.0		$	26.7		$	(3.0	)
Ratio of earnings to fixed charges(c)								6.9	x		14.7	x		5.8	x		—			2.3	x					—
Balance Sheet Data (at end of period):
Total assets							$	1,129.0		$	1,152.0		$	1,357.0		$	1,788.9								$	1,719.3
Total long-term debt								13.7			12.5			12.5			640.0									661.4
Total net equity(g)								136.4			130.5			531.2			282.3									230.0

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(a) Effective February 1, 2002, our predecessor prospectively adopted, for sales promotions and incentive programs, the requirements of EITF Issue 01-09. Under the new method, we generally provide for estimated sales promotion and incentive expenses at the later of revenue recognition or the announcement of sales promotion and incentive programs. Prior to the year ended January 31, 2003, these sales promotions and incentive programs were provided for at the time that management determined that the sales promotions and incentives were necessary, which was generally before the announcement to customers.

(b) EBITDA represents net income (loss) plus income tax expense (recovery), interest expense (income), including amortization of deferred financing costs, accretion in carrying value of redeemable preferred shares (which is considered interest expense under Canadian GAAP) and depreciation and amortization. We present EBITDA because we believe it provides useful information about our ability to service and incur debt. EBITDA is not an alternative to net income nor does it represent cash flow from operations as defined by either Canadian GAAP or U.S. GAAP, collectively, GAAP, and we do not suggest that you consider it is an indicator of operating performance or an alternative to operating cash flow or net income (as measured by GAAP) or as a measure of liquidity. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Furthermore, since EBITDA is not defined by GAAP, it may not be calculated on the same basis as other similarly titled measures of other companies. The following table represents a reconciliation from net income (a GAAP measure) to EBITDA:

	Predecessor											Successor					Predecessor			Successor
	Fiscal Year Ended January 31,									For the Period February 1, 2003 to December 18, 2003		For the Period December 19, 2003 to January 31, 2004			Combined Twelve Months Ended January 31, 2004		Three Months Ended April 30, 2003			Three Months Ended April 30, 2004
	2000		2001			2002		2003
	($ in millions)
EBITDA
Net income (loss)	$	23.3	$	74.5		$	66.6	$	114.8	$	30.2	$	(17.5	)	$	12.7	$	(16.5	)	$	(35.7	)
Interest expense (income)		2.8		(0.4	)		4.1		4.9		3.2		6.4			9.6		1.0			12.2
Accretion in carrying value of redeemable preferred shares		—		—			—		—		—		0.5			0.5		—			1.0
Income tax expense (recovery)		10.3		34.6			23.7		50.1		15.3		(5.9	)		9.4		(8.8	)		(10.8	)
Depreciation and amortization		63.1		62.5			69.8		97.4		91.6		14.1			105.7		26.5			30.3
EBITDA	$	99.5	$	171.2		$	164.2	$	267.2	$	140.3	$	(2.4	)	$	137.9	$	2.2		$	(3.0	)

(c) For purposes of calculating the ratio of earnings to fixed charges, earnings represent income (loss) before income tax expense plus fixed charges. Fixed charges consist of total interest expense, amortization of deferred financing costs, accretion in carrying value of preferred shares and a one-third portion of operating lease expenses that management believes is representative of the interest component of rent pursuant to our operating leases. For U.S. GAAP purposes, the accretion in carrying value of redeemable preferred shares in the amount of $0.5 million, for the period from December 19, 2003 to January 31, 2004 and $1.0 million for the three-month period ended April 30, 2004, are not included in fixed charges. The ratio (under Canadian GAAP) was not presented for the period of December 19, 2003 to January 31, 2004 and the three-month period ended April 30, 2004 as earnings were insufficient to cover fixed charges by $23.4 million and $46.5 million, respectively. The ratio under U.S. GAAP was not presented for the period of December 19, 2003 to January 31, 2004 and the three-month period ended April 30, 2004 as earnings were insufficient to cover fixed charges by $31.9 million and $44.4 million, respectively.

(d) Represents total current assets less total current liabilities.

(e) Total assets as of January 31, 2000 and 2001 do not include the acquisition of assets of the outboard marine business of Outboard Marine Corporation, which was consummated in 2002.

(f) The following is a reconciliation of EBITDA from Canadian GAAP to U.S. GAAP:

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	Predecessor									Successor						Predecessor			Successor
	Fiscal Year Ended January 31, 2002			Fiscal Year Ended January 31, 2003			For the Period February 1, 2003 to December 18, 2003			For the Period December 19, 2003 to January 31, 2004			Combined Twelve Months Ended January 31, 2004			Three Months Ended April 30, 2003			Three Months Ended April 30, 2004
	($ in millions)
EBITDA (Canadian GAAP)	$	164.2		$	267.2		$	140.3		$	(2.4	)	$	137.9		$	2.2		$	(3.0	)
Adjustments: (i)
Development costs capitalized		(9.5	)		(8.6	)		(4.7	)		(9.3	)		(14.0	)		(1.6	)		—
Pension expense		(0.5	)		(0.9	)		(0.4	)		—			(0.4	)		(0.1	)		—
Software costs capitalized		1.5			1.4			1.2			—			1.2			0.3			—
Unrealized gains/losses on foreign exchange contracts		(13.1	)		31.7			12.3			—			12.3			25.9			—
EBITDA (U.S. GAAP)(ii)	$	142.6		$	290.8		$	148.7		$	(11.7	)	$	137.0		$	26.7		$	(3.0	)

(i) See Note 22, Note 26 and Note 20 to the audited financial statements of our predecessor company, our audited consolidated financial statements and our unaudited interim consolidated financial statements, respectively, included elsewhere in this prospectus.

(ii) EBITDA includes $9.1 million, $13.8 million, $11.3 million, $0.4 million. $11.7 million, $1.5 million and $2.7 million of research and development tax credits for the fiscal years ended January 31, 2002 and 2003, the period from February 1, 2003 to December 18, 2003, the period from December 19, 2003 to January 31, 2004 and the combined year ended January 31, 2004, and the three months periods ended April 30, 2004 and 2003, respectively, which we include as a reduction in our research and development expenses, as opposed to a reduction in our income tax expense.

(g) Total net equity under U.S. GAAP includes other accumulated comprehensive income (loss) of $(12.3) million, $(10.3) million, $(15.2) million, $2.0 million and $(22.6) million as of January 31, 2002 and 2003, December 18, 2003, January 31, 2004 and April 30, 2004.

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UNAUDITED PROFORMA CONSOLIDATED FINANCIAL DATA

Unaudited Pro forma Consolidated Statement of Income for the Twelve-Month Period Ended January 31, 2004

On December 2, 2003, as part of the Transactions, we entered into a purchase agreement with Bombardier pursuant to which we purchased Bombardier’s recreational products business for total consideration of $806.3 million (comprised of $910.0 million in cash less cash acquired of $196.7 million, $42.7 million fair value of redeemable preferredshares of our parent and acquisition related transaction costs of $50.3 million), subject to adjustment in accordance with the terms of the purchase agreement. For further details on all the Transactions, please refer to the section “The Transactions” and Note 2 to our January 31, 2004 consolidated financial statements included elsewhere in this prospectus.

On July 23, 2004, our board of directors approved the sale of our utility vehicles segment. The transaction was completed on August 30, 2004 and the utility vehicles segment was sold for net proceeds of approximately $40 million, subject to a purchase price adjustment based on working capital amounts at closing date.

The unaudited pro forma consolidated financial data for the twelve-month period ended January 31, 2004 has been derived by the application of pro forma adjustments to our predecessor company’s historical financial statements for the period from February 1, 2003 to December 18, 2003 and our historical consolidated financial statements for the period from December 19, 2003 to January 31, 2004, on a combined basis, both included elsewhere in this prospectus. The unaudited pro forma consolidated statement of income for the twelve-month period ended January 31, 2004 gives effect to the Transactions and the Disposal as if they had occurred as of February 1, 2003. The unaudited pro forma consolidated financial data as at April 30, 2004 and for the three-months ended April 30, 2004 has been derived by the application of pro forma adjustments to our unaudited historical interim consolidated financial statements as at and for the three-months ended April 30, 2004, which are included elsewhere in this prospectus. The unaudited pro forma consolidated statement of income for the three-months ended April 30, 2004 gives effect to the Disposal as if it had occurred as of February 1, 2004. The unaudited pro forma Balance Sheet gives effect to the Disposal as if it had occurred as at April 30, 2004. The unaudited pro forma consolidated data does not purport to represent what our results of operations would have been if the Transactions and Disposal had occurred as of the date indicated.

The total cost of the acquisition that was part of the Transactions was allocated to the assets acquired and liabilities assumed on the basis of their estimated fair values, using the purchase method of accounting in accordance with the Canadian Institute of Chartered Accountants, or CICA, Handbook Section 1581, “Business Combinations” (“CICA 1581”). The estimated fair values of certain assets acquired (land, buildings and intangible assets) were determined by independent valuations, for which the independent valuation related to the intangible assets is preliminary. The initial valuation and amortization period of the intangible assets could change by material amounts as a result of finalizing the valuations.

The unaudited pro forma consolidated financial data has been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. Notes 22 and 26 to the audited financial statements of our predecessor company and our audited consolidated financial statements, respectively, included elsewhere in this prospectus, describe the principal differences between Canadian GAAP and U.S. GAAP. The unaudited pro forma consolidated financial data presents a summary of the U.S. GAAP reconciliation under U.S. GAAP to our pro forma consolidated financial data under U.S. GAAP.

You should read our unaudited pro forma consolidated financial data and their accompanying notes in conjunction with our audited historical consolidated financial statements and the accompanying notes thereto, the audited historical financial statements of our predecessor company and the accompanying notes thereto, and our unaudited interim consolidated financial statements and other information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

FOR THE TWELVE-MONTH PERIOD ENDED JANUARY 31, 2004

($ in millions)

	Predecessor		Successor			Pro Forma Adjustments(8)			Pro Forma Adjustments- Disposition (8)			Pro Forma Twelve Months Ended January 31, 2004 (9)
	For the Period February 1, 2003 to December 18, 2003		For the Period December 19, 2003 to January 31, 2004
Canadian GAAP
Revenues
Power sports	$	1,593.1	$	273.7		$	—		$	—		$	1,866.8
Marine Engines		482.5		59.8			—			—			542.3
Utility Vehicles		71.5		11.5			—			(83.0	)		—
Total revenues		2,147.1		345.0			—			(83.0	)		2,409.1
Cost of sales		1,738.3		318.5			(16.5	)(1)		(67.6	)		1,972.7
Gross profit		408.8		26.5			16.5			(15.4	)		436.4
Operating expenses:
Selling and marketing		147.2		18.6			(0.2	)(2)		(4.2	)		161.4
Research and development		97.2		13.3			(0.4	)(3)		(3.2	)		106.9
General and administrative		115.7		7.9			5.0	(4)		(4.8	)		123.8
Total operating expenses		360.1		39.8			4.4			(12.2	)		392.1
Operating profit (loss)		48.7		(13.3	)		12.1			(3.2	)		44.3
Interest expense (income) and other		3.2		6.4			39.8	(6)		—			49.4
Accretion in carrying value of redeemable preferred shares		—		0.5			3.5	(5)		—			4.0
Net loss on derivative financial instruments		—		4.5			—			—			4.5
Unrealized gain on foreign exchange		—		(1.3	)		—			—			(1.3	)
Income (loss) before income taxes and discontinued operations		45.5		(23.4	)		(31.2	)		(3.2	)		(12.3	)
Income tax expense (recovery)		15.3		(5.9	)		(9.0	)(7)		(1.2	)		(0.8	)
Net income (loss) from continuing operations	$	30.2	$	(17.5	)	$	(22.2	)	$	(2.0	)	$	(11.5	)

(1) Represents the following adjustments to cost of sales for the twelve-month period ended January 31, 2004 ($ in millions):

Inventory (a)	$	(22.8	)
Depreciation and amortization of property, plant and equipment (b)		(0.4	)
Amortization of other intangibles (c)		11.0
Pension expense (d)		(1.6	)
Amortization of patent rights (e)		(2.7	)
	$	(16.5	)

(a) Reflects an adjustment to eliminate the impact of inventory sold in the 44-day period ended January 31, 2004 which had been increased in value as part of the Transactions, to the distributor selling price, by an amount of $14.6 million and an adjustment of $8.2 million for accumulated unfavorable manufacturing costs variance for the period from February 1, 2003 to December 18, 2003 which were to be absorbed by January 31, 2004 but were not included in the net assets acquired on December 18, 2003. The pro forma adjustment does not reflect the remaining difference of $9.3 million of adjustments related to the distributor selling price from the application of purchase accounting, which remains as at January 31, 2004, and which will be included in cost of sales when purchased inventory is sold in fiscal 2005.

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(b) Reflects adjustments of depreciation expense for property, plant and equipment, resulting from the fair valuation adjustments of $60.7 million related to the acquisition, that is amortized using the straight-line method over an estimated life of 20 years, as well as a reduction in depreciation expense pertaining to a longer depreciation period used for property, plant and equipment acquired than that used by our predecessor.

(c) Reflects adjustments to the amortization expense to reflect differences resulting from the fair valuation adjustments recorded at December 19, 2003. An adjustment of $9.4 million relates to intangible patent assets acquired as part of the Transactions having a fair value of $32.1 million that is amortized using the straight-line method over an estimated useful life of 3 years. Also, an adjustment of $1.6 million relates to intangible dealer network assets acquired as part of the Transactions having a fair value of $46.3 million, which is amortized using the straight-line method over an estimated useful life of 25 years.

(d) Reflects adjustments in pension expense for our Canadian operations due to our obligation to provide pension benefits, subsequent to the Transactions, only to active employees and not the retirees existing on December 18, 2003, as well as due to the changes in actuarial assumptions used as of December 19, 2003 as compared to those used by our predecessor.

(e) Reflects an adjustment to eliminate amortization expense for the period from February 1, 2003 to December 18, 2003 with respect to patent rights that were allocated no value as part of the Transactions.

(2) Represents an adjustment to selling and marketing expenses to reflect a reduction in pension expense (see 1(d) above).

(3) Represents an adjustment to research and development expenses to reflect a reduction in pension expense (see 1(d) above).

(4) Represents the following adjustments to general and administrative expenses for the pro forma twelve-month period ended January 31, 2004 ($ in millions):

Administrative costs (a)	$	5.0
Pension expense (b)		(0.3	)
Insurance costs (c)		6.1
Federal large corporations tax (d)		4.0
Bombardier corporate cost allocation (e)		(12.6	)
New management fee (f)		2.8
	$	5.0

(a) Reflects estimated additional corporate costs which will be incurred by us for functions such as treasury, finance and accounting, taxation and legal services which, historically, were provided by Bombardier and charged back to us via a general allocation of Bombardier corporate costs (see 4(e), below).

(b) Reflects a reduction in pension expense (see 1(d) above).

(c) Reflects expected additional insurance expense for our operations as a standalone entity.

(d) Reflects our obligation to pay a large corporations tax since we are no longer a division of Bombardier.

(e) Represents the reduction of general and administrative costs from corporate charges allocated to the recreational products business by Bombardier for the period from February 1, 2003 to December 18, 2003. As a standalone entity, we estimate that we will incur corporate costs which are reflected in the pro forma adjustments above (see 4(a) above and 4(f) below).

(f) Represents the additional management fee that we would have paid to our Sponsors for the period from February 1, 2003 to December 18, 2003.

(5) Represents an adjustment to reflect the accretion in the carrying value of redeemable preferred shares for the period from February 1, 2003 to December 18, 2003.

44

(6) Represents the additional interest expense as a part of the new financing arrangements, resulting from the Transactions, which is calculated as follows for the pro forma twelve-month period ended January 31, 2004 ($ in millions):

Additional interest on new borrowings (a)	$	36.5
Amortization of deferred financing costs (b)		6.0
Interest expense on advances from Bombardier		(2.7	)
Net adjustment to interest expense	$	39.8

(a) Represents pro forma interest expense calculated using assumed interest rates on (i) an assumed $15.0 million average amount (monthly average amounts outstanding ranging from $0 to $70 million) expected to be drawn on our new $250 million revolving loan facility, (ii) an assumed average $49 million of letters of credit issued under the letter of credit sub-facility under our new revolving loan facility, (iii) our new variable rate term loan, (iv) the senior subordinated notes offered hereby and (v) an assumed commitment fee on the expected unused portion of the revolving loan facility. Assuming an average outstanding balance of $40 million on our revolving loan facility, each quarter point change in interest rates would result in a $0.1 million change in the interest expense. With respect to the term loans, each quarter point change in interest rates would result in a $0.9 million change in interest expense. We have also assumed a LIBOR rate of 1.18% (as of April 30, 2004) plus an applicable margin of 3.0%, as defined in our senior credit agreement, to calculate pro forma interest expense on outstanding borrowings under the term loans and the revolving loan facility.

(b) Represents an adjustment to reflect the amortization of deferred financing fees for the period from February 1, 2003 to December 18, 2003, using a weighted average maturity of 9.3 years for the related indebtedness.

(7) Reflects the income tax impact on the pro forma adjustments using an estimated combined statutory income tax rate of 28.8%. This tax rate is not necessarily indicative of our expected future effective tax rate.

(8) Reflects adjustments to our predecessor company’s historical financial statements for the period from February 1, 2003 to December 18, 2003 and our historical consolidated financial statements for the period from December 19, 2003 to January 31, 2004, on a combined basis, giving effect to the disposition of the utility vehicles segment as if the disposition had occurred on February 1, 2003 and any impact the Transactions had on the utility vehicles segment. Consequently, the results of operations of the utility vehicles segment have been removed from our unaudited pro forma consolidated statement of operations.

(9) The pro forma results do not reflect the impact of stock-based compensation expense that we will record for grants of stock options pursuant to our parent’s stock option plan. On March 31, 2004, the board of directors of our parent approved a stock option plan as well as a grant of 19,785,540 options. The estimated fair value of these options, assuming that all related conditional vesting terms will likely be achieved, is approximately $10.4 million. Compensation expense will be recorded, over the expected vesting period of the options, for the ones that are expected to vest.

45

Differences Between Canadian and United States Generally Accepted Accounting Principles

The unaudited pro forma consolidated financial data has been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. Notes 22 and 26 to the audited financial statements of our predecessor company and our audited consolidated financial statements, respectively, included elsewhere in this prospectus, describe the principal differences between Canadian GAAP and U.S. GAAP. The following table presents a reconciliation of our net income under U.S. GAAP to our pro forma net income under U.S. GAAP for the pro forma twelve-month period ended January 31, 2004 ($ in millions):

U.S. GAAP
Net income in accordance with U.S. GAAP	$	14.1
Pro forma adjustments for Transactions under Canadian GAAP		(22.2	)
Pro forma adjustments for disposition under Canadian GAAP and U.S. GAAP		(2.0	)
Adjustment to Canadian GAAP pro forma adjustments for the Transactions
Accretion in the carrying value of redeemable preferred shares (a)		3.5
Pro forma net income (loss) in accordance with U.S. GAAP	$	(6.6	)

(a) Under Canadian GAAP, the accretion in the carrying value and unpaid dividends of redeemable preferred shares are included in net loss. Under U.S. GAAP, the accretion in the carrying value and unpaid dividends of redeemable preferred shares are recorded as capital transactions.

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UNAUDITED PRO FORMA BALANCE SHEET

AS OF APRIL 30, 2004

($ in millions)

	As at April 30, 2004			Pro Forma Adjustments(1)			Pro Forma April 30, 2004
ASSETS
Current assets
Cash	$	152.5		$	38.2		$	190.7
Receivables, net of allowance for doubtful accounts of $8.4 [January 31, 2004 – $4.3]		140.0			(3.0	)		137.0
Inventories		378.4			(24.1	)		354.3
Prepaid expenses		14.1			(0.3	)		13.8
Deferred income taxes		76.5			(1.5	)		75.0
Other current assets		75.8			—			75.8
Total current assets		837.3			9.3			846.6
Property, plant and equipment		485.0			(7.6	)		477.4
Goodwill		90.8			(13.6	)		77.2
Trademarks		151.1			—			151.1
Other intangible assets		87.5			—			87.5
Deferred income taxes		22.7			(2.4	)		20.3
Other long-term assets, including restricted investments of $12.6 [January 31, 2004 – $12.6]		61.7			—			61.7
	$	1,736.1		$	(14.3	)	$	1,721.8
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	587.9		$	(9.3	)	$	578.6
Income taxes payable		10.6			—			10.6
Current portion of long-term debt		5.2			—			5.2
Other current liabilities		2.6			(0.5	)		2.1
Deferred income taxes		—			—			—
Total current liabilities		606.3			(9.8	)		596.5
Long-term debt		656.2			—			656.2
Deferred income taxes		16.0			0.1			16.1
Employee future benefits liability		124.7			(3.5	)		121.2
Other long-term liabilities		28.4			—			28.4
Redeemable preferred shares		44.2			—			44.2
Total liabilities		1,475.8			(13.2	)		1,462.6
Shareholder’s equity
Share capital		311.0			—			311.0
Contributed surplus		0.7			—			0.7
Deficit		(53.2	)		(1.1	)		(54.3	)
Currency translation adjustment		1.8			—			1.8
	$	1,736.1		$	(14.3	)	$	1,721.8

(1) Reflects adjustments to our historical unaudited interim consolidated balance sheet as of April 30, 2004 giving effect to the disposition of the utility vehicles segment as if the disposition had occurred on April 30, 2004. Therefore the financial position of the utility vehicles segment has been removed from our unaudited interim pro forma consolidated balance sheet as of April 30, 2004.

We estimate the gain or loss resulting from the disposal of the segment to be minimal as the timing between the date we acquired the recreational products division from Bombardier and the disposal date is relatively short and no events have occurred, since the acquisition date, which would indicate that the assets of this segment have been impaired. The estimated net proceeds of disposal for the utility segment of $40 million, including costs of disposals of $1.3 million, and after considering working capital adjustments, approximate the fair value allocated to the utility segment when we had originally purchased it.

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UNAUDITED PRO FORMA STATEMENT OF INCOME

FOR THE THREE-MONTH PERIOD ENDED APRIL 30, 2004

	Three Months Ended April 30, 2004			Pro Forma Adjustments(2)			Pro Forma Three Months Ended April 30, 2004
Canadian GAAP
Revenues
Power sports	$	479.5		$	—		$	479.5
Marine Engines		143.6			—			143.6
Utility Vehicles		7.8			(7.8	)		—
Total revenues		630.9			(7.8	)		623.1
Cost of sales		540.8			(6.6	)		534.2
Gross profit		90.1			(1.2	)		88.9
Operating expenses:
Selling and marketing		40.5			(1.2	)		39.3
Research and development		30.4			(0.8	)		29.6
General and administrative		31.3			(1.0	)		30.3
Total operating expenses		102.2			(3.0	)		99.2
Operating profit (loss)		(12.1	)		1.8			(10.3	)
Interest expense (income) and other		12.2			—			12.2
Accretion in carrying value of redeemable preferred shares		1.0			—			1.0
Net loss on derivative financial instruments		—			—			—
Unrealized foreign exchange loss on long-term debt		21.2			—			21.2
Income (loss) before income taxes		(46.5	)		1.8			(44.7	)
Income tax expense (recovery)		(10.8	)		0.7			(10.1	)
Net income from continuing operations (loss)	$	(35.7	)	$	1.1		$	(34.6	)

(2) Reflects adjustments to our historical unaudited interim consolidated statement of operations as of April 30, 2004 giving effect to the disposition of the utility vehicles segment as if the disposition had occurred on February 1, 2004. Therefore the results of operations of the utility vehicles segment have been removed from our unaudited interim pro forma consolidated statement of operations for the three-month period ended April 30, 2004.

We estimate the gain or loss resulting from the disposal of the segment to be minimal as the timing between the date we acquired the recreational products division from Bombardier and the disposal date is relatively short and no events have occurred, since the acquisition date, which would indicate that the assets of this segment have been impaired. The estimated net proceeds of disposal for the utility segment of $40 million, including costs of disposals of $1.3 million, and after considering working capital adjustments, approximate the fair value allocated to the utility segment when we had originally purchased it.

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Differences Between Canadian and United States Generally Accepted Accounting Principles

The unaudited pro forma interim consolidated balance sheet and statement of operations have been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. Note 20 to our unaudited interim consolidated financial statements, included elsewhere in this prospectus, describe the principal differences between Canadian GAAP and U.S. GAAP. The following table presents a reconciliation of our net income under U.S. GAAP to our pro forma net income under U.S. GAAP and our balance sheet data under U.S. GAAP to our pro forma balance sheet data under U.S. GAAP for the pro forma three-month period ended April 30, 2004 ($ in millions):

U.S. GAAP
Statement of Income Data:
Net loss in accordance with U.S. GAAP	$	(33.9	)
Pro forma adjustments under Canadian GAAP and U.S. GAAP		1.1
Pro forma net loss in accordance with U.S. GAAP	$	(32.8	)

	U.S. GAAP as at April 30, 2004	Pro Forma Under Canadian and U.S. GAAP			Pro Forma U.S. GAAP
Pro forma Balance Sheet Data (at end of period):
Total assets	$1,719.3	$	(14.3	)	$	1,705.0
Total long-term debt	661.4		—			661.4
Total net equity	230.0		1.1			231.1

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements and the accompanying notes for the 44-day period ended January 31, 2004 (“Successor”) and in conjunction with the historical financial statements and accompanying notes of Bombardier’s recreational products division as at December 18, 2003 and January 31, 2003 and for the 321-day period ended December 18, 2003 and the years ended January 31, 2003 and 2002 (“Predecessor”). For the ease of comparison purposes, financial data for the period of December 19, 2003 through January 31, 2004 has been added to financial data for the period from February 1, 2003 through December 18, 2003, to arrive at a 12-month combined period ended January 31, 2004. This period may be referred to herein as the “combined year ended January 31, 2004” or “combined year 2004”. The Consolidated Financial Statements, and the notes thereto, have been prepared in accordance with Canadian GAAP, which differ in certain material respects from U.S. GAAP. These differences are described in Note 26 to the Audited Consolidated Financial Statements included elsewhere in this prospectus. Comparative financial information for periods prior to December 18, 2003 is presented pursuant to regulatory requirements. The predecessor financial statements and notes thereto have been prepared in accordance with Canadian GAAP, which differs in certain material respects from U.S. GAAP. These differences are described in Note 22 to the predecessor financial statements included elsewhere in this prospectus. The financial condition and results of operations discussed for the Successor’s three month- period ended April 30, 2004 and the Predecessor’s three-month period ended April 30, 2003 should be read in conjunction with the Unaudited Interim Consolidated Financial Statements and the Notes included elsewhere in this prospectus. The Unaudited Interim Consolidated Financial Statements, and the notes thereto, have been prepared in accordance with Canadian GAAP, which differ in certain material respects from U.S. GAAP. These differences are described in Note 20 to the Interim Consolidated Financial Statements included elsewhere in this prospectus.

In reviewing this comparative financial information, readers should remember that Predecessor period results of operations do not reflect the effects of the Transactions and the application of purchase accounting. All amounts are in Canadian Dollars except otherwise indicated.

Description of Business

We are a leading designer, manufacturer and distributor of motorized recreational products worldwide. Our business consists of a diversified portfolio of products with industry leading and improving market shares. We have a number one market share position in the primary markets of each of our core products: snowmobiles (the Ski-Doo and Lynx brands), personal watercraft (the Sea-Doo brand), sport boats (the Sea-Doo brand) and snow grooming vehicles. We also entered the market for outboard engines, by acquiring the Johnson and Evinrude brands from Outboard Marine (which brands have the highest installed base of outboard engines in North America) and for ATVs by launching our own product line. Due to our market leading positions, our products have a large installed base that generates repeat business from our customers and supports a recurring stream of revenue from related parts, accessories and clothing sales.

Our business is comprised of three reportable segments, the Power Sports segment, Marine Engines segment and Utility Vehicles segment. Power Sports segment includes snowmobiles, watercrafts, all-terrain vehicles, sport boats, and small engines, our Marine Engines segment includes outboard engines, and our Utility Vehicles segment includes snow grooming equipment and multi-purpose tracked vehicles. Power Sports is the largest segment, representing 75% of the our sales in the combined year 2004.

On August 30, 2004, we consummated the sale of our utility vehicles segment. The sale of the utility vehicles segment is in line with our strategic focus, which is designed to maximize the synergies between our various products and manufacturing facilities. The sale of the utility vehicles segment will not have a significant impact on our results of operations and financial position. For the combined year ended January 31, 2004

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revenues from the utility vehicles segment represented 3.3% of combined revenues and segment operating profit represented 4.6% of total combined operating profit. Net proceeds from the disposal are approximately $40.0 million subject to a purchase price adjustment based on working capital amounts at closing date. We do not anticipate recording a significant gain or loss from the disposal of this segment as the timing between the date we acquired the recreational products division from Bombardier and the disposal date is relatively short and no events have occurred, since the acquisition date, which would indicate that the assets of this segment are impaired. We will not retain any financial interest in the disposed segment.

Results of operations of the utility vehicles segment are presented as part of our results of operation and not as discontinued operations since all actions required to finalize the disposal occurred subsequent to April 30, 2004.

Acquisition of the recreational products business

On December 18, 2003 we purchased Bombardier’s recreational products business for a total consideration of $806.3 million (comprised of $910.0 million less cash acquired of $196.7 million, plus $42.7 million fair value of redeemable preferred shares of our parent and acquisition related transaction costs of $50.3 million). The net assets acquired are subject to a purchase price adjustment based on initial working capital amounts at closing and indemnification amounts related to income taxes due to Bombardier, which are included in other liabilities. The total cost of the purchase was allocated to the assets acquired and liabilities assumed on the basis of their estimated fair values as determined by preliminary independent valuations, using the purchase method of accounting. The main adjustments to the carrying value of the net assets acquired include a step up in the inventory value of $24.0 million to reflect distributor prices; recognition of the fair market value of foreign exchange contracts of $50.8 million; increase in the fair market value of property, plant and equipment of $85.2 million based on the combination of market value, going concern value, and value in use methodologies; the value of trademarks of $151.1 million, patents of $32.1 million, dealer network of $46.3 million, and license agreement of $13.8 million was based on discounted cash flows; and the recognition of an unrecognized employee future benefits liability of $48.9 million. As a result, residual goodwill was recorded at $91.4 million representing the excess of the purchase price over the fair value of the identifiable net assets acquired.

Results of Operations

Three-month period ended April 30, 2004 with three month period ended April 30, 2003 (Unaudited)

Overview

Revenues reached $630.9 million for the first quarter of fiscal 2005, an increase of 22.3% compared to the first quarter of fiscal 2004 with revenues of $515.8 million. Revenues for most of our product lines were up, when compared to the fiscal 2004 first quarter, due to the following reasons: (i) a management decision to postpone our watercraft production and delivery from the latter part of our fiscal year ended January 31, 2004 to the first quarter of 2005; (ii) the increased sales of the Outlander and MAX series ATVs; and (iii) the successful introduction of new products such as the E-TEC outboard engines. Net loss increased by $19.2 million compared to the first quarter of fiscal 2004. The variation in net loss was caused primarily by increased interest expense and accretion in carrying value of redeemable preferred shares of $13.2 million, an unrealized foreign exchange loss on long-term debt of $21.2 million and items related to purchase accounting of $12.5 million resulting from the settlement of foreign exchange contracts acquired as part of the acquisition and of the inventory sold which had been increased in value to distributor selling prices at the date of the acquisition.

Our cash balance at $152.5 million will provide the majority of the liquidity needed as we increase inventory levels for the upcoming snowmobile season and we anticipate using only a portion of the available credit under our revolving credit facility.

Revenues. Consolidated revenues for the first quarter of fiscal 2005 in the amount of $630.9 million were up 22.3% when compared to the first quarter of fiscal 2004. Power Sports segment revenues increased by $100.5

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million due in majority to a management decision to postpone our watercraft production and delivery from the latter part of our fiscal year ended January 31, 2004 to this first quarter, increased demand for our watercrafts and by the increased demand of our ATV products due to the popularity of the Outlander and MAX series ATVs. Revenue increases, in the Power Sports segment, were offset by a strengthening Canadian dollar in relation to the U.S. dollar. Marine Engines revenues have increased by 11.4% when compared to the first quarter of fiscal 2004. Increased volumes, and better product mix were largely offset by a negative impact resulting from the conversion of U.S. dollar revenues into Canadian dollars when compared to the prior period. For the quarters ended April 30, 2004 and 2003, U.S. dollar revenues were converted into Canadian dollars at the average exchange rates of 1.3326 and 1.4825, respectively.

Gross Profit. Gross profit percentage of revenues decreased to 14.3% from 16.0% when compared to the same quarter in fiscal 2004. Gross profit decrease was caused primarily by the unfavorable impact of a stronger Canadian dollar in relation to the U.S. dollar. It was also caused by the unfavorable impacts resulting from the acquisition and mainly related to; (i) inventory sold during the period which had been increased in value to distributor selling prices; (ii) the unfavourable impact resulting from the settlement of foreign exchange contracts; and (iii) the amortization of intangible assets acquired. These two elements more than offset the positive impact of additional volume and a better mix of watercraft and ATV products in our Power Sports segment.

Selling and Marketing. Selling and Marketing expenses decreased as a percentage of revenues to 6.4% from 8.8% for the same period in fiscal 2004. The percentage decreased was primarily caused by higher revenues and a general reduction of selling and marketing expenses in the power sports segment of $6.5 million due to more favorable weather conditions.

Research and Development Expense. Research and Development expenses (“R&D”) increased to $30.4 million in the first quarter of fiscal 2005 from $29.4 million in the first quarter of 2004. R&D as a percentage of sales was 4.8% and 5.7% for the first quarter ended April 30, 2004 and 2003, respectively. Continued investments in R&D demonstrates our commitment to product innovation. We believe product innovation is essential in the recreational business.

General and Administrative Expenses. General and administrative expenses (“G&A”) decreased for the first quarter by 2.5% to $31.3 million from $32.1 million in the same period in fiscal 2004. G&A as a percentage of sales was 5.0% and 6.2% for the first quarter ended April 30, 2004 and 2003, respectively. Items that have caused G&A to vary are incremental costs which we now incur as a stand alone entity such as corporate function costs, large corporations taxes and higher insurance costs and additional expenses related to the expensing of our parent company stock options that were granted to certain members of management of BRP, offset by a reduction of expenses for corporate costs of Bombardier which were allocated to the recreational products business for the period ended April 30, 2003 and which we no longer incur.

Interest Expense and Other. Interest expense and other for the second quarter totaled $12.2 million compared to $1.0 million for the first quarter ended April 30, 2004 and 2003, respectively. The increase was caused by our new long-term debt that was issued in December 2003 in connection with the acquisition of the recreational products business. Also included in interest expense and other is the amortization expense in the amount of $1.6 million for costs associated with the issuance of long-term debt, which are being amortized over a period of approximately 9 years.

Interest expense on the notes will be U.S. $16.8 million for fiscal 2005. Interest expense on the floating U.S. $ 280.0 million U.S. and Canadian term loans was $4.0 million for the 3-month period ended April 30, 2004 and the effective interest rate as of April 30, 2004 was 4.13%. Amortization expense related to deferred financing costs for the 2005 fiscal year should approximate $6.8 million.

Accretion in Carrying Value of Redeemable Preferred Shares. Accretion in the carrying value of the redeemable preferred shares, was $1.0 million for the period ended April 30, 2004. The carrying value of the

52

redeemable preferred shares is increased to its redemption value through charges to operations over the period up to their estimated redemption date. Accretion in the carrying value of the redeemable preferred shares for the 2005 fiscal year will be approximately $4.1 million.

Unrealized Foreign Exchange Loss on Long-term Debt. Unrealized foreign exchange loss on long-term debt, in the amount of $21.2 million, represents the loss resulting from the conversion of our U.S. dollar denominated debt, for financial reporting purposes, into Canadian dollars. Our long-term debt, denominated in U.S. dollars, was converted at an exchange rate of 1.3706 as of April 30, 2004 compared to a rate of 1.3264 as of January 31, 2004.

Provision for Income Taxes. The effective tax rate for the first quarter of fiscal 2005 was 23.3% and 34.8% for the first quarter of fiscal 2004. This reduction in effective tax recovery rate is due mainly to the fact that we have not recognized any tax benefit resulting from the unrealized foreign exchange loss of $21.2 million mentioned above.

Net Loss. Net loss for the three-month period ended April 30, 2004 was $35.7 million compared to a net loss of $16.5 million for the same period in fiscal 2004. The increase in net loss resulted mainly from increased interest expense and accretion in carrying value of redeemable preferred shares, an unrealized foreign exchange loss on long-term debt and non-recurring items related to purchase accounting.

Business Segments

Segment operating profit (loss) excludes costs of corporate office charges for administrative functions as well as interest expense and income taxes.

The following table summarizes revenues by segment :

	Three months ended April 30,
	2004			2003			$ Change			% Change
	(unaudited)			(unaudited)
	(in millions of Canadian dollars)
Power Sports	$	483.4		$	382.9		$	100.5		26.2	%
Marine Engines		151.1			135.6			15.5		11.4
Utility Vehicles		7.8			7.9			(0.1	)	(1.3	)
Intersegment revenues		(11.4	)		(10.6	)		(0.8	)	(7.5	)
Total consolidated revenues	$	630.9		$	515.8		$	115.1

The following table summarizes segment operating profit (loss):

	Three months ended April 30,
	2004					2003
				As a % of segment revenue					As a % of segment revenue		$ Change			% Change
	(unaudited)					(unaudited)
	(in millions of Canadian dollars)
Power Sports	$	9.4		1.9	%	$	(8.3	)	(2.2	)%	$	17.7		213.3	%
Marine Engines		(13.2	)	(8.7	)		(9.0	)	(6.6	)		(4.2	)	(46.7	)
Utility Vehicles		(1.8	)	(23.1	)		(2.8	)	(35.4	)		1.0		35.7
Total	$	(5.6	)			$	(20.1	)

Power Sports Segment. Power Sports segment revenues reached $483.4 million for the first quarter of fiscal 2005 compared to $382.9 million for the same quarter of fiscal 2004, an increase of 26.2%. The revenue increase

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is due in part to management’s decision to delay the production and delivery of watercrafts into the first quarter of fiscal 2005 and an increase in the number of units sold of ATV’s both totaling approximately $125 million and a better product mix for approximately $20 million. The higher delivery of ATV units is due in part to increased demand of our ATV products due to the popularity of the Outlander and MAX series ATVs. A stronger Canadian dollar in relation to the U.S. dollar in the first quarter of 2005 compared to the same quarter of fiscal 2004 resulted in an unfavorable impact on revenues of approximately $50 million including the settlement of foreign exchange contracts acquired as part of the acquisition which resulted in an unfavourable impact on revenues for the current period for an amount of $6.1 million.

Power Sports segment operating profit amounted to $9.4 million for the first quarter of fiscal 2005 as compared to an operating loss of $8.3 million for the first quarter of fiscal 2004. As a percentage of revenue, segment operating profit (loss) was 1.9% as compared to (2.2)% for the same period last year. Despite the negative impacts resulting from unfavourable exchange rates of approximately $38.0 million, the settlement of foreign exchange contracts acquired as part of the acquisition of $6.1 million and of the inventory sold during the period which had been increased in value to distributor selling prices at the date of the acquisition of $6.4 million the Power Sports segment reported an operating profit due in part by a better product mix of watercrafts and ATV’s of around $10 million and the remaining improvement in margin was caused by increased unit sales.

Marine Engines Segment. Marine Engines segment revenues increased by $15.5 million to $151.1 million for the quarter ended April 30, 2004 as compared to $135.6 million for the quarter ended April 30, 2003. The increase in revenues is primarily due a better product mix of approximately $11 million following the introduction of the E-TEC engines which combined both the qualities and benefits of 2-stroke and 4-stroke engines and increased units sold of approximately $18 million and offset, in part, by the weakening of U.S. dollars in relation to the Canadian dollar when compared to the same period in fiscal 2004.

Marine Engines segment operating loss amounted to $13.2 million for the quarter ended April 30, 2004 as compared to a segment operating loss of $9.0 million in the same quarter in fiscal 2004. This increase is mainly due to higher selling and marketing expenses related to the introduction and expansion of the E-TEC product line as well as higher R&D expenses both totaling approximately $4 million. Operating loss for the period ended April 30, 2003 includes a gain on disposal of assets of $2.6 million.

Utility Vehicles Segment. Utility Vehicles segment revenues reached $7.8 million for the quarter ended April 30, 2004 compared to $7.9 million for the first quarter of fiscal 2004. The Utility Vehicles segment revenue is seasonal as a significant portion of our revenues from this segment are generated in the third and fourth quarters, which is just before the North American ski season. This segment is currently in preparation for production of units that are scheduled to be delivered for the next ski season.

Segment operating loss amounted to $1.8 million or 23.1% of segment revenues for the period ended April 30, 2004 as compared to $2.8 million or 35.7% for the same period in fiscal 2004.

Combined year 2004 compared with year ended January 31, 2003

Overview

Consolidated revenues reached $2.5 billion for the combined year 2004, approximately the same level as last year. Revenue increases in the Power Sports segment were offset by revenue declines in the Marine Engines and Utility Vehicles segments. The revenue increase in the Power Sports segment was a result of higher revenue per unit offset by lower unit shipments. The revenue decline in the Marine Engines segment was caused primarily by lower exchange rates used to translate results into Canadian dollars and, in the Utility Vehicles segment, mainly by lower unit shipments.

Consolidated gross profit reached $435.3 million or 17.5% of consolidated revenues for the combined year ended January 31, 2004 as compared to $563.0 million or 22.7% for the year ended January 31, 2003. The

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decrease in consolidated gross profit is primarily due to a favorable impact in the prior year caused by changes in estimates and in accounting policies. The changes in estimates established in connection with the acquisition of assets of the outboard engine business of Outboard Marine Corporation in fiscal 2002, resulted in the reversal of acquisition related accruals. The change in accounting policy represents the impact of adopting a new sales promotion and incentive accounting policy as of February 1, 2002, based on the Emerging Issues Task Force, or EITF, of the United States Financial Accounting Standards Board, or FASB, EITF Issue No. 01-09 “Accounting for Consideration Given to a Vendor by a Customer”. The remainder of the decrease in consolidated gross profit is primarily due to an unfavorable impact in the current year resulting from the fair valuation of assets and liabilities acquired, and, to a lesser extent, the planned postponement of watercraft production to better align shipments with retail sales, and higher warranty costs mainly related to a recall of watercraft fuel tanks.

Operating expenses were $399.9 million or 16.0% of consolidated revenues for the combined year ended January 31, 2004 as compared to $393.2 million or 15.9% for the year ended January 31, 2003. Selling and marketing expense remained at 6.7% of consolidated revenues in both periods. Research and development expense increased slightly from 4.3% of consolidated revenues for the year ended January 31, 2003 to 4.4% for the combined year ended January 31, 2004 based mainly on investment in new product research. General and administrative expense increased slightly from 4.9% to 5.0% based primarily on additional functions required as a standalone company in the successor period.

Increased interest expense as well as the accretion in the carrying value of the redeemable preferred shares resulted from the new debt raised and redeemable preferred shares issued as part of the Transactions.

The net losses on derivative financial instruments relate to losses on foreign exchange contracts on the Canadian Dollar equivalent of the U.S. Dollar debt issued at the time of the Transactions offset by gains on the fair value of the acquired foreign exchange contracts.

Income before income taxes amounted to $22.1 million or 0.9% of consolidated revenues for the combined year ended January 31, 2004 as compared to $164.9 million or 6.7% for the year ended January 31, 2003.

Income tax expense amounted to $9.4 million or 42.5% of income before income taxes for the combined year ended January 31, 2004 as compared to $50.1 million or 30.4% for the year ended January 31, 2003. The tax rate is impacted by tax-exempt items applied against a lower Income before income taxes offset by the favorable impact attributable to a different mix of accounting profits and losses between tax jurisdictions.

Net income amounted to $12.7 million for the combined year ended January 31, 2004 as compared to $114.8 million in the year ended January 31, 2003.

Business Segments

Segment operating profit (loss) excludes costs of corporate office charges for administrative functions as well as interest expense and income taxes.

The following table summarizes revenues by segment :

	Combined period ended January 31, 2004			Year ended January 31, 2003			$ Change			% Change
	(in millions of Canadian dollars)
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Power Sports	$	1,888.5		$	1,834.0		$	54.5		3.0	%
Marine Engines		559.8			579.9			(20.1	)	(3.5	)
Utility Vehicles		83.2			92.9			(9.7	)	(10.4	)
Intersegment revenues		(39.4	)		(30.5	)		(8.9	)	(29.2	)
Total consolidated revenues	$	2,492.1		$	2,476.3		$	15.8

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The following table summarizes segment operating profit (loss):

	Combined period ended January 31, 2004					Year ended January 31, 2003
				As a % of segment revenue				As a % of segment revenue		$ Change			% Change
	(in millions of Canadian dollars)
	(unaudited)			(unaudited)		(unaudited)		(unaudited)		(unaudited)			(unaudited)
Power Sports	$	82.8		4.4	%	$	183.0	10.0	%	$	(100.2	)	(54.8	)%
Marine Engines		(17.1	)	(3.1	)		14.1	2.4			(31.2	)	(221.3	)
Utility Vehicles		3.2		3.8			1.7	1.8			1.5		88.2
Total	$	68.9				$	198.8			$	(129.9	)

Power Sports Segment. Power Sports segment revenues reached $1.9 billion for the combined year 2004 as compared to $1.8 billion for the year ended January 31, 2003. The increase was caused by higher revenue per unit offset by lower unit shipments. The higher revenue per unit resulted primarily from higher prices and favorable unit mix towards higher priced units in snowmobiles and ATVs. The lower unit shipments resulted primarily from lower watercraft units as a result of the planned one-time shift of production from the second half of the combined year 2004 to the first half of the fiscal year 2005 to better align shipments with retail sales offset primarily by higher ATV units as a result of the launch of a more complete product line up and strategic distribution arrangement with John Deere.

Power Sports segment operating profit amounted to $82.8 million for the combined year 2004 as compared to $183.0 million for the year ended January 31, 2003. The decrease results primarily from the favorable impact in the prior period of adopting EITF Issue No. 01-09 and the unfavorable impact in the current period of increasing inventory value to distributor prices in purchase accounting, higher warranty costs related mainly to a recall of watercraft fuel tanks and the postponement of watercraft deliveries. Having adopted EITF No. 01-09, we recognize sales promotion and incentives at the later of revenue recognition or the announcement of the sales and incentive program. The increase in value of inventory to distributor prices at the time of the Transactions and the subsequent sale of a portion of that inventory at a lower margin resulted in an unfavorable impact in the current period.

Marine Engines Segment. Marine Engines segment revenues declined to $542.3 million for the combined year ended January 31, 2004 from $563.5 million in the year ended January 31, 2003 primarily due to lower revenue per unit mainly as a result of lower exchange rates used to translate results into Canadian dollars offset primarily by higher unit shipments due to introducing the E-TEC product line.

Marine Engines segment operating loss amounted to $17.1 million for the combined year ended January 31, 2004 as compared to a segment operating profit of $14.1 million in the year ended January 31, 2003. This decrease results mainly from the favorable impact of changes in estimates established in connection with the acquisition of assets of the outboard engine business of Outboard Marine Corporation that resulted in the reversal of acquisition related accruals. We determined that reserves established at the time of the acquisition of assets against accounts receivable, inventory, and warranty, were no longer necessary given our collection of receivables, turnover of inventories, and warranty experience.

Utility Vehicles Segment. Utility Vehicles segment revenues reached $83.0 million for the combined year ended January 31, 2004 as compared to $92.9 million in fiscal year 2003. This decrease was mainly due to lower unit shipments of snow grooming units resulting from poor snow conditions in winter 2003 which we believe reduced replacement demand in winter 2004 offset somewhat by higher prices.

Segment operating profit amounted to $3.2 million or 3.9% of segment revenues in the combined year ended January 31, 2004 as compared to $1.7 million or 1.8% in the year ended January 31, 2003. The increase results mainly from higher margins due to higher prices of snow grooming units and used equipment.

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Year ended January 31, 2003 compared with year ended January 31, 2002

Revenues increased by $456.3 million, or 22.6%, from $2,020.0 million for the year ended January 31, 2002 to $2,476.3 million for the year ended January 31, 2003. Of this increase, approximately $274.1 million was due to increased sales of Marine Engines in fiscal 2003 resulting from including a full year of results from that business which was acquired in March 2001. This increase is also due to improved sales of $181.1 million in Power Sports products, largely as a result of increased sales of ATVs and personal watercraft.

Gross profit increased by $103.5 million, or 22.5%, from $459.5 million for the year ended January 31, 2002 to $563.0 million for the year ended January 31, 2003. This increase is due to the favorable impact on fiscal 2003 of changes in estimates related to the Outboard Marine acquisition and other changes in estimates, our change in accounting policy for sales promotions which benefited fiscal 2003 by $20.0 million, and higher sales volume in all segments.

Total operating expenses increased by $28.1 million, or 7.7%, from $365.1 million for the year ended January 31, 2002 to $393.2 million for the year ended January 31, 2003. This increase is the result of the inclusion of a full year of results from our Marine Engines segment, increased research and development expense to develop our new E-TEC technology, and increased marketing expenses to promote the expansion of our ATV product offerings. In fiscal 2002, our operating expenses included certain non-recurring items, which offset the $28.1 million increase mentioned above . These non recurring items in fiscal 2002 include the write-down of assets associated with our exit from the catalog direct order business, legal expenses incurred to defend against a patent infringement claim, net of a benefit related to a change in estimate related to our acquisition of the assets of Outboard Marine.

Interest expense increased by $0.8 million, or 19.5%, from $4.1 million for the year ended January 31, 2002 to $4.9 million for the year ended January 31, 2003. The increase is primarily attributed to increased borrowings from Bombardier.

Income tax expense for the year ended January 31, 2002 was $23.7 million with an effective tax rate of 26.2%, as compared to an income tax recovery for the year ended January 31, 2003 of $50.1 million with an effective tax rate of 30.4%. The higher effective tax rate in 2003 is attributable to a different mix of accounting profits and losses between tax jurisdictions.

Net income increased by $48.2 million, or 72.4%, from $66.6 million for the year ended January 31, 2002 to $114.8 million for the year ended January 31, 2003, for the reasons described above.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, related amounts of revenues and expenses and disclosure of contingent assets and liabilities. We based our estimation on historical experience and various other assumptions that are believed to be reasonable and consistent with industry practice. Actual results may differ from these estimates under different assumptions or conditions. We believe the following are our critical accounting policies and estimates used in the preparation of our Consolidated Financial Statements.

Inventory valuation

Raw materials and work in process, finished products and parts and accessories are valued at the lower of cost (average cost or first-in, first-out) and replacement cost (raw materials) or net realizable value. We make ongoing estimates relating to the net realizable value of inventories, based upon our assumptions about future demand and market conditions. If we estimate that the net realizable value of our inventory is less than the cost of the inventory recorded in our books, we record a reserve equal to the difference between the cost of the inventory and the estimated net realizable value. This reserve is recorded as a charge to cost of sales. If changes in market conditions result in reductions in the estimated realizable value of our inventory below our previous

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estimate, we would increase our reserve in the period in which we made such a determination and record an expense to cost of sales.

Our estimate of net realizable value is reevaluated on a quarterly basis. Experience has shown that the net realizable value can be volatile, therefore, our process relies upon our estimation of future sales promotions and incentives programs, future warranty expenses and reactions from the dealers at the annual tradeshows. As actual information becomes available, it is used to modify our estimated future selling prices and related costs to manufacture and sell our inventories, in order to evaluate their net realizable value.

Goodwill and other intangible assets

Intangible assets with an indefinite life such as goodwill, trademarks and license agreement are tested for impairment annually on the basis of their fair value, or more frequently if events or circumstances indicate that the assets might be impaired. If the carrying value exceeds its fair value, impairment is measured as the excess of the carrying amount over the implied fair value of the intangible asset. Fair value is determined using discounted expected future net cash flows. The valuation of goodwill and other indefinite-life intangibles may be affected by, among other things, our business plan for the future, and estimated results of future operations.

Revenue Recognition

We recognize revenues when title passes upon delivery of products to customers and collection is reasonably assured. As part of our revenue recognition policy, we recorded estimated product returns within the normal course of business or resulting from repossession under customer financing programs as reductions to revenues at the time revenues are recorded. We base our estimates on historical rates of product returns and repossessed products, and specific identification of outstanding returns or repossessed products not yet received from customers or financing companies. Actual returns and repossessed products in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected returns or repossessed products were significantly greater or lower than the reserves we had established, we would record a reduction or increase to revenues in the period in which we made such determination.

Our estimates of returns and repossession of products is reevaluated on a quarterly basis based on actual data as compared with the reserves that we had established. No material losses have been incurred under these agreements, however adverse change in retail sales could cause this situation to change.

Sales of account receivables

We sell receivables to third parties. Transfers of accounts receivables are recognized as sales when we are deemed to have surrendered control over these assets, which generally occurs at the time of delivery, and consideration other than beneficial interest in the transferred assets was received by us. When the transfer is considered a sale, we remove the assets sold from the balance sheet, recognize at fair value the assets received and the liabilities incurred and record a gain or loss on the sale. Such gain or loss depends in part on the previous carrying amount of the financial assets involved in the transfer, allocated between the assets sold and the retained interests based on our estimates of their relative fair values at the date of transfer. The retained interest represents the difference between the carrying value of the receivables transferred to the applicable financing company and the proceeds received. In certain circumstances upon a dealer default, we are required to repurchase receivables sold. Retained interests are carried at fair value and periodically reviewed for impairment. Market value quotes are generally not available for retained interests, therefore we estimate fair value based on the present value of future expected cash flows using management’s best estimates of the key assumptions for credit losses, prepayment speed and discount rates.

Sales promotions and incentive programs

Sales promotion and incentive programs include dealer and distributor rebates, volume discounts and retail financing programs. We generally provide for estimated sales promotion and incentive expenses at the later of

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revenue recognition or the announcement of sales promotion and incentive programs. Sales promotion and incentive expenses are estimated based on current programs, historical rates for each product line, inventory levels at the dealer network and future forecasted sales of the dealer network. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the customer usage rate varies from historical trends. Adjustments to sales promotions and incentives accruals are made from time to time as actual usage becomes known in order to properly estimate the amounts necessary to generate consumer demand based on market conditions as of the balance sheet date. Historically, sales promotion and incentive expenses have been within our expectations and differences have not been material.

Product warranties

The estimated warranty is accrued for each product at the time of sale. Estimates are principally based on assumptions regarding lifetime warranty costs of each product line and each model year of that product line, where little or no claims experience may exist. In addition, the number and magnitude of additional service actions expected to be approved, and policies related to additional service actions, are taken into consideration. Additional service action costs may occur due to certain factors such as weather and its impact on product usage and product recalls. Due to the uncertainty and potential volatility of these estimated factors, changes in our assumptions could materially affect net income.

Our estimate of warranty is reevaluated on a quarterly basis. Experience has shown that initial data for any given model year can be volatile; therefore, our process relies upon long-term historical averages until sufficient data are available. As actual experience becomes available, it is used to modify the historical averages to ensure that the forecast is within the range of likely outcomes. Resulting balances are then compared with present spending rates to ensure that the accruals are adequate to meet expected future obligations. While we believe that the warranty provision is adequate, such amounts estimated to be payable could differ materially from what will actually occur in the future.

Litigation

We incur expenses on claims as a result of legal actions against us. We record a liability for our non-insured obligations. We estimate our liability obligations based on historical trends and a review of product performance. Any liability recorded is established for reported and unreported claims of injuries or damages that occurred prior to the date of our financial statements. While we believe that the product liability reserve is adequate, adverse outcomes of products liability claims could have a material adverse effect on our financial position.

Redeemable Preferred Shares

Upon occurrence of certain future events, which we have determined to be likely to occur, redemption of our Class A Preferred Shares for cash would be mandatory. As a result, the estimated fair value of the obligation to redeem the Class A Preferred Shares (“Redeemable Preferred Shares”) was recorded as a liability on the date of issue. The carrying value of the redeemable preferred shares is accreted to its redemption value through charges to operations over the period up to their estimated redemption date based on the effective yield method.

The estimated redemption date is based on expectations as to when events triggering mandatory redemption are most likely to occur. Timing of the events could differ from estimates or may never occur. If the triggering events do not occur within a specified future period, the shares would never become mandatorily redeemable, and would accordingly be reclassified to equity on a prospective basis.

Liquidity, Capital Resources and Financial Position

Cash paid for the acquisition of the recreational products business on December 18, 2003 was $757.2 million. This amount includes $713.3 million, net of cash acquired of $196.7 million, paid on the date of

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acquisition plus the settlement of acquisition related accruals of $43.9 million during the 44-day period ended January 31, 2004. Acquisition related accruals outstanding as of April 30, 2004 totalled $24.8 million including the restructuring related accruals of $19.8 million. Our preliminary restructuring plan established as part of the acquisition is being executed and the final plan should be presented to our board of directors during the fourth quarter. Restructuring costs of $5.0 million were paid during the three-month period ended April 30, 2004. We also issued redeemable preferred shares with a fair value of $42.7 million as a non-cash consideration for the acquisition. The acquisition was partly financed through the issuance of capital stock for an amount of $304.5 million and the issuance of long-term debt of $591.9 million net of issuance costs of $46.1 million. The balance sheet as of January 31, 2004 reflects the impact of the acquisition on the carrying value of assets and liabilities.

Our primary sources of funds are provided by cash balances, cash from operating activities, and borrowings under our $250.0 million revolving credit facility while our primary uses of funds are capital investments and working capital. The restrictive covenants in our senior secured credit facility limit our ability to incur additional indebtedness, pay dividends, make investments, grant liens, sell our assets, and engage in certain other activities. However, based on our current level of operations, we believe that remaining cash on hand, cash flows from operations and available borrowings under the revolving credit portion of our senior secured credit facility will enable us to meet our working capital, capital expenditure, debt service and other funding requirements for at least the next 12 months.

The seasonality of production and shipments causes working capital requirements to fluctuate during the year. Typically, working capital needs grow through the spring and summer and decline through the autumn and winter with a peak in mid-summer. We believe that cash and availability under our credit facility provide sufficient liquidity for our operations.

We are significantly leveraged. As of April 30, 2004, our debt structure consisted of U.S.$200.0 million (approximately $274.1 million) aggregate principal amount of senior subordinated notes offered hereby, and a senior credit facility, consisting of a (i) U.S.$280.0 million ($383.8 million) term loan facility with a maturity of seven years, and (ii) $250.0 million revolving loan facility with a maturity of five years. At April 30, 2004, the term loan facility was drawn in full and the revolving loan facility was undrawn (excluding approximately $32.2 million of outstanding letters of credit).

Our borrowings under our senior secured credit facility are, at our option (1) in the case of U.S. dollar denominated loans, equal to either the U.S. prime rate, U.S. base rate or an adjusted LIBOR rate, (2) in the case of Canadian dollar denominated loans, equal to the Canadian prime rate, and (3) in the case of Euro denominated loans, equal to an adjusted EUROLIBOR rate, in each case plus an applicable margin. On the last day of each calendar quarter we will be required to pay each lender a customary commitment fee in respect of any unused commitments under the revolving loan facility. Our senior secured credit facility requires scheduled amortization payments on the term loans in annual amounts equal to 1% of the original term loans, in semi-annual installments for a period of six years, with the balance paid in four equal quarterly installments thereafter. Subject to exception, our senior secured credit facility requires mandatory prepayments of the loans in the event of certain asset sales or other asset dispositions, issuances of equity securities or debt securities or if we have annual consolidated excess cash flow. Our senior secured credit facility is guaranteed by our parent and all of our existing and future subsidiaries that can provide a full and unconditional guarantee, and is secured by a first priority security interest in substantially all of our and their existing and future assets, and a first priority pledge of our capital stock and the capital stock of those subsidiaries, as well as intercompany notes issued by our non-guarantor subsidiaries and the capital stock of our non-guarantor subsidiaries, subject to certain exceptions agreed upon with our lenders and local law requirements. Our senior secured credit facility matures December 2010. For a more complete summary of the provisions of our senior secured credit facility, see “Description of Our Senior Secured Credit Facility.”

Our U.S.$200.0 million ($274.1 million) senior subordinated notes bear a fixed rate of 8 ³/8%, with interest payable semi-annually in June and December. Our senior subordinated notes are due December 2013. For a more complete summary of the provisions of our senior subordinated notes, see “Description of the Exchange Notes.”

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For the three-month period ended April 30, 2004 (Unaudited)

Cash as of April 30, 2004 totalled $152.5 million. At that date, the revolving credit facility had no borrowings and availability stood at $250.0 million less issued letters of credit of $32.2 million.

Net cash provided by operating activities before net change in working capital items totalled $4.0 million for the three-month period ended April 30, 2004 ($8.9 million as of April 30, 2003), of which $50.0 million was used to reduce accounts payable and accrued liabilities. As a result, cash flows used for operating activities totalled $29.2 million as compared to $150.0 million for the prior period. Cash of $6.4 million was used to settle acquisition-related accruals pertaining to the business acquisition. Cash of $8.7 million was utilized to make capital expenditures. We expect to spend approximately $105.0 million in capital expenditures in fiscal year 2005, primarily in connection with the continuation of new product launches, and providing for maintenance of capacity, infrastructure and equipment at our manufacturing facilities.

As of April 30, 2004, we had share capital of $311.0 million, redeemable preferred shares outstanding of $44.2 million, and long-term debt outstanding of $661.4 million. The preferred shares with mandatory redemption features have been classified as long-term liabilities. We will have to redeem the preferred shares on the occurrence of future events, which we consider likely to occur. The carrying value of the preferred shares is accreted to its redemption value through charges to operations over the period up to their redemption date, based on the effective yield method. During the first quarter of fiscal 2005 our parent company contributed an additional $6.5 million resulting from the net proceeds received as part of the management share subscription agreement. The contribution was accounted for as an increase in shareholder’s equity.

Our U.S.$200.0 million ($274.1million) senior subordinated notes bear a fixed rate of 8.375%, with interest payable semi-annually in June and December. Our senior subordinated notes are due December 2013.

The strengthening of the Canadian dollar in relation to the U.S. dollar resulted in an increase in our long-term debt in an amount of $21.2 million due to the conversion of our long-term debt from U.S. dollars to Canadian dollars at the exchange rate in effect at the end of the period.

For the 44-day period ended January 31, 2004

Cash as of January 31, 2004 totalled $196.2 million. At that date, the revolving credit had no borrowings and availability stood at $250.0 million less issued letters of credit issued of $54.5 million.

Net cash provided by operating activities totalled $79.6 million for the 44-day period ended January 31, 2004 of which $21.0 million was utilized to make capital expenditures and $0.5 million to repay long-term debt.

As of January 31, 2004, we had share capital of $304.5 million, redeemable preferred shares outstanding of $43.2 million, and long-term debt outstanding of $640.0 million. The preferred shares with mandatory redemption features have been classified as long-term liabilities. We will have to redeem the preferred shares on the occurrence of future events, which we consider likely to occur. The carrying value of the preferred shares is accreted to its redemption value through charges to operations over the period up to their redemption date, based on the effective yield method.

At January 31, 2004 the revolving loan facility was undrawn (excluding approximately $54.5 million of outstanding letters of credit).

Off-Balance Sheet Obligations

We have agreements with various finance companies to provide financing to our dealers to facilitate their purchase of our products. These agreements improve our liquidity by financing dealer purchases of products without requiring substantial use of our working capital. A significant percentage of our sales of snowmobiles,

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watercraft, ATVs, sport boats, and outboard engines to dealers in North America are financed under such arrangements. In the event of a dealer default, we may be required to repurchase new and unused products at the total unpaid principal balance. No material losses have been incurred under these agreements. However, an adverse change in market conditions or other factors could cause this situation to change and thereby require us to repurchase repossessed units.

For the three-month period ended April 30, 2004 (Unaudited)

The total amount of floorplan financing provided to dealers during first quarter ended April 30, 2004, was $314.3 million compared to $236.9 million in the same period ended April 30, 2003. The amount outstanding as of April 30, 2004, was $820.3 million.

As a sales incentive, we generally provide a limited free floorplanning period to our dealers during which we pay interest to the financing company. Thereafter, the dealer pays interest to the financing company. Our portion of the related financing charges for the three-month period ended April 30, 2004 and 2003 was $7.2 million and $8.4 million, respectively.

As part of our working capital management, we sell receivables to related and third parties. The total amount of factoring was $211.2 million and $247.0 million for the three-month period ended April 30, 2004 and 2003, respectively, of which the amounts outstanding as of April 30, 2004, were $181.4 million. Related financing charges for the first quarter ended April 30, 2004 and 2003 amount to $1.6 million and $1.9 million, respectively. In certain circumstances, we are required to repurchase receivables sold to the financing company for an amount equal to the total amount owed by the applicable customer.

For a more complete description of these arrangements, see “Description of Other Financing Arrangements.”

For the 44-day period ended January 31, 2004

The total amount of floorplan financing provided to dealers during the 44-day period ended January 31, 2004, was $178.5 million. The amount outstanding as of January 31, 2004, was $760.4 million.

Our portion of the related financing charges, related to free floorplanning period provided to our dealers, for the 44-day period ended January 31, 2004 was $3.6 million.

The total amount of factoring was $265.6 million for the 44-day period ended January 31, 2004, of which the amounts outstanding as of January 31, 2004, were $218.7 million. Related financing charges for the 44-day period ended January 31, 2004 amount to $0.8 million. The outstanding balance for receivables sold to Bombardier Capital was $130.1 million at January 31, 2004.

Hedging Activities

As of February 1, 2004, we have designated as hedges of anticipated future sales in U.S, dollars and Australian dollars and of anticipated future purchases in Euros, foreign exchange contacts acquired as part of the acquisition and entered into since December 18, 2003. Gains and losses associated with foreign exchange contracts designated as hedges are recognized in the statement of operations on settlement.

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Contractual Obligations

We have not entered into significant and material contractual obligation during the period ended April 30, 2004. The following is a summary of our contractual cash obligations as of January 31, 2004:

	Payments Due By Period
Contractual Obligations	Less than 1 year		1-2 years		3-5 years		After 5 years		Total
	($ in millions)
Term loans under our senior credit facility (including mandatory interest payments)(1)	$	25.9	$	25.7	$	75.8	$	385.3	$	512.7
Senior subordinated notes (including mandatory interest payments)		22.0		22.2		66.7		376.4		487.3
Other existing debt		1.3		—		2.0		—		3.3
Purchase Commitments(2)		7.6		7.6		—		—		15.2
Operating leases		14.1		7.2		6.5		2.9		30.7
Total contractual cash obligations	$	70.9	$	62.7	$	151.0	$	764.6	$	1,049.2

(1) Assumes the applicable interest rate of 6.0% as of January 31, 2004

(2) Under a contractual obligation with a Japanese marine engine manufacturer, we are committed to purchase a minimum quantity of marine engines for two remaining model years

In addition to the obligations set forth above, pursuant to the new management agreement with affiliates of our Sponsors, such affiliates will be paid an aggregate annual management fee of U.S.$2.25 million. See “Certain Related Party Transactions—Management Agreement.”

Quantitative and Qualitative Disclosure of Market Risks

Inflation

We do not believe that inflation has had a material impact on our results of operations. While our cost of sales are subject to inflationary pressures and price fluctuations of the raw materials we use, we have generally been able over time to recover the effects of inflation and price fluctuations through sales price increases.

Foreign Exchange Rates

Our results of operations are subject to foreign exchange fluctuation related to the translation of financial statements of foreign operations into Canadian Dollars. In addition, transactions denominated in currency other than Canadian dollars for our Canadian operations are also subject to foreign exchange fluctuation. In order to mitigate foreign exchange impact on our Canadian operations, we enter into foreign exchange contracts.

We believe that exchange rate movements, particularly of the U.S. Dollar to the Canadian Dollar and European Union Euro to the Canadian Dollar do have a material impact. Our primary exposures are to U.S. Dollars based on sales and European Union Euros based on purchases. We are also exposed to foreign exchange movements on our U.S. Dollar denominated debt. Our current practice is to utilize derivative financial instruments to manage foreign currency exchange rate risks, though we may increase or decrease our hedging activities in the future.

We purchase financial derivatives, primarily forward contracts, to reduce foreign exchange volatility. Currently, our objective is to be 80% protected over the next 12 months and 50% protected over the following 12 months (months 13 to 24). We typically review our foreign exchange exposure monthly. We are exposed to credit loss in the event of non-performance by the other party to the derivative financial instruments. We limit this exposure by entering into agreements directly with a number of major financial institutions that meet our

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credit standards and that are expected to satisfy fully their obligations under the contracts. We view derivative financial instruments as a risk management tool and do not use them for speculative trading purposes.

Derivative contracts outstanding as of January 31, 2004 have maturity dates between 1 and 24 months. Notional amounts of foreign exchange contracts outstanding as of January 31, 2004 to manage foreign exchange exposure on U.S. Dollar sales, Japanese YEN sales and EURO sales were $845.4 million, $2.4 million and $42.2 million, respectively, and to manage foreign exchange exposure on EURO denominated purchases were $349.6 million. Because these contracts are for foreign currency denominated transactions, any change in the fair value of the contracts should be offset by changes in the value of the underlying transaction.

Interest Rates

Our $250.0 million revolving credit facility and U.S. $280.0 senior secured credit facility bear floating rate of interest based on LIBOR or “prime” rates plus applicable margin. At January 31, 2004, the effective interest rate on credit facility borrowings was 6.0%. We have entered into interest rate swap agreements in order to manage exposures to interest rate fluctuations. At February 19, 2004, we had fixed U.S. $70 million or 25% of the outstanding senior secured credit facility at an effective rate of 5.525% until February 2007.

Our U.S. $200.0 million senior subordinated notes bear a fixed rate of 8 ³/8%, with interest payable semi-annually in June and December.

Seasonality

We have historically realized higher sales of snowmobiles in the fall and summer, higher sales of personal watercraft in the fall and spring and higher sales of utility vehicles in the fall. Seasonal trends in our other businesses are not material.

Pension and Employee Benefits

We maintain non-contributory defined benefit plans that provide for pensions, other post-retirement and post-employment benefit plans for most of our employees in Canada, the U.S, Austria and Belgium. We also provide a defined contribution plan for our employees in the U.S.

Following the Transactions, new plans have been setup and registered with government authorities and ownership of certain plans has been transferred to us. Transition from Bombardier is now completed. As part of the Transaction, an agreement was reached with Bombardier with respect to Canadian pension plans, the purpose of which was to transfer a proportionate share of assets to fully fund liabilities assumed by us under our new plans as of December 18, 2003 on a funding basis. Government approval is still pending.

We use a measurement date of December 31 for accounting purposes.

Significant Assumptions

Weighted average actuarial assumptions used in the calculation of the projected benefit obligations and pension and other benefits cost were as follows; discount rate: 5.66%, expected return on assets: 6.76%, rate of compensation increase: 3.89% and health care cost trend: 13% declining to 5.5% over 10 years.

The determination of these assumptions was made by management after a periodic review of factors, such as long-term investment return expectations prepared by consultants or economists, historical investment returns, long-term inflation expectations and bond yields and recommendations from actuaries. We use the market value of assets for purposes of measuring the pension cost. We also reflect the cost of future life expectancy improvements.

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Based on the current economic environment and tendency toward increasing long bond yields, management does not expect these assumptions to change in such a way so that it would result in higher re-measured projected benefit obligations.

Financial Impact of the Plans

As at January 31, 2004, the deficit for all plans combined amounted to $125.8 million. Note that a significant portion of that deficit ($90.0 million) comes from unfunded pension plans in Austria where regulations do not require pre-funding and from other unfunded benefit plans. The expected pension and other benefits cost for fiscal year ending January 31, 2005 is expected to be $20.9 million.

It is estimated that a decrease of 50 basis points in the discount rate assumption would increase the projected benefit obligation for pension plans by approximately $20.3 million and for other benefits by approximately $1.5 million. The decrease would also increase the pension and other benefit costs by $1.8 million.

It is further estimated that a decrease of 50 basis points in the current long term expected return on assets would increase the pension cost by approximately $0.5 million.

Unrecognized Amounts

As at January 31, 2004, the combined plans deficit is fully recognized in our books.

Our policy is to amortize any future net actuarial gains and losses, based on the market value of plan assets, over 10% of the greater of the pension obligation and the market value of plan assets, as well as the cost of any future plan improvements over the estimated average remaining service life of the plan members.

Funding

Expected cash contributions to defined benefit pension plans for fiscal year 2005 are estimated to be $11.9 million.

Recent Accounting Pronouncements

Canadian GAAP

In June 2003, the CICA issued Accounting Guideline No. 15, “Consolidation of Variable Interest Entities” (“AcG No. 15”). AcG No. 15 establishes the consolidation criteria for variable interest entities based on a risks-and-rewards model rather than on a control-based model. The Accounting Standards Board is expected to issue proposed revisions to AcG No. 15. These proposed recommendations are expected to be effective as of the fourth quarter of fiscal year 2005 and are not expected to have a material impact on our financial statements.

In March 2003, the CICA issued Handbook Section 3110, “Asset Retirement Obligations”, which establishes standards for the recognition, measurement and disclosure of asset retirement costs. The new Section harmonizes Canadian requirements with U.S. GAAP. The standard requires that a liability for an asset retirement obligation is to be recognized at its fair value in the period in which it is incurred. This new Section is effective for fiscal years beginning on or after January 1, 2004, although earlier application is encouraged. We adopted this new standard effective December 19, 2003, and it did not have a material effect on our financial statements.

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BUSINESS

General

We are a leading designer, manufacturer and distributor of motorized recreational products worldwide. Our business consists of a diversified portfolio of products with industry leading and improving market shares. We have a number one market share position in the primary markets of each of our core products: snowmobiles (the Ski-Doo and Lynx brands), personal watercraft (the Sea-Doo brand), sport boats (the Sea-Doo brand) and snow grooming vehicles. We also recently entered the market for outboard engines, by acquiring the Johnson and Evinrude brands from Outboard Marine Corporation (which brands have the highest installed base of outboard engines in North America) and for all terrain vehicles, or ATVs, by launching our own product line. Due to our market leading positions, our products have a large installed base that generates repeat business from our customers and supports a recurring stream of revenue from related parts, accessories and clothing sales.

Our products are distributed worldwide through approximately 1,500 power sports dealers, 2,000 marine dealers, and 105 other distributors.

Our Businesses

Power Sports Segment

Our power sports segment includes our snowmobile, personal watercraft, ATV, sport boat and small engine businesses, including any related parts, accessories and clothing operations. During the combined year ended January 31, 2004, our power sports division generated revenues of approximately $1,866.8 million.

Snowmobiles. Our founder introduced the first modern day snowmobile in 1959. We currently produce a full line of products marketed under the Ski-Doo brand name in North America and Europe and the Lynx brand name in Europe. The International Snowmobile Manufacturer’s Association estimates that the size of the snowmobile market in North America was approximately U.S.$1.1 billion in model year 2004. We lead this market with an approximate 37% share of retail units sold in model year 2004. We also lead the European market with an approximate 47% share of retail units sold in the same model year. We attribute our success in these markets to our product performance and innovation and our broad distribution network. Our products have been recognized with industry awards for many years, including “2004 Snowmobile of the Year” from Snow Goer Magazine and “Real World Sled of the Year” by SnowTrax Television in 2004. In model year 2003, we released the REV platform, which changes the rider’s position on the sled, improving maneuverability and comfort. Widespread market acceptance of the design helped us increase our North American market share from 30% in model year 2002 to 37% in model year 2004. Our distribution network consists of approximately 800 dealers in North America, approximately 70% of which we believe exclusively sell our products.

We believe the timing of snowmobile sales is affected by trends in snowfall. From 1994 up to 1998, snowfall was above 20-year average levels in the U.S. and industry unit sales increased by approximately 9% per year during that period. We believe that the above average snowfall contributed to an acceleration of sales in these years that would have otherwise been made after 1998. Because of this trend and several subsequent years of below average snowfall, industry unit sales experienced a compounded annual decrease of approximately 5% from model year 1999 to model year 2004. We believe that industry unit sales are positioned to increase as demand returns to historical levels. Despite these negative trends, we were able to increase our sales of retail units by approximately 4% from model year 2002 to model year 2004. Due to our more than 40-year presence in the industry and our market leadership, we have a large installed base of snowmobiles. Through the sale of related parts, accessories and clothing, this installed base generates a recurring and high-margin stream of revenues.

Personal Watercraft. We introduced the first personal watercraft in 1968. We currently produce a full line of personal watercraft marketed under the Sea-Doo brand name. The National Marine Manufacturer Association

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estimates the U.S. retail market was approximately U.S.$716.5 million for calendar year 2003. We have led this market for several years and have steadily increased our share of retail units sold in North America from 30% in model year 1992 to over 47% in model year 2003. Our gains in market share have been, in part, due to our product performance and innovation as well as our broad dealer network. Our products have been recognized with industry awards for many years, including “2004 Editor’s Choice in the Musclecraft Class” from Watercraft World Magazine for our Sea-Doo RXP. In model year 2004, we introduced an “inter-cooled supercharged” version of our 4-TEC engine into the Sea-Doo RXP, which at 215hp is the industry’s most powerful personal watercraft. We believe our customers are attracted to personal watercraft with 4-TEC engines due to their performance, lower emissions and sound levels. Our distribution network consists of approximately 850 dealers in North America approximately 55% of which we believe exclusively sell our products.

During the mid-1990s, personal watercraft use gained popularity. The large number of new users created problems with safety and pollution. This resulted in more regulatory scrutiny, with several bans and restrictions proposed against the use of personal watercraft. Due in part to this increased regulatory activity, new unit sales across the industry declined approximately 14% annually from model year 1995 to model year 2001 in the United States. Personal watercraft have significantly improved noise control and emissions standards, and the market has since started to stabilize, declining about 2% annually from model year 2001 to model year 2003. The active regulatory environment has also eased with several favorable rulings at important water destinations in the United States. We expect the market to be relatively stable going forward. Despite the declining industry volumes in the past five years, we have continued to gain market share. As a result of our history of market leadership, we have a large installed base of personal watercraft that generates a recurring and high-margin stream of revenues from the sale of related parts, accessories and clothing.

All-terrain Vehicles. The first 3-wheel ATV product was introduced in North America in 1971, and the modern 4-wheel ATV was introduced during the late 1980s. Since that time, the North American market has expanded each year. The Motorcycle Industry Council estimates the U.S. retail market was approximately U.S.$4.2 billion in 2003. We believe that, similar to other consumer product categories that have experienced rapid growth, the ATV market will contract and then stabilize over the next few years. We began producing a limited line of ATVs in 1998 to leverage our manufacturing facilities, technology and dealer network. Since that time, we have been expanding our ATV product lines to cover most key market segments, including the utility and recreational segments of the market. Through the introduction of new product lines, we have been able to increase our share of North American retail units sold to approximately 4%. Our products have been recognized with industry awards, including “2004 Innovation of the Year” from ATV Guide. Our distribution network consists of approximately 1,150 dealers in North America, approximately 50% of which we believe exclusively sell our products. In addition, we have entered into a strategic supply agreement with Deere & Company to manufacture John Deere-branded ATVs which are sold through Deere & Company’s dealer network in North America. We believe this alliance will increase our volume in the utility segment of the ATV market, which is less volatile than the recreational segment of the market. Also, Deere & Company has started manufacturing the Bombardier Sarasota 1000, a compact side-by-side vehicle that we sell under our brand through our dealer network in North America.

Sport Boats. We entered the recreational boating industry in 1994 as an extension of our already successful personal watercraft business. Our model year 2004 line-up is composed of nine platforms and twelve different models of sport boats marketed under the Sea-Doo brand name, which address sport performance and all-purpose recreational needs of consumers in the sport boat segment of the recreational boating industry. Sport boats represent a specific niche in the market, representing motorized boats that utilize jet-power rather than conventional propeller propulsion. Relative to conventional boats, sport boats provide superior acceleration, handling, increased safety for swimmers and marine wildlife and better accessibility to shallow waters. The U.S. sport boat retail market was estimated by the National Marine Manufacturer Association, or NMMA, to be approximately U.S.$115.3 million in 2003. According to Statistical Surveys, Incorporated, we lead the sport boat market in North America with a market share of approximately 66% in 2003.

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Small Engines. We manufacture small engines for a broad array of vehicles and equipment under the Rotax brand name. These engines are used in our Ski-Doo and Lynx snowmobiles, our Sea-Doo personal watercraft and sport boats, our ATVs, as well as in other manufacturers’ motorcycles, scooters, karts and small and ultra-light aircraft. We believe we are the world’s leading supplier of engines for light and ultra-light aircraft. In some cases, we have established long-term relationships with these other manufacturers to purchase our small engines, including BMW and Aprilia for motorcycle engines.

Marine Engines Segment

In March 2001, we acquired most of the engine manufacturing assets of Outboard Marine Corporation, or Outboard Marine. Outboard Marine was a leading manufacturer of engines built to service the boating industry, but had been in bankruptcy proceedings since December 2000. Outboard Marine had an approximate 27% U.S. wholesale market share before bankruptcy, which fell to 4% primarily as a result of the bankruptcy. The assets we acquired included the Johnson and Evinrude outboard engine brands and a direct-injection technology, which allows 2-stroke engines to meet stricter emission standards. Our marine engine segment currently sells all three principal engine types, 2-stroke carbureted engines, 2-stroke direct injection engines and 4-stroke engines.

The NMMA estimated the U.S. outboard engine market to be approximately U.S.$2.55 billion in 2003. The industry is currently experiencing a technology shift prompted by newly mandated emissions standards. As a result of these regulations, the industry is moving away from traditional 2-stroke carbureted engines to 2-stroke direct injection and 4-stroke engines. We believe we have a leading market share of 2-stroke direct injection engines, a lower emission alternative to the 2-stroke carbureted engine. We expect to benefit as owners of 2-stroke carbureted engines switch to lower-emission engines. Evinrude direct injection engines received “Highest in Customer Satisfaction for two stroke engines” from J.D. Power & Associates in 2003 for engines produced in 2002 and early 2003, including our first full year of ownership. In addition, our new Evinrude E-TEC technology won the 2003 “Innovation Award” from the National Marine Manufacturer Association, as well as the 2003 “Editor’s Choice” award from Motorboating magazine. As a result of the Outboard Marine Corporation asset acquisition and the subsequent improvements we have instituted, our share of the North American wholesale market has grown from approximately 4% in 2001 to approximately 14% in calendar year 2003. Due to the long history of the Johnson and Evinrude brands, we have a large installed base, estimated to be approximately 40% of all installed outboard engines in the U.S. in 2003. This installed base generates a recurring and high-margin stream of revenues from the sale of related parts and accessories. During the combined year ended January 31, 2004, our marine engines segment generated revenues of approximately $542.3 million.

Related Parts and Accessories

We provide parts, accessories and clothing related to our power sports and marine engine products. The parts we sell include consumables (e.g., oil), wearable components (e.g., spark plugs and transmission belts) and replacement parts (e.g., pistons and windshields), while the accessories we sell include products that enhance or modify vehicle functionality (e.g., second passenger seats, colored covers and racks). Parts and accessories sales are driven mainly by the installed based of vehicles sold in current and past seasons and are recurring in nature. The parts business offers very good profitability. Of the parts and accessories we sell, many are components, gauges and other parts which are not provided by another vendor. This captive parts business is the most profitable portion of this business. We also sell clothing, mainly in connection with our snowmobile and personal watercraft products, which reflects our brands and is designed with colors and logos to match our products.

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Our Competitive Strengths

Diversified Portfolio of Leading Market Positions. We have become a global leader in recreational motorized products and we believe we have developed some of the most recognized and respected brands in our industries. We have been providing our customers motorized recreational products for over 40 years, resulting in the development of a strong portfolio of quality brands that have achieved market leadership positions, including:

• Ski-Doo represents approximately 37% of the snowmobile market in North America as of Season 2004 and we believe Ski-Doo and Lynx together represent approximately 47% of the snowmobile market in Europe.

• Sea-Doo currently has over 47% of the personal watercraft market in North America and approximately 46% of the worldwide market outside North America.

• The Sea-Doo brand has also been successfully transferred to sport boats and has captured an approximate 66% share of the North America sport boat market.

• The Johnson and Evinrude brands have a large installed base, estimated to be 40% of all installed outboard engines in the United States.

• We believe Rotax is the world’s leading supplier of engines for light and ultra-light aircraft.

Market Share Momentum in all Businesses. Despite our leading market position in several of our businesses, we have continued to gain market share from competitors in each of our main businesses. In the snowmobile business, our share of the North American market has grown from 29% in model year 2000 to 37% in model year 2004, while in Europe, we believe our market share has increased from 40% to 47% during the same period. In personal watercraft, our North American market share increased from 42% in model year 2000 to 47% in model year 2003. We have increased our market share in our newer ATV and outboard engines businesses, with ATVs increasing from less than 1% of the North American market in January 2000, to approximately 4% for calendar year 2003. In outboard engines, the Johnson and Evinrude share of the wholesale North American market has increased from approximately 4% at the end of 2001 to approximately 14% for calendar year 2003. We believe the gains in market share reflect our focus on product innovation and the success of new technologies such as Evinrude E-TEC outboard engines, the REV platform in snowmobiles and the GTX 4-TEC model in personal watercraft.

Expertise in Innovative Product Development. We have a history of innovation, beginning with the invention of the snow utility vehicle in 1945, followed by the invention of the modern-day snowmobile in 1959 and the creation of the personal watercraft in 1968. We have demonstrated expertise in developing new products with the introduction of the first all-terrain vehicle specifically designed for two riders, a new generation of 2-stroke direct injection technology for outboard engines, and a platform for snowmobiles designed to provide a smoother ride and improved maneuverability. We have been recognized by the U.S. Coast Guard and the National Transportation Safety Board for our contribution to recreational boating safety. Our innovations in this industry improve safety for inexperienced riders by allowing owners to temporarily limit a vehicle’s speed and improving maneuverability in off-power and off-throttle situations. These innovative new products help us increase market share and improve our results of operations in the markets in which we compete and keep pace with changes in consumer demands.

Strong and Extensive Dealer Network and Relationships. We believe that our market position is strengthened by our extensive distribution network consisting of approximately 1,500 power sports dealers, 2,000 marine dealers and 105 other distributors. We also have a strategic alliance with Deere & Company under which we manufacture John Deere-branded ATVs that are being sold through their dealer network in North America and Deere & Company manufactures a private label side-by-side utility vehicle that we sell through our dealer network. We believe we have established strong relationships with our dealers through superior customer service, timely delivery, quality products and competitive pricing. We seek to establish long-term relationships with quality dealers. We believe our dealer network, created over the course of our operating history, provides a significant competitive advantage within the markets in which we compete.

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High Quality and Diverse Product Offering. Our commitment to product development has been recognized by both consumers and the industries in which we compete. Ski-Doo was recently selected as “Snowmobile of the Year” by Snow Goer Magazine in 2004 and “Real World Sled of the Year” by SnowTrax Television in 2004. Sea-Doo personal watercraft has received similar distinction, being named “2004 Editor’s Choice in the Musclecraft Class” by Watercraft World Magazine. Our product expertise has also been recognized in the ATV market, where the Outlander MAX was awarded “Innovation of the Year” by ATV Guide in 2004 and “Ingenuity Award” by ATV magazine television in the same year, and in the outboard engine market, where the Evinrude direct injection engine received “Highest in Customer Satisfaction for two-stroke engines” from J.D. Power & Associates in 2003, as well as the 2003 “Editor’s Choice” award from Motorboating magazine. Our design capabilities and technological innovations have also been recognized by various industry publications. The wide range of products we offer allows us to target many different markets effectively. In addition, this diverse base of products allows us to take advantage of the seasonal trends in our businesses.

Experienced Management Team with Strong Track Record. We have an experienced management team that has demonstrated its ability to grow revenue and increase market share while maintaining a corporate culture that is committed to offering our customers an exciting recreational experience. Our chairman, Laurent Beaudoin, has over 40 years experience with Bombardier. As President, CEO and Chairman of Bombardier, Mr. Beaudoin oversaw the growth of that business from a single product snowmobile company with less than $10.0 million in revenue to a diversified manufacturing company with over $21.3 billion in revenue and leading market position in its industries. Our other senior managers have an average of ten years of service with us. Their ability to identify new opportunities and identify new innovative product offerings enables us to remain a leader in the markets in which we compete.

Our Products

Power Sports

Snowmobiles. We produce a broad line of snowmobiles, consisting of 14 models, marketed under the Ski-Doo brand name in North America and Europe and the Lynx brand name in Europe. This broad product offering allows us to successfully compete in all segments of the snowmobile market. Our snowmobiles offer a wide range of standard and optional features that enhance their operation, riding comfort and performance. We also introduce new models every year and our leadership in innovation, technology, style and performance has been recognized through numerous honors and awards, including:

• Ski-Doo MX Z REV 600H.O. SDI—Snowmobile of the Year (Snow Goer Magazine—2004);

• Ski-Doo MX Z REV 600H.O. SDI—Real World Sled of the Year (SnowTrax Television—2004);

• Ski-Doo MX Z REV—Best Trail Sled (SnowTech Magazine—2003);

• Ski-Doo Summit 800/700 X Package—Sled of the Year (SnoWest Magazine—2002);

• Ski-Doo MX Z 800—Snowmobile of the Year (Snow Goer Magazine—2002);

• Ski-Doo MX Z 800—Reader’s Choice (American Snowmobiler Magazine—2001); and

• Ski-Doo Summit 700 Highmark—Mountain Muscle Sled of the Year (SnoWest Magazine—2000).

The REV platform is our latest product innovation. This new design positions the snowmobile driver 12 inches forward, creating a smoother ride and improving maneuverability. The REV has enjoyed considerable success on the racing circuit, winning more races this past season than any other sled, including the SnoCross and HillCross events of the 2004 X-Games and 12 of the 15 races of the 2004 World Snowmobile Association SnoCross Circuit season. In addition, the REV was featured in the recent James Bond movie, Die Another Day. With the introduction of this new platform, we have improved our market share over the past year.

Our 2004 Ski-Doo models carry suggested retail prices ranging from U.S.$4,099 - U.S.$9,949 (excluding the Mini Z and Elite models which retail for U.S.$2,049 and U.S.$17,999, respectively). Our Lynx models carry

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suggested retail prices which are slightly higher. We also generate revenue from the sale of parts, accessories and clothing related to our snowmobile products. The parts we sell are consumables (e.g., oil), wearable components (e.g., spark plugs and transmission belts) and replacement parts (e.g., pistons and windshields), while the accessories we sell are products that enhance or modify vehicle functionality (e.g., second passenger seats, colored covers and racks). Parts and accessories sales are driven mainly by the existing fleet of vehicles sold in current and past seasons and are recurring in nature. We also market clothing that reflects the Ski-Doo brand for enthusiast riders who value having clothing with colors and designs to match their sleds.

Personal Watercraft. We introduced the first sit-down personal watercraft in 1968, and relaunched our personal watercraft in 1988. We introduced the first three-seat personal watercraft in 1990 and the first high-performance product in 1991. We currently produce a full line of personal watercraft, consisting of 11 models, marketed under the Sea-Doo brand name. We also generate revenue from the sale of parts, accessories and clothing related to these products, which sales are driven mainly by the existing fleet of personal watercraft sold in current and past seasons and are recurring in nature. Our personal watercraft products have been recognized with the following honors and awards:

• Sea-Doo RXP—Editor’s Choice in the Musclecraft Class (Watercraft World—2004);

• Sea-Doo RXP—Musclecraft Shootout Winner (Personal Watercraft Illustrated—2004);

• Sea-Doo GTX Supercharged—Editor’s Choice in the Deluxe Cruisers Class (Watercraft World—2004);

• Sea-Doo GTX Supercharged—Deluxe Three-Passenger Shootout Winner (Boating Magazine—2004);

• Sea-Doo GTX 4-TEC—Four-Stroke Shootout Winner (Naturally Aspirated) (Personal Watercraft Illustrated—2003);

• Sea-Doo RX DI—Musclecraft Shootout Winner (Personal Watercraft Illustrated—2003);

• Sea-Doo GTX 4-TEC Supercharged—Boosted Four Stroke Shootout Winner (Personal Watercraft Illustrated—2003).

For the 2003 season, we introduced the GTX 4-TEC Supercharged. We believe that new buyers are attracted by the high horsepower performance and environmental characteristics of the GTX 4-TEC Supercharged. In model year 2004, we introduced an “inter-cooled supercharged” version of our 4-TEC engine into the Sea-Doo RXP, which at 215hp is the industry’s most powerful personal watercraft.

We are also well-known for our support of safe boating training and educational initiatives as well as for our safety innovations. We have been recognized by the U.S. Coast Guard and the National Transportation Safety Board for our contribution to recreational boating safety. In 2000, we introduced the Sea-Doo Learning Key, which limits the top speed to approximately 35 mph for less experienced riders. The Sea-Doo Off-Power Assisted Steering System was introduced in 2001 to provide added maneuverability by assisting the steering of the watercraft in off-throttle and off-power situations.

Our 2004 Sea-Doo models carry suggested retail prices ranging from U.S.$5,999 - U.S.$11,999. We also generate revenue from the sale of parts, accessories and clothing related to our personal watercraft products.

All-Terrain Vehicles. In 2001, we launched six new models in the sport utility, grand sport and youth segments. We have continued to broaden our product line by launching two new ATV platforms in 2002 in key ATV segments: the midsize recreational utility segment, with the Outlander, and the entry-level segment with the Rally. In 2002, we also launched the first-ever two-passenger ATV, the Traxter MAX, to better respond to a strong trend in the family ATV market. In 2003, we launched two new models: the Outlander MAX and the Quest MAX. We are the only OEM with a full line-up of two passenger ATVs. The response from the specialized press, dealers and customers has been extremely positive. Our ATVs have been recognized with the following honors and awards:

• Outlander MAX—Innovation of the Year (ATV Guide—2004);

• Outlander MAX—Ingenuity Award (ATV Magazine Television—2004);

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• Traxter MAX—ATV of the Year (ATV Connection—2003);

• Outlander 400—ATV of the Year (ATV Magazine—2003);

• Outlander 400—ATV of the Year (Canadian ATV Guide—2003);

• Quest 650 4-TEC—ATV of the Year, All Categories (Canadian ATV Guide—2002);

• DS650 Baja—Sport/Performance ATV of the Year (Canadian ATV Guide—2002); and

• Traxter—ATV of the Year (ATV Magazine—1999).

With the launch of the Outlander and the Outlander MAX, our ATV line-up now covers the market segments in which 75% of all ATVs are sold in North America. We believe our ATVs have a reputation for quality and innovation, and our products have been well received by consumers and the media.

The 2004 ATV models carry suggested retail prices ranging from U.S.$3,199 - U.S.$8,299 (excluding the youth models which retail between U.S.$1,799 - U.S.$2,299). We have also entered into a strategic supply agreement with Deere & Company to manufacture John Deere-branded ATVs which are sold through Deere & Company dealers in North America. We believe this alliance will increase our volume in the utility segment of the ATV market, which is less volatile than the recreational segment of the market. Also under this alliance, Deere & Company has started manufacturing of the Bombardier Sarasota 1000, a compact side-by-side vehicle, for distribution in our dealer network in North America.

Sport Boats. We have been manufacturing sport boats since 1994. Our model year 2004 line-up is made of nine families of sport boats under the Sea-Doo brand name. Our sport boats are available in both the sport performance segment, with the Sportster and Speedster platforms, and the recreational all-purpose segment, with the Challenger, Utopia and Islandia platforms. Our sport boats have received the following industry honors and awards:

• Sea-Doo Islandia—Excellence in Industrial Design (IDM—2002);

• Sea-Doo Islandia—Gold IDEA; Industrial Design Excellence (Industrial Designers Society of America—2001);

• Sea-Doo Islandia—Innovation Award (Motor Boat & Sailing Magazine—2000); and

• Sea-Doo Challenger 1800—Preferred Runabout (Popular Mechanics—1999).

For the 2004 season, we launched a new flagship for our sport performance line-up, the Speedster 200. This twin engine 20-foot boat is powered by twin 155hp 4-TEC engines supplied by Rotax. Our sport boats carry suggested retail prices ranging from U.S.$11,599 to U.S.$30,999 for sport performance boats and U.S.$23,129 to U.S.$36,999 for recreational all-purpose boats.

Small Engines. Our small engines, each sold under the Rotax brand name, power a large variety of vehicles and equipment. Rotax engines are used in Ski-Doo and Lynx snowmobiles, Sea-Doo personal watercraft and sport boats, and our ATVs, as well as in other manufacturers’ motorcycles, scooters, karts and small and ultra-light aircraft.

• Motorcycle and Scooter Engines. We develop and produce engines for a variety of motorcycle and scooter manufacturers. Motorcycle engines represent over 81% of our external engine unit sales in fiscal year 2003/2004. We have long-standing relationships whereby we produce engines for BMW and Aprilia motorcycles and manufacture engines for scooters produced by Aprilia.

• Aircraft. We are a leading supplier of engines for light-weight and ultra-light aircraft. We are currently developing a new gasoline engine for certified aircraft that we expect to bring to market in 2005. We believe this engine innovation will attract significant interest from manufacturers and pilots alike given its superior performance (power to weight ratio and fuel efficiency), new technology and functionality.

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• Kart. We have been developing and manufacturing engines for kart racing since 1983, and in 1997 entered the recreational karting market segment. We believe that Rotax is a leader in the recreational karting industry. We have created the Rotax Max Challenge, a series of grass root regional kart races around the world that culminates in the annual Rotax Max Championships, which helps promote Rotax’s products to kart enthusiasts. We have recently introduced a new innovative kart vehicle equipped with a new 2-speed direct drive engine and unique safety features that will strengthen Rotax’s leadership in recreational karting.

Marine Engines

Our 2004 product line-up offers a full range of outboard engines available across all three current technologies in the industry: Johnson 2-stroke carbureted and 4-stroke technology, and Evinrude 2-stroke direct injection technology. Johnson branded engines are targeted at consumers desiring conventional 2-stroke and 4-stroke technology and are available in 71 models in North America ranging from 3.5 hp to 225 hp. The Evinrude brand focuses on delivering new and innovative technology to consumers. In the 2004 product line-up, Evinrude 2-stroke direct injection engines are offered in 43 models in North America ranging from 40 hp to 250 hp. Suggested retail prices range from U.S.$900 – U.S.$19,700.

In 2003, we launched our E-TEC technology, which provides a cleaner, quieter and lower maintenance engine that current industry offerings, with both reduced size and weight. E-TEC is the only outboard engine to offer three years of no dealer scheduled maintenance for recreational use. It represents the “new generation” of 2-stroke direct injection technology. Evinrude E-TEC engines are certified to meet California’s stringent “3-Star Ultra-Low Emission” standards.

Our outboard engines have received the following industry honors and awards:

• Evinrude E-TEC—Editors Choice Award (Motorboating—2003)

• Evinrude 2-Stroke Direct Injection Engines—Highest in Customer Satisfaction for 2-stroke engines (J.D. Power & Associates—2003); and

• Evinrude E-TEC—Innovation Award (National Marine Manufacturer Association Boating Writers International—2003).

Manufacturing and Supply

Our manufacturing operations are conducted through 11 manufacturing facilities worldwide. Through manufacturing initiatives such as Six Sigma, which has been rolled out to all manufacturing divisions, we seek to continuously improve processes, quality and costs of operations. Also, our Gunskirchen, Austria and Valcourt, Québec facilities have embarked on a best practices program to make their manufacturing operations leaner and more efficient. Gunskirchen is in its fourth year of roll-out and Valcourt is in its second year. The other sites have just started the program. On the procurement side, we have increased the intensity of our low cost sourcing initiative mainly targeted to Asia. Our specific manufacturing facilities and their specific businesses and supplier relationships are described below. The manufacturing of most of our parts, accessories and clothing business is outsourced.

Power Sports. Our manufacturing facility in Valcourt, Québec produces Ski-Doo snowmobiles, Sea-Doo personal watercraft, ATVs and related components. While ATV production is year-round, Valcourt maximizes its utilization by producing snowmobiles and personal watercraft in opposite seasons to take advantage of peak consumer demand periods. At Valcourt, we have identified specific core manufacturing competencies (including final assembly, aluminum forming and welding, steel forming and welding and painting) and have chosen outside vendors to provide other vehicle components. Valcourt’s most significant supplier is our Rotax unit. Most of Valcourt’s other suppliers, which principally provide tracks, hulls, plastics, seats, and transmission components

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are located near the facility. In addition, in 2001 and 2002 we entered into agreements with a Taiwanese manufacturer, whereby such manufacturer will produce entry-level and youth model ATVs and related parts for us. We expect the outsourcing of these products will continue to provide considerable costs savings for us.

Our Rovaniemi, Finland facility produces Lynx and certain models of Ski-Doo snowmobiles, and related components. This facility is focused on snowmobile final assembly, steel forming, and painting. Its most significant supplier is Rotax. To benefit from economies of scale and reduce tooling costs they purchase several common components with Valcourt suppliers. Most of Rovaniemi’s other suppliers, which principally provide tracks, plastics, seats, and suspension components are located near the facility or in continental Europe.

Our manufacturing facility in Benton, Illinois produces sport boats. The Benton facility focuses on the manufacture of fiberglass hulls and decks, as well as boat assembly. Benton’s most important suppliers are Rotax and Mercury Marine which provides marine engines for our sport performance boat models and all of our recreational all-purpose boat models. Most of Benton’s other suppliers, which principally provide trailers, plastics, raw materials for fiberglass hulls and boat accessories, are located in the continental U.S.

Our facility in Gunskirchen, Austria produces Rotax engines for our snowmobiles, personal watercraft, some sport boats and ATVs as well as engines for other OEMs of motorcycles, karts and light aircraft. Manufacturing operations are focused on engine assembly and machining of critical engine components. Most of Rotax’s suppliers, which principally provide castings, electrical and mechanical components, are located in Europe.

Marine Engines. Prior to our acquisition of assets of Outboard Marine Corporations’s outboard engines business, Johnson and Evinrude outboard engines were manufactured in 10 manufacturing facilities. We have since consolidated machining and final assembly of these engines at facilities in Sturtevant, Wisconsin, Juarez, Mexico and Guang Dong, China. Facilities in Spruce Pine, North Carolina, Andrews, North Carolina and Delavan, Wisconsin produce engine components such as lost foam castings, gears and direct injection fuel systems. Production of outboard engines runs year-round.

Most of the outboard engine suppliers are located in the United States, with a few suppliers located in Asia. We have entered into a written agreement with a Japanese manufacturer whereby they have agreed to supply 4-stroke engines, which are sold under the Johnson brand name. With respect to the manufacture of outboard engines, management believes that further cost synergies may be achieved by continued optimization of the manufacturing footprint and supplier network.

Distribution, Sales and Marketing

Distribution and Sales—Power Sports

We distribute snowmobiles, personal watercraft and ATVs worldwide through a network of approximately 1,500 power sports dealers, 2,000 marine dealers and 105 other distributors. We also distribute sport boats through both power sport dealers and marine dealers throughout North America. Our dealers enter into contractual arrangements pursuant to which the dealer is authorized to market specific product lines and is required to stock service parts and perform warranty and other services. Most of these contracts do not require a dealer to market our products exclusively. We prepare specific objectives for each dealer based on the market potential of the dealer’s territory and its target market share. Based on volume and other certification criteria, dealers become entitled to discounts, co-op advertising, inventory financing and non-current unit discounts.

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For snowmobiles and personal watercraft, dealers place an annual order at dealer meetings held in March for Ski-Doo and in September for Sea-Doo. They are offered other special edition vehicles at other times during the year. For ATVs, we take biannual formal orders from dealers and on-going orders in between formal order periods. The dealership base for Ski-Doo and Sea-Doo is stable and mostly composed of dealers with whom we have enjoyed a long-standing relationship. For ATVs, which require much broader geographical coverage, we continue to expand our coverage while also enhancing our current dealer base. To promote new dealerships and to service our existing dealer network, we employ district sales managers and regional sales managers throughout North America.

Distribution and Sales—Marine Engines

Outboard engines are distributed through two channels: boat builders and independent marine dealers. The majority of new outboard-powered boats today are sold by boat builders to dealers as a package (boat plus outboard engine). We have entered into non-exclusive supply agreements with many independent boat builders. We agree with boat builders on a non-binding target order volume for a model year, which allows us to plan production and the boat builder to plan for a certain level of discount. We also maintain established relationships with more than 1,300 independent outboard dealers to distribute our full line of Johnson and Evinrude products, including parts and accessories. These dealers order products directly from the factory. We also have relationships with over 680 package dealers who order boats with our outboard engines but do not order outboard engines directly from us.

Marketing

Our marketing efforts are focused on two target customers: dealers/distributors and consumers. To attract dealers and distributors and provide incentives for retailing our products, we hold several dealer meetings, arrange for inventory financing, make available point-of-purchase material (including brochures, posters and stands), and offer targeted discounts and rebate programs and other incentives. In addition, we make dollars available for local mass media promotion, where we match a dealer’s advertising dollars up to a certain level.

We reach consumers directly by promoting our products using print advertising in industry press, user groups, websites and newspapers, and, less extensively, advertising on radio and television. We also participate in a number of sponsorship activities. We sponsor the Ski-Doo X-Team, a professional snowmobile racing team, as well as other independent racers. We also sponsor Team Evinrude, a team comprised of 20 professional fishermen who compete on professional circuits, as well as Fox TV Sport Network’s “Simply Fishing” series and other teams and pursuits relevant to our product lines.

Competition

Our businesses, including the snowmobile, ATV, personal watercraft, outboard engine, sport boat and utility vehicle businesses, are highly competitive. We compete domestically and internationally with individual producers as well as with vertically integrated manufacturers, some of which have resources greater than we do. Competition in such markets is based upon a number of factors, including brand loyalty, price, quality, reliability, styling, product innovations and features, and warranties. At the dealer level, competition is based on a number of factors including sales and marketing support programs (such as financing and cooperative advertising). In addition, our products compete with many other recreational products for the discretionary spending of consumers, and, to a lesser extent, with other vehicles designed for utility applications.

Power Sports. Our power sports businesses are typically mature markets with a few large international competitors with access to significant financial resources. Our principal competitors in snowmobiles are Arctic Cat, Polaris and Yamaha; in personal watercraft are Kawasaki, Polaris Yamaha, and, most recently, Honda; in ATVs are Arctic Cat, Honda, John Deere, Kawasaki, Polaris, Suzuki and Yamaha; and in sport boats are Polaris, Sugar Sands and Yamaha.

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Not all of these competitors compete in each of the markets that we do, however, we believe that each has the resources to do so. For instance, although many of our competitors have not, until recently, focused on snowmobile sales in Europe, many are now increasing their inventories and opening new subsidiaries in that region. We believe that significant barriers to entry currently exist in these businesses due to brand loyalty, long-standing dealer and distribution networks, limited engine sources, manufacturing and engineering expertise and high initial startup costs. In some cases, competitors offer similar products, with a smaller number of platforms than we do, but in other markets, like ATVs, our competitors have a broader product offering than we do.

Marine Engines. The marine engine market is extremely competitive, with several major international companies comprising the majority of the market. During Outboard Marine Corporation’s bankruptcy proceedings, many of its customers moved their business largely to Yamaha and Mercury. Since acquiring assets of Outboard Marine Corporation’s outboard engine business, we have been working to regain that company’s historical market share. Key to regaining market share has been regaining credibility with dealers and boat manufacturers by providing better service, expanding our product line and introducing new technologies.

Intellectual Property

We rely on a combination of patent, design, copyright, trade secret, and trademark laws to protect certain aspects of our business.

Over the past several years, we have worked aggressively to expand the proprietary position afforded by our patent portfolio, both through acquisitions and original patent filings. As of May 31, 2004, we owned or had rights to use more than 750 issued or pending U.S. patents and patent applications directed to engine technologies and other important product features and product designs. We also have related patents and patent applications in Canada, Europe, Japan and other jurisdictions. We plan to continue investing in this area as we improve existing technologies and develop new ones.

In addition to protecting our technological innovations, we rely on a combination of registered and unregistered trademark rights to protect our position as a branded company with strong name recognition. We use the registered trademarks Ski-Doo^®, Sea-Doo^®, Johnson^®, Evinrude^®, Lynx^® and Rotax^® in association with their respective product lines and related accessories. We have also historically used the Bombardier^®™ trademark. We have entered into a license agreement with Bombardier which, among other things, enables us to continue to use certain marks owned by Bombardier (including the Bombardier^®™ mark) which were not otherwise assigned to us in connection with the Transactions in association with our products and at our products’ dealerships. See “Certain Related Party Transactions—Arrangements with Bombardier.”

Monitoring the unauthorized use of our intellectual property is difficult, and the steps we have taken may not prevent unauthorized use by others. The failure to adequately build, maintain and enforce our intellectual property portfolio could impair the strength of our technology and our brands, and harm our competitive position.

Employees

As of January 31, 2004, we had approximately 7,500 employees. We believe we have a good working relationship with our employees, which has resulted in high productivity and low turnover in key production positions. Facilities in North America are non-unionized but we have established an employee relations committee at most of these facilities. Certain of our Canadian hourly employees are parties to a stability agreement which provides that employees classified as “permanent employees” as of December 2, 2002, may not be laid off except under specified circumstances. Additionally, these employees are entitled to receive a portion of their salary upon assembly line shutdown due to supply shortages. Our facilities in Austria, Finland, Sweden and Norway are unionized.

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Properties

We lease our executive offices located in Saint-Bruno, Québec, Canada which comprises approximately 70,000 square feet. We own nine separate manufacturing facilities worldwide and we lease manufacturing facilities in Delavan, Wisconsin and Guang Dong, China. We also own or lease approximately 30 other sales, distribution, test and engineering facilities worldwide.

Each of our manufacturing facilities is set forth in the table below:

Manufacturing facilities	Approx. Size (sq. ft.)	Status	Products
Power Sports Facilities
Valcourt, Québec, Canada	935,600	Owned	Snowmobiles (Ski-Doo), personal watercraft, and ATVs
Gunskirchen, Austria	570,000	Owned	Rotax engines and engine components
Benton, Illinois, U.S.	380,000	Owned	Sport boats
Rovaniemi, Finland	60,000	Owned	Snowmobiles (Lynx)
Marine Engines Facilities
Sturtevant, Wisconsin, U.S.	450,000	Owned	Outboard engines, machining and assembling
Spruce Pine, North Carolina, U.S.	260,800	Owned	Lost foam casting of components for outboard engines
Juarez, Mexico	199,100	Owned	Small outboard engines, components, parts and accessories
Andrews, North Carolina, U.S.	148,800	Owned	Machining of gears and components
Dongguan City, Guangdong, China	119,300	Leased	Electronic components and small outboard engines
Delavan, Wisconsin, U.S.	40,000	Leased	Electronic, fuel injection and oiler components

Regulation

Our operations are subject to extensive federal, state, provincial, territorial, local and international environmental and safety laws and regulations relating to, among other things, the generation, storage, handling, emission, transportation, disposal and discharge of hazardous and non-hazardous substances and materials into the environment and employee health and safety. Permits are required for certain of our operations, which are subject to revocation, modification and renewal by issuing authorities. Governmental authorities have the power to enforce compliance with their laws and regulations, and violations may result in enforcement actions such as convictions, the payment of fines or the issuing of injunctions, or some combination of the foregoing. As the requirements of such laws and enforcement policies have generally become stricter in recent years, we are unable to predict the ultimate cost of compliance with environmental and health and safety laws and enforcement policies. We endeavor to ensure that our facilities comply with applicable environmental laws and regulations.

Laws and regulations relating mostly to engine gaseous emissions, sound levels, safety and construction standards or motorized recreational products are in place or will gradually be implemented in jurisdictions where our products are manufactured and sold. We believe our products comply with all existing legislative and regulatory requirements in the jurisdiction where they are manufactured or sold. Moreover, we are taking appropriate measures to ensure that our products will be compliant with anticipated more stringent regulations as they become effective from time to time.

Legal Proceedings

We are engaged in a business which exposes us to potential claims from the use of our products, many of which are motorized vehicles that may be operated at high speeds and in a careless or reckless manner. We have approximately 146 pending legal proceedings, 70% of which are in the United States. We vigorously defend all

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litigation to which we become subject, but there can be no assurance that we will be successful or that, if not successful, that our insurance will be sufficient to cover any resulting liability.

Approximately half of all pending litigation consists of product liability cases. The most common product liability lawsuits we face involve (i) allegations that our personal watercraft are defectively designed or lack adequate warnings, because they require power to steer, and operators sometimes let go of the throttle when attempting to avoid a collision (this is commonly referred to as the off-throttle steering issue), (ii) alleged fuel tank explosions for certain of our personal watercraft and (iii) crashes of ultralight airplanes which use Rotax engines. We have undertaken product recalls with respect to fuel tanks installed in certain of our personal watercraft products. To date, approximately 48 lawsuits have been filed alleging injuries resulting from a fuel tank explosion. Additional claims may be filed, and we cannot predict the amounts we will have to pay to defend, settle or, if we are unsuccessful, pay in respect of these claims. With respect to product liability claims that relate to events that occurred prior to the consummation of the Transactions, Bombardier has agreed under the purchase agreement to indemnify us for certain amounts. We have insurance with respect to any future claims in amounts determined by us to be appropriate, however, claims may arise in the future in excess of our indemnities and insurance coverage.

We are also subject to patent infringement claims or other claims involving our intellectual property. We currently have two U.S. patent infringement lawsuits outstanding against us. In 2001, Simmons, Inc. filed a complaint alleging that our snowmobile skis infringe a patent held by Simmons. We obtained summary judgment in our favor but that ruling was reversed on appeal and the case is scheduled for trial in September. In addition, in 2000, Boss Control, Inc. filed a claim alleging that our safety lanyards on our snowmobiles and personal watercraft infringe a patent held by Boss Control. We obtained summary judgment in our favor in April 2004 but the plaintiff has moved for reconsideration of that ruling. While we cannot predict with certainty the final outcome of these actions, we believe that their resolution will not materially affect our business. Additionally, if we are unsuccessful with respect to either of these matters, we may be enjoined from using the technology that is the subject of a patent or be required to obtain a license agreement on less advantageous terms. If enjoined, we will need to design around the patent we are alleged to be infringing, which could take substantial time and resources.

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MANAGEMENT

Directors and Senior Management

Pursuant to a shareholders agreement among our Sponsors and our parent as part of the Transactions, affiliates of Bain Capital may designate five of our directors, Beaudier Group may designate three of our directors, Caisse de dépôt et placement du Québec may designate two of our directors, and three of our directors, independent of all shareholders, will be designated jointly by all of our Sponsors. The following table sets forth information about our directors and senior managers:

Name	Age	Position(s)
Laurent Beaudoin	66	Chairman of the Board
José Boisjoli	47	President and Chief Executive Officer
Louis Morin	47	Chief Financial Officer
Roch Lambert	41	Executive Vice President, Product Development, Sales and Marketing, North America
Alain Villemure	42	Executive Vice President, Manufacturing and Operations, North America and China
Michel Hade	46	Vice President, International Sales and Marketing
Yves Leduc	39	Vice President and General Manager, BRP-Rotax
Pierre Arsenault	40	Vice President, Strategy and Business Development
Jennifer Millson	44	Vice President, General Counsel and Secretary
Joshua Bekenstein	45	Director
Matthew Levin	38	Director
Luc Houle	47	Director
Pierre Beaudoin	42	Director
J.R. André Bombardier	61	Director
Jordan Hitch	37	Director
Mark Nunnelly	46	Director
Pierre Michaud	60	Director
Nicholas Nomicos	41	Director
Daniel J. O’Neill	52	Director
Jean Gaulin	62	Director
Carlos Mazzorin	63	Director

Set forth below is a brief description of the business experience of each of our directors and executive officers:

Laurent Beaudoin became our Chairman upon consummation of the Transactions. He is the Executive Chairman of the board of directors of Bombardier Inc., a position he assumed in 2003. From 1979 to 1999, Mr. Beaudoin served as Bombardier’s Chief Executive Officer and Chairman, and from 1993 to 2003, he was Chairman of Bombardier’s board and executive committee. Mr. Beaudoin also serves on the board of directors of the Championnat des Amériques 2003. He is a Fellow Chartered Accountant. Mr. Beaudoin holds a Bachelor of Arts degree from Sainte-Anne College and a Master of Commerce degree from the University of Sherbrooke. He has also received honorary doctorates from eight universities, and a number of business awards, including CEO of the Year (Financial Post), Canada’s Executive of the Year (International Chamber of Commerce) and membership status in the World Trade Hall of Fame (World Trade Institute).

José Boisjoli became our President and Chief Executive Officer upon consummation of the Transactions. He was previously President of Bombardier’s snowmobile, personal watercraft and ATV businesses, a position he had held since May 2001. From October 1998 to May 2001, he was President of Bombardier’s snowmobile and personal watercraft divisions. Mr. Boisjoli joined Bombardier in February 1989 where he started as Director of Purchasing and later held the positions of Vice President, Material and Vice President and General Manager for all of our North American operations. Mr. Boisjoli holds a Bachelor of Mechanical Engineering from the University of Sherbrooke.

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Louis Morin became our Chief Financial Officer upon consummation of the Transactions. From June 2003 to then, he served as a financial consultant for Beaudier. Prior to that, Mr. Morin was Chief Financial Officer of Bombardier, where he worked since 1982. Mr. Morin holds a Master and Bachelor in Business Administration from the University of Montréal and is a Chartered Accountant. Mr. Morin served on the Accounting Standards Board of the Canadian Institute of Chartered Accountants for three years.

Roch Lambert became the Executive Vice President, Product Development, Sales and Marketing, North America, on January 1, 2004. He had been the Vice President and General Manager of Marine Engines with Bombardier since February 2001. Mr. Lambert joined Bombardier in 1994 and his responsibilities with the company have included Vice President, Operations and Vice President, Production. Mr. Lambert holds a Certificate of Business Administration from Laval University and a Bachelor of Mechanical Engineering from the Polytechnic School of Montréal.

Alain Villemure became Executive Vice President, Manufacturing Operations for North America, Mexico and China on January 1, 2004. He was previously Vice President, Manufacturing Operations for Bombardier’s snowmobile, personal watercraft and ATV businesses, a position he had held since 2001. Mr. Villemure joined Bombardier in 1995 as Director of Operations for the Utility Vehicles division in Granby. He became Plant Manager two years later. He was then transferred to the snowmobile and personal watercraft division as Vice President of Engineering. He holds a bachelors degree in Electrical Engineering from L’École de Technologie Supérieure of Québec University.

Michel Hade became our Vice President, International Sales and Marketing upon consummation of the Transactions. He had held this position at Bombardier since June 2000. Previously he worked at Bausch & Lomb Canada (1982–2000) where he rose from Sales Representative to President and General Manager. Mr. Hade holds a Bachelor of Industrial Relations from the University of Montréal (1979).

Yves Leduc became our Vice President and General Manager of BRP-Rotax on March 1, 2004. Previously, he was the Vice President of Material Management and Aircraft Engines at Bombardier-Rotax (2000-2004), the Vice President Strategic Planning and Business Development for Bombardier Recreational Products (1998-2000), and a Consultant with McKinsey & Company (1994-1998). Mr. Leduc has a J.D. degree from the University of Montreal and an LLM from Columbia University. He practiced law with the firm of Stikeman Elliott in Montreal from 1988-1994.

Pierre Arsenault became Vice President, Strategy and Business Development, on March 1, 2004. He was previously Vice President, Sales and Marketing - North America, for Bombardier’s snowmobile, personal watercraft and ATV businesses, a position he had held since September 1, 2002. Mr. Arsenault joined Bombardier in May 1995 as Director strategic planning and had held various positions in marketing, business development and as General Manager of Bombardier’s Neighborhood Electric vehicle business. He earned a bachelor degree in Mechanical Engineering from McGill University and a Master in Business Administration from the Harvard Business School.

Jennifer Millson became our Vice President, General Counsel and Secretary on January 1, 2004. She joined Bombardier Inc. in August 1998 as Vice President, Legal Services of the Bombardier Services group and was appointed Vice President, Legal Services of Bombardier Recreational Products in February 1999. Previously, Ms. Millson was a Senior Legal Counsel of TRW Inc. (1990-1997) and an associate with Thompson, Hine and Flory in Cleveland, Ohio (1985-1990). Ms. Millson has a J.D. degree from Georgetown University Law Center and a Bachelor of Arts degree from Miami University.

Joshua Bekenstein is a Managing Director at Bain Capital. Prior to joining Bain Capital, Mr. Bekenstein spent several years at Bain & Company where he was involved with companies in a variety of industries. Mr. Bekenstein serves as a Director of several corporations, including Sealy, Shoppers Drug Mart, Waters Corporation, and Bright Horizons Family Solutions. Mr. Bekenstein received an M.B.A. from Harvard Business School and a B.A. from Yale University.

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Matthew Levin is a Managing Director at Bain Capital. Prior to joining Bain Capital, Mr. Levin was a consultant at Bain & Company where he consulted in the consumer products and manufacturing industries. He serves as a Director of several corporations, including KB Holdings, Inc., US Synthetic Corp., Nutraceutical International Corp. and Unisource. Mr. Levin received an M.B.A. from Harvard Business School where he was a Baker Scholar. He received a B.S. from the University of California at Berkeley.

Luc Houle is Senior Vice President, Investments, CDP Capital—Americas, a subsidiary of the Caisse de dépôt et placement du Québec, a position he has held since 1995. Mr. Houle joined the Caisse in 1985 and has held a variety of positions prior to his current appointment, including with CDP Capital—Private Equity and CDP Capital - World Markets. He sits on the advisory committees of Onex Partners LP and Blackstone. Mr. Houle has a Bachelor degree in Finance from the University of Sherbrooke.

Pierre Beaudoin is the President and Chief Operating Officer of Bombardier Aerospace, a position he has held since October 2001. He joined Bombardier in 1985 and helped organize the Marine Products division. In October 1990, he was named vice-president of Product Development for Sea-Doo/Ski-Doo. From June 1992 to January 1994, Mr. Beaudoin served as executive vice-president of the Sea-Doo/Ski-Doo division, and from January 1994 to April 1996, he assumed the role of its president, until he was appointed the President and Chief Operating Officer of Bombardier Recreational Products from 1996 until February 2001. He was President of Bombardier Business Aircraft from February 2001 to October 2001. Mr. Beaudoin studied Industrial Relations at McGill University in Montreal. He is the son of Chairman Laurent Beaudoin and the nephew of director J.R. André Bombardier.

J.R. André Bombardier is the Vice Chairman of Bombardier Inc., a position he has held since 1978. Mr. Bombardier joined Bombardier in 1969 as Vice President, Industrial Division, and then successively held the positions of Vice President, Research and Development, Ski-Doo Division; Assistant to the President in charge of new products, Vice President of marketing, Marine Products Division, and President of the Roski Ltd. Subsidiary, before taking the position he now holds. Mr. Bombardier has a Bachelor of Arts from the Séminaire de Sherbrooke as well as a Bachelor of Business from the University of Sherbrooke. He is also a graduate of the Harvard International Senior Managers Program. He is the brother-in-law of Chairman Laurent Beaudoin and the uncle of director Pierre Beaudoin.

Jordan Hitch is a Principal at Bain Capital. Prior to joining Bain Capital, Mr. Hitch was a consultant at Bain & Company where he worked in the financial services, healthcare and utility industries. Previously, Mr. Hitch worked for Nalco Chemical Co. as an Area Manager. Mr. Hitch received a M.B.A., with distinction, from the University of Chicago Graduate School of Business. He received a B.S. in Mechanical Engineering from Lehigh University.

Mark Nunnelly is a Managing Director at Bain Capital. Prior to joining Bain Capital, Mr. Nunnelley was a Partner of Bain & Company, where he managed client relationships in a number of areas, including manufacturing, consumer goods and information services. Mr. Nunnelley serves on the Board of Directors of Houghton Mifflin Company, Warner Music, and DoubleClick, Inc as well as a number of private companies and non-profit corporations. Mr. Nunnelley received an M.B.A., with Distinction, from Harvard Business School and received an A.B. from Centre College.

Pierre Michaud has been Chairman of the Board of Provigo Inc. since June, 1993. He held several positions, including President and Chairman of the Board, with Réno-Dépôt from 1969 until 2003, when he oversaw its successful merger with Groupe Rona. He has been Vice Chairman of the Board of Laurentian Bank of Canada since 2003. Mr. Michaud sits on the Board of Directors of Loblaw Companies Limited, Provigo Inc., Laurentian Trust of Canada Inc., Old Port of Montreal Corporation Inc. and Tremblant Advisory Board and is actively involved in such non-profit and charitable organizations as Fondation du CHUM, Québec Business Council and Ste-Justine Hospital Foundation.

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Nicholas Nomicos is an Executive Vice President at Bain Capital. Prior to joining Bain Capital, Mr. Nomicos held several senior corporate and division management positions at Oak Industries Inc. where he headed the WDM business unit of Lasertron, a semiconductor laser manufacturer serving the telecommunications industry. Previously, Mr. Nomicos was a manager at Bain & Company. He serves as a Director of Modus Media International. Mr. Nomicos received an M.B.A. from Harvard Business School and a B.S.E., Phi Beta Kappa and magna cum laude, from Princeton University.

Daniel J. O’Neill is President and Chief Executive Officer of Molson Inc. He joined the Molson organization in April 1999, as Executive Vice-President and Chief Operating Officer, North American Brewing. In June 2000 he was appointed President and Chief Executive Officer. Mr. O’Neill’s career encompasses over 23 years of experience in the consumer products area. A native of Ottawa, Ontario, Mr. O’Neill graduated from Carleton University with a B.A. and from Queen’s University with an MBA. Mr. O’Neill also participated in the PMD course at Harvard Business School.

Carlos Mazzorin is Chairman and Chief Executive Officer for Magna Donnelly, a wholly owned subsidiary of Magna International. Mr. Mazzorin joined Magna Donnelly in January 2003 after 30 years at Ford Motor Company. At Ford he served as group vice president of Asia Pacific Operations, South America Operations and Global Purchasing and previous to that as group vice president of Ford of Mexico operations and Global Purchasing.

Jean Gaulin is retired as Chairman, President and Chief Executive Officer of Ultramar Diamond Shamrock as of January 1, 2002. In December 1996 following the merger of Ultramar Corporation and Diamond Shamrock, Inc., Mr. Gaulin was named Vice Chairman, President and Chief Operating Officer of Ultramar Diamond Shamrock. He was promoted to Chief Executive Officer January 1, 1999. In January 2000, Mr. Gaulin assumed the role of Chairman in addition to President and Chief Executive Officer. Mr. Gaulin also serves on the Board of Directors of Crane Co.; National Bank of Canada; National Bank Financial; Groupe St-Hubert Inc; Rona, Inc.; Corporation de l’École Polytechnique; the International Council of l’École des Hautes Etudes Commerciales and Saputo, Inc. Mr. Gaulin is a 1967 graduate of the University of Montreal École Polytechnique where he received a bachelor’s degree in chemical engineering and science. He also attended St. Jean Royal Military College.

Compensation and Other Arrangements with our Directors, Senior Management and Employees

The aggregate compensation for our directors and members of our administrative, supervisory or management bodies for the combined year ended January 31, 2004, including retention bonuses paid in connection with the Transactions and severance compensation, was $11,260,301.

The members of our board of directors are not separately compensated for their services as directors, other than reimbursement for out-of-pocket expenses incurred in connection with rendering such services.

On March 31, 2004, the board of directors of our parent approved a management share subscription agreement for our directors and officers and certain of our employees. Under the management share subscription agreement, the subscribers purchased 6,595,180 Class B common shares of our parent for an amount equal to their fair value. The net proceeds of $6.6 million were then transferred by our parent to us. The terms of the management subscription agreement provide our parent with the right to repurchase all or a portion of the subscription shares, and provide the subscribers with a right to sell to our parent all or a portion of their subscription shares, in each case, under certain corporate transactions or other circumstances. The call option and put option each expire on the occurrence of an initial public offering or upon a change in control.

On March 31, 2004, the board of directors of our parent approved a new stock option plan for our directors, officers and employees and provided for the grant of up to 19,785,540 options to certain participants. The options are exercisable into Class B common shares of our parent at an exercise price equal to the fair market value of the Class B shares on the date of grant, and are exercisable for a period of up to 10 years. One-third of the options

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granted vest in equal annual installments on each of the five annual anniversary dates of December 18, 2003. The remaining two-thirds become eligible to vest in equal annual installments on each of the five annual anniversary dates of December 18, 2003, and shall only vest upon certain performance measures being achieved upon either a change in control or an initial public offering.

Benefits Plans

We maintain non-contributory defined benefit plans that provide for pensions, other post-retirement and post-employment benefit plans for most of our employees in Canada, the U.S, Austria and Belgium. We also provide a defined contribution plan for our employees in the U.S.

Following the Transactions, new plans have been setup and registered with government authorities and ownership of certain plans has been transferred to us. Transition from Bombardier is now completed. As part of the Transactions, an agreement was reached with Bombardier with respect to Canadian pension plans, the purpose of which was to transfer a proportionate share of assets to fully fund liabilities assumed by us under our new plans as of December 18, 2003 on a funding basis. Government approval is still pending. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Pension and Employee Benefits.”

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SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Our parent holds all of our outstanding capital stock, represented by one (1) common share and 50,000 Class A Redeemable Preferred Shares. Our parent’s authorized capital stock consists of Class A and B Common Shares and Class A and B Preference Shares.

Class A and Class B Common Shares. Class A Common Shares and Class B Common Shares are fully paid common equity of our parent. These shares will participate together in distributions upon liquidation after prior payment of the liquidation preference amount payable to holders of preference shares. Class A Common Shares carry voting rights. Class B Common Shares are non-voting, except as otherwise required by law. Class B Common Shares are convertible into Class A Common Shares upon certain events, including certain change in control transactions, on the third anniversary of an initial public offering or at any time thereafter in connection with a transfer to a non-affiliate, and immediately prior to any liquidation, dissolution or winding-up of our parent.

Class A Preference Shares. Class A Preference Shares are non-voting, non-participating and are not convertible into any other class of equity. Class A Preference Shares are redeemable at their original purchase price plus all accrued or declared but unpaid dividends (i) at any time at the option of our parent, (ii) upon a change of control, (iii) subject to approval by our parent’s and our financing sources, upon an initial public offering or, (iv) upon the sale by our parent or us of all or substantially all of its or our assets. Class A Preference Shares have a liquidation preference and carry a 6% cumulative dividend right which, at the option of our parent, may be paid in cash or in-kind. So long as any Class A Preference Shares are outstanding, our parent has agreed not to pay or declare dividends in respect of our Sponsors’ equity or repay or make any payments in respect of certain sponsor loans, unless concurrent with such repayment or other payment all Class A Preference Shares are redeemed, in each case unless the holders of preference shares receive concurrently, but in priority, the full redemption price to which they are then entitled (plus all accrued or declared but unpaid dividends). Upon liquidation, the holders of Class A Preference Shares will be entitled to receive an amount equal to the face amount of such shares plus any accrued or declared but unpaid dividends prior to any distributions to holders of Class A Common Shares, Class B Common Shares or Class B Preference Shares.

Class B Preference Shares. The Class B Preference Shares of our parent, currently an authorized but unissued class of preferred equity, will rank junior to the Class A Preference Shares if and when issued.

The following table provides certain information as of June 16, 2004 with respect to the beneficial ownership of the equity interests of our parent, J.A. Bombardier (J.A.B.) Inc. by (i) each holder known by us who beneficially owns 5% or more of the outstanding equity interests of our parent, (ii) each of the members of the board of directors of our parent, (iii) each of our named executive officers, and (iv) all of the members of the board of managers of our parent’s general partner and our executive officers as a group. Unless otherwise indicated in a footnote, the business address of each person is our corporate address.

	Common Shares						Preference Shares
Beneficial Owner	Class A Shares	Percentage Ownership Interest Class A Shares		Class B Shares	Percentage Ownership Interest Class B Shares		Class A Shares	Percentage Ownership Interest Class A Shares
Bain Capital Luxembourg Investments S.ar.l.(1)	152,299,950	50	%	—	—		—	—
Beaudier Inc.(2)	63,965,979	21	%	6,418,000	37.33	%	—	—
Caisse de dépôt et placement du Québec(3)	45,689,985	15	%	—	—		—	—
Jadier International Inc.(4)	14,214,662	4.67	%	1,425,000	8.29	%	—	—
Gestion J.I.C.A. Inc.(5)	14,214,662	4.67	%	1,425,000	8.29	%	—	—
Fonds Achbee Inc.(6)	14,214,662	4.67	%	1,425,000	8.29	%	—	—
Bombardier Inc.(7)	—	—		—	—		50,000	100	%
All managers and executive officers as a group	—	—		6,495,180	37.79	%	—	—
Total:	304,599,900	100	%	17,188,180	100	%	50,000	100	%

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(1) The address of such stockholder is c/o Bain Capital Partners, LLC, 111 Huntington Avenue, Boston, MA 02199.

(2) The address of such stockholder is 1000 de la Gauchetiere West, Suite 4310, Montréal, Québec H3B 4W5

(3) The address of such stockholder is 1000 Place Jean-Paul Riopelle, Montréal, Québec H2Z 2B3

(4) The address of such stockholder is c/o Beaudier Inc., 1000 de la Gauchetiere West, Suite 4310, Montréal, Québec H3B 4W5

(5) The address of such stockholder is c/o Beaudier Inc., 1000 de la Gauchetiere West, Suite 4310, Montréal, Québec H3B 4W5

(6) The address of such stockholder is c/o Beaudier Inc., 1000 de la Gauchetiere West, Suite 4310, Montréal, Québec H3B 4W5

(7) The address of such stockholder is 800 Boulevard René-Lévesque West, Montréal, Québec H3B 1Y8

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CERTAIN RELATED PARTY TRANSACTIONS

Arrangements with our Sponsors

In connection with the consummation of the Transactions, we entered into a shareholders agreement with our parent, our Sponsors and Bombardier. The shareholders agreement contains agreements among the parties with respect to us, our parent and subsidiaries that include the following provisions:

• The parties agree to fix the initial number of members of the board of directors of our parent at 13 members and elect certain enumerated persons as the initial members of the board of directors of our parent.

• Subject to their continued respective ownership of shares of our parent, our Sponsors may designate ten of the thirteen directors of our parent. Our Sponsors will also be entitled to collectively designate three independent members of the board of directors of our parent.

• All decisions with respect to us, our parent and our respective subsidiaries will require the approval of at least a majority of the board of directors of our parent. In addition, special shareholder consent will be required for certain enumerated corporate actions.

• The transfer of shares in our parent will be generally prohibited, subject to certain enumerated exceptions. In addition, any proposed transfer of shares for value will be generally subject to a right of first offer in favor of the other shareholders, pro rata in accordance with their shareholdings of Class A and Class B Common Shares. Furthermore, in the event that the right of first offer is not elected by the other shareholders, and a selling shareholder proceeds with a sale of shares of our parent to a third party, such sale shall be subject to tag-along rights in favor of the other shareholders, in an amount that is pro rata among those shareholders who elect to participate in the tag-along sale. Additionally, such a sale may be subject to drag-along rights under certain circumstances.

• The issuance and sale by our parent of any shares, options, warrants or convertible securities will be subject to preemptive rights in favor of each holder of Class A and Class B Common Shares, pro rata in accordance with their shareholdings.

Any members of management who hold shares or options of our parent will be required to become a party to this agreement. In addition, simultaneous with the closing of the Transactions, we entered into a registration rights agreement with our Sponsors and our parent. Subject to specified restrictions, after an initial public offering of the common shares of our parent, and upon written request, our Sponsors may, individually or collectively, demand the registration of registrable securities having an anticipated net aggregate offering price of at least $10,000,000. Additionally, subject to certain exempted transactions, our Sponsors will have piggyback registration rights when our parent proposes to register any of its equity securities, whether in connection with an initial public offering or otherwise. The registration rights agreement contains customary indemnification provisions.

Management Agreement

Upon completion of the Transactions, we and our parent entered into a management agreement with affiliates of our Sponsors to provide management services. Pursuant to such agreement, affiliates of our Sponsors will receive an aggregate annual management fee of U.S. $2.25 million, and reimbursement for out-of-pocket expenses incurred in connection with the Transactions prior to the closing date and in connection with the provision of services pursuant to the agreement. In addition, pursuant to such agreement, affiliates of our Sponsors also received aggregate transaction fees of approximately $24.5 million, in connection with the services provided by such entities related to the Transactions. In addition, the management agreement provides that affiliates of our Sponsors will also receive fees in connection with certain subsequent financing and acquisition transactions (excluding an initial public offering). The management agreement includes customary indemnification provisions in favor of our Sponsors and their affiliates. The term of the management agreement runs until January 31, 2014.

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Arrangements with Management

We have entered into employment agreements with some of our executive officers. See “Management—Compensation and Other Arrangements with our Directors, Senior Management and Employees.” In addition, some members of our management team have purchased Class B Common Shares. See “Security Ownership of Certain Beneficial Owners and Management.”

Arrangements with Bombardier

Prior to the consummation of the Transactions, we operated as the recreational products business of Bombardier within its operational and administrative infrastructure. Our chairman, Laurent Beaudoin, remains executive chairman and a significant equity holder of Bombardier. Mr. Beaudoin’s wife, Claire Bombardier Beaudoin, together with members of her family directly or indirectly control Bombardier. In connection with the Transactions, we entered into certain arrangements with Bombardier, including a trademark license agreement and floorplan and other financing arrangements. The trademark license agreement provides us with exclusive rights to certain trademarks currently used in our business but which Bombardier will continue to own, such as the Bombardier mark and cog-wheel design. The license is expected to be royalty-free and subject to certain conditions. The license will allow us to use “Bombardier” in our corporate name as long as the Beaudier Group maintains at least a 10% ownership interest in our parent. For a description of the floorplan and other financing arrangements, see “Description of Other Financing Arrangements.”

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DESCRIPTION OF OUR SENIOR SECURED CREDIT FACILITY

General

In connection with the Transactions, we entered into a senior secured credit facility with a syndicate of banks and other institutional lenders. Set forth below is a summary of the terms of our senior secured credit facility. In this description, all references to “our company” refer only to Bombardier Recreational Products Inc. and not to any of our subsidiaries.

As of January 31, 2004, our senior secured credit facility provides for senior secured financing, consisting of:

• A U.S.$280.0 million (approximately $371.4 million as of January 31, 2004) term loan facility with a maturity of seven years. The term loans are denominated in U.S. dollars and were drawn in full in connection with the consummation of the Transactions. Approximately U.S.$196.0 million (approximately $260.0 million as of January 31, 2004) of the term loans were borrowed by our company and approximately U.S.$84.0 million (approximately $111.4 million as of January 31, 2004) of the term loans were borrowed by one of our wholly-owned U.S. subsidiaries.

• A $250.0 million revolving loan facility with a maturity of five years. After the closing date, up to $200.0 million of the revolving loan facility denominated in U.S.$, $ or Euros will be available to our company and up to $50.0 million of the revolving loan facility denominated in U.S.$ will be available to one of our wholly-owned U.S. subsidiaries. The revolving loan facility also includes (1) a Canadian and U.S. swingline loan sub-facility and (2) a Canadian and U.S. letter of credit sub-facility.

All borrowings under our senior secured credit facility are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties.

Proceeds of the term loans, together with the other sources of funds described under “Use of Proceeds,” were used to finance the Transactions. Proceeds of revolving loans, swingline loans and letters of credit will be used to provide financing for working capital and general corporate purposes.

Interest and Fees

The interest rates per annum applicable to revolving and term loans under our senior secured credit facility are, at our option (1) in the case of U.S. dollar denominated loans, equal to either the U.S. prime rate, the U.S. base rate, or an adjusted LIBOR rate, (2) in the case of Canadian dollar denominated loans, equal to the Canadian prime rate, and (3) in the case of Euro denominated loans, equal to an adjusted EUROLIBOR rate, in each case plus an applicable margin. Canadian dollar denominated loans to our company under the revolving loan facility may also be made by means of acceptance and purchase of bankers’ acceptances.

On the last day of each calendar quarter we will be required to pay each lender a customary commitment fee in respect of any unused commitments under the revolving loan facility.

Amortization of Term Loans

Our senior secured credit facility requires scheduled amortization payments on the term loans in annual amounts equal to 1% of the original term loans, in semi-annual installments, beginning six-months after the closing for a period of six years, with the balance paid in four equal quarterly installments thereafter.

Prepayments

Subject to exceptions, our senior secured credit facility requires mandatory prepayments of the loans in amount equal to:

• 100% of the net cash proceeds from certain asset sales or other asset dispositions (including insurance proceeds) which are not reinvested by us within specified periods;

• 50% of the net cash proceeds from the issuance of equity securities;

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• 100% of the net cash proceeds from the issuance of debt securities; and

• 50% of our annual consolidated excess cash flow.

Proceeds required to prepay the loans will be applied pro rata to the remaining scheduled amortization payments of the term loans, and then to any outstanding revolving loans (and to permanently reduce the corresponding commitments).

Prior to the fifth anniversary of the closing, all mandatory prepayments (other than resulting from asset sales and casualty proceeds) and scheduled repayments of the term loans will be limited in aggregate amount to 25% of the original principal amount of the term loans (with a catch-up payment following the fifth anniversary of the closing date).\

Voluntary prepayments of loans under our senior secured credit facility and voluntary reductions of revolving loan commitments are permitted, in whole or in part, in minimum amounts as set forth in the credit agreement.

Collateral and Guarantees

Our senior secured credit facility is guaranteed by our parent and all of our existing and future subsidiaries that can provide a full and unconditional guarantee, and will be secured by a first priority security interest in substantially all of our and their existing and future assets, and a first priority pledge of our capital stock and the capital stock of those subsidiaries, as well as intercompany notes issued by certain of our non-guarantor subsidiaries, and the capital stock of our non-guarantor subsidiaries, subject to certain exceptions agreed upon with our lenders and local law requirements.

Restrictive Covenants and Other Matters

Our senior secured credit facility requires that we comply on a quarterly basis with certain financial covenants, including:

• a maximum total leverage ratio test of (i) 4.75x for February 1, 2004 through July 31, 2004, (ii) 4.50x for August 1, 2004 through October 31, 2005, (iii) 4.25x for November 1, 2005 through January 31, 2006, (iv) 4.00x for February 1, 2006 through July 31, 2006, (v) 3.75x for August 1, 2006 through January 31, 2007, (vi) 3.50x for February 1, 2007 through January 31, 2008, (vii) 3.25x for February 1, 2008 through January 31, 2009, and (viii) 3.00x for February 1, 2009 through January 31, 2011;

• a minimum interest coverage ratio test of (i) 2.25x for February 1, 2004 through January 31, 2005, (ii) 2.50x for February 1, 2005 through January 31, 2009, and (iii) 2.75x for February 1, 2009 through January 31, 2011; and

• minimum fixed charge coverage ratio test of (i) 1.00x for February 1, 2004 through January 31, 2006, (ii) 1.10x for February 1, 2006 through January 31, 2007, and (iii) 1.25x for February 1, 2007 through January 31, 2011.

In addition, our senior secured credit facility includes negative covenants, subject to certain exceptions, that restrict or limit our ability and the ability of our subsidiaries to, among other things:

• incur, assume or permit to exist additional indebtedness or contingent obligations, other than such indebtedness that is expressly permitted pursuant to the credit agreement governing the senior secured credit facility;

• incur liens with respect to any of its property of any kind, other than liens that are expressly permitted by the credit agreement governing the senior secured credit facility, which include the liens related to the assets securing our obligations under the senior secured credit facility;

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• enter into any agreements prohibiting the creation or assumption of liens on our properties or assets, except pursuant to certain expressly authorized contracts;

• enter into or engage in any business other than the business and operations carried on by us as of the effective date of the credit agreement governing the senior secured credit facility;

• engage in mergers, acquisitions and other business combinations, or liquidate, wind-up or dissolve our business;

• effect any disposition of our property or assets, including equity interests or other ownership interests of any entity;

• enter into certain sale and leaseback transactions;

• make capital expenditures in excess of (i) $114,000,000 for the fiscal year ended January 31, 2005, (ii) $129,000,000 for the fiscal year ended January 31, 2006, (iii) $122,000,000 for the fiscal year ended January 31, 2007, (iv) $124,000,000 for the fiscal year ended January 31, 2008, (v) $127,000,000 for the fiscal year ended January 31, 2009, (vi) $127,000,000 for the fiscal year ended January 31, 2010, and (vii) $127,000,000 for the fiscal year ended January 31, 2011;

• make loans and investments, other than such loans and investments that are permitted under the credit agreement governing the senior secured credit facility, such as (i) cash equivalents, (ii) accounts receivable, chattel paper created, acquired or arising in the ordinary course of business, (iii) inventory, raw materials and general intangibles acquired in the ordinary course of business, (iv) investments between subsidiaries of our parent, (v) certain investments in the form of an intercompany loan, (vi) acquisitions of other companies engaged in businesses permitted by the credit agreement, solely with the common shares of our parent as consideration and (vii) investments in hedging agreements effected in accordance with the credit agreement;

• declare dividends, make payments or redeem or repurchase capital stock;

• prepay, redeem or repurchase certain indebtedness (including the notes) or amend, supplement, waive or otherwise modify any of the provisions of any document relating to the notes in connection (i) the maturity of the notes, including the rate and the time of payment of interest, principal, premium, or any fees payable in connection with the notes, (ii) affirmative or negative covenants, events of default, redemption or repurchase provisions, or remedies, or (iii) the subordination provisions or otherwise any provision that materially adversely affects the interests of the senior creditors under the senior secured credit facility;

• enter into any transaction, including any purchase, sales, lease or exchange of property or rendering of any service, with any affiliate, other than transactions otherwise permitted by the Credit Agreement and which are in the ordinary course of our business;

• create, incur, assume, of suffer to exist any contingent obligations, other than certain expressly permitted contingent obligations, such as the guarantees under the senior secured credit facility and the notes; and

• create, incur, assume, of suffer to exist any hedging arrangements, except in the ordinary course of business for non-speculative purposes and as required under the credit agreement.

Our senior secured credit facility contains customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness and other material agreements, events of bankruptcy, U.S., Canadian or other employee benefit plans, material judgments, actual or asserted failure of any guaranty or security document supporting our senior secured credit facility to be in full force and effect and change of control. If such an event of default occurs, the lenders under our senior secured credit facility will be entitled to take various actions, including the acceleration of amounts due under our senior secured credit facility and all actions permitted to be taken by a secured creditor.

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DESCRIPTION OF THE EXCHANGE NOTES

You can find the definitions of certain terms used in this description under the caption “—Certain Definitions.” In this description, the word “Company” refers only to Bombardier Recreational Products Inc. and not to any of its subsidiaries, and references to “$” refer to Canadian dollars and all references to “U.S.$” refer to U.S. dollars.

The Company sold the old notes to Merrill Lynch & Co., UBS Investment Bank, Harris Nesbitt and RBC Capital Markets, who we collectively refer to as the initial purchasers, on December 18, 2003. The initial purchasers subsequently resold the old notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The Company issued the old notes and incurred the obligations to issue the exchange notes under an Indenture (the “Indenture”) among itself, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”). See “Transfer Restrictions.” The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

The Company is subject to the provisions of the Canada Business Corporations Act (the “CBCA”), including those provisions governing trust indentures. However, the Company has made an application for exemption from these provisions in respect of the Notes and expects that such exemption will be obtained prior to the closing of the offering. If such relief is not obtained, the Company will be required to appoint a Canadian co-trustee under the Indenture and the Indenture will be subject to the other trust indenture provisions of the CBCA. These requirements, if applicable, will not require any material changes to the terms of the Indenture or the Notes.

The following description is a summary of the material provisions of the Indenture. It does not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, will define your rights as a holder of the Notes. Copies of the Indenture are available as set forth under the caption “Additional Information.” Certain defined terms used in this description but not defined below under “—Certain Definitions” have the meanings assigned to them in the Indenture.

Brief Description of the Notes and the Subsidiary Guarantees

The Notes

The Notes:

• are general unsecured obligations of the Company;

• are subordinated in right of payment to all existing and future Senior Debt of the Company;

• are equal in right of payment to all existing and future senior subordinated Indebtedness of the Company;

• are senior in right of payment to any future junior subordinated Indebtedness of the Company; and

• are unconditionally guaranteed on a general unsecured senior subordinated basis by each Guarantor.

The Subsidiary Guarantees

The Notes are guaranteed by each Restricted Subsidiary of the Company that guarantees Indebtedness of the Company under Credit Agreement governing the Senior Credit Facilities.

The Subsidiary Guarantees of the Notes:

• are general unsecured obligations of each Guarantor;

• are subordinated in right of payment to all existing and future Guarantor Senior Debt of each Guarantor;

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• are equal in right of payment to all existing and future senior subordinated Indebtedness of each Guarantor; and

• are senior in right of payment to any future junior subordinated Indebtedness of each Guarantor.

Assuming we had completed the offering of the Notes and applied the net proceeds as described in this offering memorandum under “Use of Proceeds,” As of January 31, 2004, the Company and the Guarantors would have had total Senior Debt and Guarantor Senior Debt of approximately $371.4 million, and an additional $250.0 million would have been available for borrowings under the revolving credit portion of the Senior Credit Facilities (excluding outstanding letters of credit of approximately $54.5 million). As indicated above and as discussed in detail below under the caption “Subordination,” payments on the Notes and under the Subsidiary Guarantees will be subordinated to the prior payment in full in cash or Cash Equivalents (other than (x) cash equivalents of the type referred to in clauses (5) and (6) of the definition thereof and (y) foreign currencies) of all Senior Debt and Guarantor Senior Debt. The Indenture will permit us and the Guarantors to incur additional Senior Debt and Guarantor Senior Debt.

As of the date of the Indenture, all of our subsidiaries were “Restricted Subsidiaries.” However, under the circumstances described under the caption “Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” we will be permitted to designate certain of our subsidiaries as “Unrestricted Subsidiaries.” Unrestricted Subsidiaries will not be subject to the restrictive covenants in the Indenture. Unrestricted Subsidiaries will not guarantee these Notes.

Not all of our “Restricted Subsidiaries” will guarantee the Notes; none of the Non-Guarantor Restricted Subsidiaries will be a Guarantor. The Notes will be effectively subordinated in right of payment to all Indebtedness and other liabilities and commitments (including trade payables, lease obligations and intercompany indebtedness pledged to the lenders under the Senior Credit Facilities) of the Company’s Non-Guarantor Restricted Subsidiaries. In the event of a bankruptcy, liquidation or reorganization of any Non-Guarantor Restricted Subsidiary, such Subsidiary will pay the holders of its Indebtedness and its trade creditors before it will be able to distribute any of its assets to us. As of January 31, 2004, the Non-Guarantor Restricted Subsidiaries had approximately $1.3 million of debt outstanding to which the notes would have been structurally subordinated.

Principal, Maturity and Interest

The Indenture provides that the Company may issue Notes with an unlimited principal amount, subject to compliance with the covenant described under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” of which U.S.$200.0 million will be issued in this offering. Any additional Notes that we issue in the future will be identical in all respects to the Notes that we are issuing now, except that any Notes issued in the future will have different issuance prices and issuance dates. The Notes and any additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The Company will issue Notes in denominations of U.S.$1,000 and integral multiples of U.S.$1,000. The Notes will mature on December 15, 2013.

Interest on the Notes accrues at the rate of 8 ³/8% per annum and will be payable semi-annually in arrears on June 15 and December 15, commencing on December 15, 2004. Interest on the exchange notes will accrue from June 15, 2004, the last interest payment date for the old notes.

The Company will make each interest payment to the Holders of record of the Notes on the immediately preceding June 1 and December 1.

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Interest on the Notes accrues from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. Solely for the purpose of providing the disclosure required by the Interest Act (Canada), the annual rate of interest that is equivalent to the rate payable on the Notes shall be the rate payable multiplied by the actual number of days in the year divided by 360.

Methods of Receiving Payments

If a Holder has given wire transfer instructions to the Company at least ten days prior to the applicable payment date, the Company will make all principal, premium, if any, and interest and additional interest, if any, payments on those Notes in accordance with those instructions. Otherwise, all payments on the Notes will be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the Company elects to make interest payments by check mailed to the Holders at their address set forth in the register of Holders.

Paying Agent and Registrar

The Trustee is initially the Paying Agent and Registrar with respect to the Notes. The Company may change the Paying Agent or Registrar without prior notice to the Holders of the Notes, and the Company or any of its Subsidiaries may act as Paying Agent or Registrar.

Transfer and Exchange

A Holder may transfer or exchange Notes only in accordance with the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company will not be required to transfer or exchange any Note selected for redemption. Also, the Company will not be required to transfer or exchange any Note for a period of 15 days before the mailing of a notice of redemption.

The registered Holder of a Note will be treated as the owner of it for all purposes under the Indenture except as required by law. Only registered Holders will have rights under the Indenture.

Subsidiary Guarantees

The Guarantors jointly and severally guarantee the Company’s obligations under the Notes on a senior subordinated basis. Each Subsidiary Guarantee is subordinated to the prior payment in full in cash or Cash Equivalents (other than (x) cash equivalents of the type referred to in clauses (5) and (6) of the definition thereof and (y) foreign currencies) of all Guarantor Senior Debt of that Guarantor. The subordination provisions applicable to the Subsidiary Guarantees are substantially similar to the subordination provisions applicable to the Notes as set forth under “Subordination.”

The obligations of each Guarantor under its Subsidiary Guarantee are limited as necessary to seek to prevent that Subsidiary Guarantee from constituting (after giving effect to all Guarantor Senior Debt of the applicable Guarantor) a fraudulent conveyance or fraudulent transfer, or a violation of applicable financial tests under applicable federal, state, foreign, provincial or territorial law. See “Risk Factors—Applicable statutes allow courts, under specific circumstances, to void the subsidiary guarantees of the notes.”

A Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the Company or another Guarantor, unless:

(1) immediately after giving effect to that transaction, no Default or Event of Default exists; and

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(2) either:

(a) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under the Indenture and its Subsidiary Guarantee pursuant to a supplemental indenture satisfactory to the Trustee; or

(b) such sale or other disposition complies with clauses (1), (2) and (3) of the first paragraph under “Purchase at the Option of Holders—Asset Sales.”

The Subsidiary Guarantee of a Guarantor will be released:

(1) in connection with any sale or other disposition of all or substantially all of the assets of such Guarantor (including by way of merger or consolidation), if the disposition is to the Company or another Guarantor or if such sale or other disposition complies with clauses (1), (2) and (3) of the first paragraph under “Purchase at the Option of Holders—Asset Sales”;

(2) in connection with any sale of all of the capital stock of such a Guarantor, if such sale complies with clauses (1), (2) and (3) of the first paragraph under “Purchase at the Option of Holders—Asset Sales”;

(3) if the Company designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary; or

(4) upon the release or discharge of all guarantees of such Guarantor, and all pledges of property or assets of such Guarantor, securing Senior Debt of the Company and Guarantor Senior Debt of the other Guarantors.

Subordination

The payment of principal, premium, if any, interest, additional interest, if any, and any other Obligations on, or relating to, the Notes is subordinated to the prior payment in full in cash or Cash Equivalents (other than (x) Cash Equivalents of the type referred to in clauses (5) and (6) of the definition thereof and (y) foreign currencies) of all Senior Debt of the Company.

The holders of Senior Debt will be entitled to receive payment in full in cash or Cash Equivalents (other than (x) Cash Equivalents of the type referred to in clauses (5) and (6) of the definition thereof and (y) foreign currencies) of all Obligations due in respect of Senior Debt (including interest after the commencement of any bankruptcy or other like proceeding at the rate specified in the applicable Senior Debt, whether or not such interest is an allowable claim) before the Holders of Notes will be entitled to receive any payment or distribution of any kind or character with respect to any Obligations on, or relating to, the Notes (except that Holders of Notes may receive and retain Permitted Junior Securities and payments made from the trust described under “Legal Defeasance and Covenant Defeasance” so long as the deposit of amounts therein satisfied the relevant conditions specified in the Indenture at the time of such deposit), in the event of any distribution to creditors of the Company:

(1) in a liquidation or dissolution of the Company;

(2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property;

(3) in an assignment for the benefit of creditors; or

(4) in any marshalling of the Company’s assets and liabilities.

The Company also may not make any payment or distribution of any kind or character with respect to any Obligations on, or with respect to, the Notes or acquire any of the Notes for cash or property or otherwise (except in Permitted Junior Securities or from the trust described under “Legal Defeasance and Covenant Defeasance”) if:

(1) a payment default on any Designated Senior Debt occurs and is continuing beyond any applicable grace period; or

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(2) any other default occurs and is continuing on Designated Senior Debt that permits holders of such Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of such default (a “Payment Blockage Notice”) from the Representative of any Designated Senior Debt.

Payments on the Notes may and shall be resumed:

(1) in the case of a payment default, upon the date on which such default is cured or waived; and

(2) in case of a nonpayment default, the earliest of (x) the date on which all nonpayment defaults are cured or waived (so long as no other event of default exists), (y) 179 days after the date the applicable Payment Blockage Notice is received or (z) the date that the Trustee receives notice from the Representative for such Designated Senior Debt rescinding the Payment Blockage Notice, unless the maturity of any Designated Senior Debt has been accelerated.

No new Payment Blockage Notice may be delivered unless and until 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice.

No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any action after the date of delivery of such initial Payment Blockage Notice, or any breach of any financial covenants for a period commencing after the date of delivery of such initial Payment Blockage Notice, that, in either case, would give rise to a default pursuant to any provisions under which a default previously existed or was continuing shall constitute a new default for this purpose).

The Company must promptly notify holders of Senior Debt or their Representative if payment of the Notes is accelerated because of an Event of Default; provided that any failure to give such notice shall have no effect whatsoever on the subordination provisions described herein.

As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of the Company, Holders of the Notes may recover less ratably than creditors of the Company who are holders of Senior Debt. Payments under the Subsidiary Guarantee of each Guarantor shall be subordinated to the prior payment in full of all Guarantor Senior Debt of such Guarantor, including all Guarantor Senior Debt of such Guarantor incurred after the Issue Date, on the same basis as provided above with respect to subordination of payments on the Notes by the Company to the prior payment in full of Senior Debt of the Company. See “Risk Factors—Your right to receive payments on the Notes will be junior to our existing senior debt and the existing senior debt of our subsidiary guarantors and all of our and their future senior debt.”

Additional Amounts

All payments made by the Company under or with respect to the Notes or by any Guarantor under or with respect to its Subsidiary Guarantee will be made free and clear of and without withholding or deduction for or on account of any Taxes, unless the Company or such Guarantor is required to withhold or deduct Taxes by law or by the interpretation or administration of the law by the relevant Taxing Authority. If the Company or any Guarantor is required to withhold or deduct any amount for, or on account of, Taxes from any payment made under or with respect to the Notes or the Subsidiary Guarantees, the Company or such Guarantor will pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by each Holder of Notes, including Additional Amounts, after such withholding or deduction (including any withholding or deduction in respect of Additional Amounts) will not be less than the amount the Holder would have received if such Taxes had not been withheld or deducted; provided that no Additional Amounts will be payable with respect to a payment made to a Holder of Notes (to the extent any of the following exceptions apply, an “Excluded Holder”):

(1) with whom the Company or such Guarantor does not deal at arm’s length, within the meaning of the Income Tax Act (Canada), at the time of making such payment;

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(2) who is subject to the Taxes in question by reason of it being connected at any time with the jurisdiction imposing such Taxes otherwise than by the mere acquisition or holding of the Notes or the receipt of payments thereunder or the enforcement of its rights thereunder;

(3) who presents any Note for payment of principal more than 60 days after the later of (x) the date on which payment first became due and (y) the date on which the full amount payable has been received by the Trustee and notice to that effect has been given to the Holders of Notes by the Trustee, except to the extent that such Holder of Notes would have been entitled to such Additional Amounts on presenting such Note for payment on the last day of the applicable 60-day period;

(4) that is subject to such Taxes by reason of its failure to comply with any certification, identification, information, documentation or other reporting requirement if compliance is required by law, regulation, administrative practice or any applicable treaty as a precondition to exemption from, or a reduction in the rate of deduction or withholding of, such Taxes, but only to the extent such Holder was legally able to comply with such requirement(s);

(5) that is a fiduciary, a partnership or not the beneficial owner of any payment on a Note, if and to the extent that, as a result of an applicable tax treaty, no Additional Amounts would have been payable had the beneficiary, partner or beneficial owner owned the Notes directly (but only if there is no material cost or expense associated with transferring such Notes to such beneficiary, partner or beneficial owner and no restriction on such transfer that is outside the control of such beneficiary, partner or beneficial owner); or

(6) any combination of the foregoing numbered clauses in this proviso.

The Company and any Guarantors will also:

(1) make such withholding or deduction in accordance with applicable law;

(2) remit the full amount deducted or withheld to the relevant Taxing Authority in accordance with applicable law; and

(3) furnish to the Trustee, or cause to be furnished to the Trustee, within 30 days after the date of the payment of any Taxes due under applicable law, certified copies of Tax receipts or other evidence of such payment by the Company or such Guarantor.

The Company and any Guarantors will, upon written request of any Holder of Notes (other than an Excluded Holder), reimburse each such Holder, for the amount of:

(1) any such Taxes so required to be withheld or deducted which are levied or imposed on and paid by such Holder as a result of payments made under or with respect to the Notes or the Subsidiary Guarantees; and

(2) any such Taxes so levied or imposed with respect to any reimbursement under the foregoing clause (1)

so that the net amount received by such Holder after such reimbursement will not be less than the net amount the Holder would have received if the Taxes described in clauses (1) and (2) had not been imposed.

Unless the Company elects to redeem the Notes as set forth below under “—Tax Redemption,” at least 30 days prior to each date on which any payment under or with respect to the Notes is due and payable, if the Company or any Guarantor will be obligated to pay Additional Amounts with respect to such payment, the Company or such Guarantor will deliver to the Trustee an officers’ certificate stating the fact that such Additional Amounts will be payable and specifying the amounts so payable and will set forth such other information necessary to enable the Trustee to pay such Additional Amounts to Holders of Notes on the payment date. Whenever in the Indenture or in this “Description of the Notes” there is mentioned, in any context, principal, premium, if any, interest or any other amount payable under or with respect to any Note, such mention will be considered to include the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

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The Company or a Guarantor will pay any present or future stamp, court, documentary or other similar Taxes, charges or levies that arise in any Taxing Jurisdiction from the execution, delivery or registration of, or enforcement of rights under, the Notes, the Indenture governing the Notes, any Guarantee or any related document (“Documentary Taxes”).

The obligation to pay Additional Amounts (and any associated reimbursement) and Documentary Taxes under the terms and conditions described above will survive any termination, defeasance or discharge of the Indenture.

For a discussion of the exemption from Canadian withholding taxes applicable to payments under or with respect to the Notes, see “Certain Tax Considerations—Canadian Federal Income Tax Considerations.”

Tax Redemption

The Company may, at its option, redeem the Notes, in whole but not in part at any time upon not less than 30 nor more than 60 calendar days’ prior written notice, mailed by first class mail to each Holder of Notes at its last address appearing in the register maintained by the registrar of the Notes, at 100% of the principal amount, plus accrued and unpaid interest to the redemption date, if the Company or any Guarantor is or would become obligated to pay, on the next date on which any amount would be payable with respect to the Notes or the Subsidiary Guarantees, any Additional Amounts in accordance with the provisions set forth under the caption “Additional Amounts” as a result of a change in, or amendment to, the laws or regulations (or rules promulgated thereunder) of any Taxing Jurisdiction, or any change in, or amendment to, any administrative or other official position regarding the application or interpretation of such laws, regulations or rules (including, without limitation, a ruling by a court of competent jurisdiction), which change or amendment is announced on or after the Issue Date; provided that the Company or such Guarantor determines, in its business judgment, that the obligation to pay such Additional Amounts cannot be avoided by the use of reasonable measures available to the Company or such Guarantor, not including substitution of the obligor under the Notes; and further provided that (i) no such notice of redemption may be given earlier than 90 days prior to the earliest date on which the Company or such Guarantor would but for such redemption be obligated to pay such Additional Amounts or later than 365 days after the Company or such Guarantor first becomes liable to pay any Additional Amounts as a result of any changes in or amendments to laws, regulations or official positions described above and (ii) at the time such notice is given, the Company’s or such Guarantor’s obligation to pay such Additional Amounts remains in effect.

Prior to the publication of any notice of redemption pursuant to this provision, the Company will deliver to the trustee (a) an officers’ certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred and (b) an opinion of legal counsel qualified under the laws of the relevant jurisdiction to the effect that the Company or such Guarantor has or will become obligated to pay such Additional Amounts as a result of such amendment or change as described above.

Optional Redemption

Except as set forth below or under “—Tax Redemption,” the Notes will not be redeemable at our option prior to December 15, 2008. Before December 15, 2006, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price of 108.375% of the principal amount thereof, plus accrued and unpaid interest and additional interest thereon, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings; provided that:

(1) at least 65% of the aggregate principal amount of Notes issued remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and

(2) the redemption must occur within 120 days of the date of the closing of the Equity Offering.

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Before December 15, 2008, the Company may also redeem these Notes, as a whole but not in part, upon the occurrence of a Change of Control, upon not less than 30 nor more than 60 days’ prior notice (but in no event may any such redemption occur more than 90 days after the occurrence of such Change of Control), at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium as of, and accrued and unpaid interest and additional interest thereon, if any, to, the date of redemption (the “Redemption Date”).

On or after December 15, 2008, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days’ prior notice at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and additional interest thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on December 15 of the years indicated below:

Year	Percentage
2008	104.188	%
2009	102.792	%
2010	101.396	%
2011 and thereafter	100.000	%

Mandatory Redemption

The Company will not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

Purchase at the Option of Holders

Change of Control

If a Change of Control occurs, unless the Company gives notice of redemption under the second paragraph under “—Optional Redemption,” the Company shall be obligated to make an offer (the “Change of Control Offer”) to purchase each Holder’s outstanding Notes. In the Change of Control Offer, the Company will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of Notes purchased plus accrued and unpaid interest and additional interest thereon, if any, to the date of purchase (the “Change of Control Payment”). Within 30 days following any Change of Control, the Company will mail a notice to each Holder and the Trustee describing the transaction or transactions that constitute the Change of Control and offering to purchase Notes on the purchase date specified in such notice (which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as required by law) (the “Change of Control Payment Date”), pursuant to the procedures required by the Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of the Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such conflict. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The Indenture provides that, prior to the mailing of the notice referred to above, but in any event within 30 days following any Change of Control, the Company shall:

(1) repay in full all Obligations, and terminate all commitments, under the Senior Credit Facilities and all other Senior Debt the terms of which require repayment upon a Change of Control or offer to repay in full all Obligations, and terminate all commitments, under the Senior Credit Facilities and all other such Senior Debt and to repay the Indebtedness owed to (and terminate the commitments of) each lender which has accepted such offer; or

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(2) obtain the requisite consents under the Senior Credit Facilities and all other such Senior Debt to permit the purchase of the Notes as provided below.

The Company is required first to comply with the covenant in the immediately preceding sentence before it is required to purchase Notes or to send the notice pursuant to the provisions described herein. The Company’s failure to comply with the covenant described in the immediately preceding paragraph (and any failure to send the notice referred to in the second preceding paragraph as a result of a prohibition described in the first sentence of this paragraph) may (with notice and lapse of time) constitute an Event of Default described in clause (3) but shall not constitute an Event of Default described in clause (2), in each case under the caption “Events of Default.”

On the Change of Control Payment Date, the Company will, to the extent lawful:

(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an officers’ certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to the unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of U.S.$1,000 or an integral multiple thereof.

The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the Company purchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

The Company’s outstanding Senior Debt currently prohibits the Company from purchasing the Notes (subject to limited exceptions), and also provides that certain change of control events with respect to the Company would constitute a default under the agreements governing the Senior Debt. Any future credit agreements or other agreements relating to Senior Debt to which the Company becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its senior lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Senior Debt. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of Notes. See “—Subordination.”

The Company is not required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes or portions thereof validly tendered and not withdrawn under such Change of Control Offer.

The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the assets of the Company and its Restricted Subsidiaries taken as

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a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the obligation of the Company to make the Change of Control Offer and the ability of a Holder of Notes to require the Company to purchase such Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Restricted Subsidiaries taken as a whole to another Person or group may be uncertain.

If a Change of Control does occur, there can be no assurance that the Company will have the financial resources at the time of such Change of Control to make any required purchases of the Notes.

Asset Sales

The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

(2) in the event of an Asset Sale involving assets having a fair market value in excess of U.S.$5.0 million, such fair market value is determined by the Company’s chief financial officer and evidenced by an officers’ certificate delivered to the Trustee; and

(3) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following shall be deemed to be cash:

(a) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability;

(b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) within 90 days following the receipt thereof;

(c) any Designated Non-Cash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received since the date of the Indenture pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (i) U.S.$20.0 million and (ii) 2.0% of Total Tangible Assets at the time of receipt of such Designated Non-Cash Consideration (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value); and

(d) any assets described in clauses (3) or (4) of the following paragraph.

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds at its option:

(1) to repay Senior Debt or Guarantor Senior Debt (and to correspondingly reduce commitments if the Senior Debt or Guarantor Senior Debt repaid is revolving credit borrowings);

(2) to acquire all or substantially all of the assets of, or all or a majority of the Voting Stock of, another Permitted Business;

(3) to make a capital expenditure in assets that are used or useable in a Permitted Business;

(4) to acquire other assets that are used or useable in a Permitted Business; and/or

(5) any combination of the foregoing.

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Pending the final application of any such Net Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds U.S.$15.0 million, the Company will make an offer (an “Asset Sale Offer”) to all Holders of Notes, and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets, to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest and additional interest, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each purchase of Notes pursuant to an Asset Sale Offer. If the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such conflict.

Selection and Notice

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

(1) if the Notes are listed, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

(2) if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

No Notes of U.S.$1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. Notices of redemption may not be conditional.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Certain Covenants

Restricted Payments

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s Equity Interests (including, without limitation, any payment in connection with any merger,

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amalgamation or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company);

(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger, amalgamation or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company);

(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees, except a payment of interest or principal at the Stated Maturity thereof; or

(4) make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:

(1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable Four-Quarter Period, have been permitted to incur at least U.S.$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock”; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (C), (D), (F), (G), (H), (I) and (K) of the next succeeding paragraph, provided that only 50% of the Restricted Payments permitted by clause (G) of the next succeeding paragraph will be excluded to the extent taxes of the Company were not deducted in computing Consolidated Net Income), is less than the sum, without duplication, of

(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Issue Date to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus

(b) 100% of the aggregate net cash proceeds received by the Company (other than from a Restricted Subsidiary) since the Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus

(c) to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus

(d) an amount equal to the sum, for all Unrestricted Subsidiaries, of the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the assets less liabilities of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary, plus

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(e) 50% of the aggregate amount of cash dividends or distributions received from Unrestricted Subsidiaries after the Issue Date, to the extent such dividends or distributions were not included in Consolidated Net Income, plus

(f) 50% of the gain on the sale or other disposition of any Restricted Investment, to the extent not included in Consolidated Net Income.

The preceding provisions will not prohibit:

(A) the payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of the Indenture;

(B) if no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, following the consummation of an Initial Public Offering, the payment of dividends on the Company’s common stock or the payment to any direct or indirect parent corporation of the Company for the purpose of funding the payment of dividends by such direct or indirect parent corporation on its common stock, in each case in an amount of up to 6% per annum of the net cash proceeds received by the Company or contributed to the Company in an Initial Public Offering or any subsequent public offering of Qualified Capital Stock by the Company or any direct or indirect parent corporation of the Company;

(C) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of sale within 30 days (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph;

(D) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

(E) payments to any direct or indirect parent corporation of the Company for the purpose of permitting, and in an amount equal to the amount required to permit, such direct or indirect parent corporation’s redemption or repurchase of its Equity Interests or payments to permit the Company’s redemption or repurchase of its Equity Interests, in each case in connection with the repurchase provisions of employee, director, stock option or stock purchase agreements or other agreements to compensate management employees or directors; provided that all such redemptions or repurchases pursuant to this clause (E) shall not exceed U.S.$17.5 million in the aggregate since the Issue Date (which amount shall be increased (1) by the amount of any net cash proceeds received from the sale since the Issue Date of Equity Interests (other than Disqualified Stock) to members of the Company’s management team and directors that have not otherwise been applied to the payment of Restricted Payments pursuant to the terms of clause (3)(b) of the preceding paragraph and (2) by the cash proceeds of any “key-man” life insurance policies that are used to make such redemptions or repurchases); and provided, further, that the cancellation of Indebtedness owing to the Company from members of management of the Company or any of its Restricted Subsidiaries in connection with such a redemption or repurchase of Capital Stock will not be deemed to constitute a Restricted Payment under the Indenture;

(F) the making of distributions, loans or advances to any direct or indirect parent corporation of the Company in an amount not to exceed U.S.$2.5 million per annum in order to permit such direct or indirect parent corporation of the Company to pay the ordinary operating expenses of such direct or indirect parent corporation of the Company (including, without limitation, directors’ fees, indemnification obligations, professional fees and expenses);

(G) to the extent applicable, payments to any direct or indirect parent corporation of the Company in respect of (1) federal income taxes for the tax periods for which a federal consolidated return is filed by

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such direct or indirect parent corporation of the Company for a consolidated group of which such direct or indirect parent corporation of the Company is the parent and the Company and its Subsidiaries are members, in an amount not to exceed the hypothetical federal income taxes that the Company would have paid if the Company and its Restricted Subsidiaries filed a separate consolidated return with the Company as the parent, taking into account carryovers and carrybacks of tax attributes (including net operating losses) that would have been allowed if such separate consolidated return had been filed, (2) state or provincial income tax for the tax periods for which a state or provincial combined, consolidated or unitary return is filed by such direct or indirect parent corporation of the Company for a combined, consolidated or unitary group of which such direct or indirect parent corporation of the Company is the parent and the Company and its Subsidiaries are members, in an amount not to exceed the hypothetical state or provincial income taxes that the Company would have paid if the Company and its Restricted Subsidiaries had filed a separate combined, consolidated or unitary return taking into account carryovers and carrybacks of tax attributes (including net operating losses) that would have been allowed if such separate combined return had been filed and (3) capital stock, net worth, or other similar taxes (but for the avoidance of doubt, excluding any taxes based on net or gross income) payable by such direct or indirect parent corporation of the Company based on or attributable to or calculated with reference to its investment in or ownership of the Company and its Restricted Subsidiaries; provided, however, that in no event shall any such tax payment pursuant to this clause (G) exceed the amount of federal (or state or provincial, as the case may be) income tax or other relevant tax that is, at the time the Company makes such tax payments, actually due and payable by such direct or indirect parent corporation of the Company to the relevant taxing authorities or to become due and payable within 30 days of such payment by the Company; provided, further, that for purposes of this clause (G), payments made by an Unrestricted Subsidiary to a Restricted Subsidiary or the Company which are in turn distributed by such Restricted Subsidiary or the Company to any direct or indirect parent corporation of the Company shall be disregarded;

(H) if no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of the Company or any Restricted Subsidiary issued after the Issue Date; provided that, at the time of such issuance, the Company, after giving effect to such issuance on a pro forma basis, would have had a Fixed Charge Coverage Ratio of at least 2.0 to 1.0 for the most recent Four-Quarter Period;

(I) payments made by the Company or any Restricted Subsidiary in connection with the Transactions;

(J) the repurchase, redemption or other acquisition or retirement for value of subordinated Indebtedness with Excess Proceeds remaining after an Asset Sale Offer pursuant to the covenant described under the caption “Purchase at the Option of Holders—Asset Sales”;

(K) the repurchase of Capital Stock of the Company upon the surrender of such Capital Stock in satisfaction of all or a portion of the exercise price of a stock option granted under any stock option plan established by the Company for the benefit of its directors, employees or consultants; provided that no payment in cash or other property is made by the Company in connection therewith; and

(L) if no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, any other Restricted Payment which, together with all other Restricted Payments made pursuant to this clause (L), does not to exceed U.S.$25.0 million in the aggregate since the Issue Date.

The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the assets or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant shall be determined by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. The Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds U.S.$15.0 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an officers’ certificate stating that such Restricted

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Payment is permitted and setting forth the basis upon which the calculations required by this “Restricted Payments” covenant were computed, together with a copy of any fairness opinion or appraisal required by the Indenture.

Incurrence of Indebtedness and Issuance of Preferred Stock

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any Guarantor may issue preferred stock, if in each case the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and as otherwise provided in accordance with the provisions contained in the definition of “Fixed Charge Coverage Ratio”), as if the additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such Four-Quarter Period.

Notwithstanding any other provision of this covenant, in no event will any Non-Guarantor Restricted Subsidiary be permitted to incur Indebtedness under clauses (4), (14), (16) and (19) below in an aggregate principal amount (or accreted value, as applicable) at any time outstanding in excess of U.S.$50.0 million.

The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

(1) the incurrence by the Company and any Guarantor of Indebtedness pursuant to the Senior Credit Facilities in an aggregate principal amount at any time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder not to exceed U.S.$500.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries to permanently repay Indebtedness under the Senior Credit Facilities pursuant to the covenant described under the caption “Purchase at the Option of Holders—Asset Sales”;

(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

(3) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date, the Subsidiary Guarantees of such Notes, the Exchange Notes issued in exchange for such Notes (or in exchange for any additional Notes issued in accordance with the terms of the Indenture) and the Subsidiary Guarantees thereof;

(4) the incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations) to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) within 180 days after such purchase, lease or improvement in an aggregate principal amount outstanding (which amount may, but need not, be incurred in whole or in part under the Senior Credit Facilities) not to exceed the greater of (a) U.S.$20.0 million or (b) 2.0% of Total Tangible Assets at the time of any incurrence thereof, including any Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4);

(5) the incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clause (2), (3), (4), (5), (17) or (19) of this paragraph;

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(6) the incurrence by the Company or any Restricted Subsidiary of intercompany Indebtedness between or among the Company and any Restricted Subsidiary; provided that:

(a) if the Company or any Guarantor is the obligor on such Indebtedness and the obligee is not the Company or any Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee of such Guarantor, in the case of a Guarantor; and

(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

(7) the incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are incurred for the purpose of fixing or hedging (i) interest rate risk with respect to any floating or fixed rate Indebtedness that is permitted by the terms of the Indenture to be outstanding or (ii) the value of foreign currencies purchased or received by the Company in the ordinary course of business;

(8) the guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company, a Guarantor or a Non-Guarantor Restricted Subsidiary that was permitted to be incurred by another provision of this covenant;

(9) the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock; provided in each such case that the amount thereof is included in Fixed Charges of the Company as accrued;

(10) Indebtedness incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, in respect of workers’ compensation claims or self insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;

(11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

(12) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;

(13) Indebtedness supported by one or more letters of credit incurred under the Senior Credit Facilities in accordance with clause (1); provided the amount of Indebtedness permitted to be incurred under this clause (13) relating to any such letter of credit shall not exceed the amount of the letter of credit provided for therein; provided, further, upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under the Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in replacement of such letter of credit;

(14) the incurrence of Indebtedness and/or the issuance of preferred stock by Non-Guarantor Restricted Subsidiaries of the Company, which together with the aggregate principal amount of Indebtedness incurred pursuant to this clause (14) and the aggregate liquidation value of all preferred stock issued pursuant to this clause (14), does not exceed U.S.$50.0 million at any time outstanding;

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(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within two business days of incurrence;

(16) Attributable Debt in an amount not to exceed U.S.$25.0 million at any one time outstanding;

(17) the incurrence by the Company or any Restricted Subsidiary of Indebtedness solely for working capital purposes pursuant to a facility which lends solely on a percentage of accounts receivables in an amount not to exceed the greater of (a) U.S.$75.0 million or (b) 7.5% of Total Tangible Assets at the time of any incurrence thereof, including any Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (17);

(18) the incurrence by a Securitization Entity of Non-Recourse Debt in connection with or pursuant to a Permitted Securitization Transaction; and

(19) the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness, and/or the issuance by any Restricted Subsidiary of preferred stock, in an aggregate principal amount (or accreted value, as applicable) or aggregate liquidation value, as applicable, at any time outstanding (which amount may, but need not, be incurred in whole or in part under the Senior Credit Facilities), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred or preferred stock issued pursuant to this clause (19), not to exceed U.S.$20.0 million at any one time outstanding.

For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. All borrowings outstanding on the Issue Date under the Senior Credit Facilities will be deemed to have been borrowed pursuant to clause (1) of the definition of “Permitted Debt.”

No Senior Subordinated Debt

The Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is contractually subordinate or junior in right of payment to any Senior Debt of the Company and senior in any respect in right of payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is contractually subordinate or junior in right of payment to any Guarantor Senior Debt of such Guarantor and senior in any respect in right of payment to such Guarantor’s Subsidiary Guarantee. For purposes of the foregoing, no Indebtedness will be deemed to be contractually subordinated or junior in right of payment in respect to any other Indebtedness of the Company or a Guarantor solely by virtue of being unsecured or by virtue of the fact that the holders of secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.

Liens

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness or trade payables on any asset now owned or hereafter acquired, except Permitted Liens, unless all payments due under the Indenture and the Notes are secured on an equal and ratable basis with the Indebtedness so secured until such time as such is no longer secured by a Lien; provided that if such Indebtedness is by its terms expressly subordinated to the Notes or any Subsidiary Guarantee, the Lien securing such Indebtedness shall be subordinate and junior to the Lien securing the Notes and the Subsidiary Guarantees with the same relative priority as such subordinate or junior Indebtedness shall have with respect to the Notes and the Subsidiary Guarantees.

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Dividend and Other Payment Restrictions Affecting Subsidiaries

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to:

(a) pay dividends or make any other distributions on its Capital Stock to the Company or any of the Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the Company or any of the Restricted Subsidiaries;

(b) make loans or advances to the Company or any of the Restricted Subsidiaries; or

(c) transfer any of its properties or assets to the Company or any of the Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1) Existing Indebtedness as in effect on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that the encumbrances or restrictions in such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, in the good faith judgment of the Board of Directors of the Company, taken as a whole, than those contained in such Existing Indebtedness, as in effect on the Issue Date;

(2) the Indenture, the Notes and the Subsidiary Guarantees;

(3) the Senior Credit Facilities;

(4) applicable law;

(5) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

(6) non-assignment provisions in leases, licenses or similar agreements entered into in the ordinary course of business;

(7) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (c) of the preceding paragraph;

(8) asset sale agreements and stock sale agreements, including any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending its sale or other disposition;

(9) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, in the good faith judgment of the Board of Directors of the Company, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(10) restrictions on the transfer of assets subject to any Lien permitted under the Indenture imposed by the holder of such Lien;

(11) Liens securing Indebtedness otherwise permitted to be incurred pursuant to the provisions of the covenant described under the caption “—Liens” that limit the right of the Company or any of its Restricted Subsidiaries to dispose of the assets subject to such Lien;

(12) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business;

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(13) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(14) Indebtedness incurred after the Issue Date in accordance with the terms of the Indenture; provided that the restrictions contained in the agreements governing such new Indebtedness are not materially more restrictive, in the good faith judgment of the Board of Directors of the Company, taken as a whole, to the Holders of the Notes than those contained in the agreements governing Indebtedness on the Issue Date;

(15) any agreement or instrument placing contractual restrictions applicable only to a Securitization Entity effected in connection with, or Liens on receivables or related assets which are the subject of, a Permitted Securitization Transaction;

(16) any agreement or instrument governing Indebtedness or preferred stock (whether or not outstanding) of Non-Guarantor Restricted Subsidiaries of the Company that was permitted by the Indenture to be incurred;

(17) any encumbrances or restrictions imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (16) above; provided that the encumbrances or restrictions in such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, in the good faith judgment of the Board of Directors of the Company, taken as a whole, than the encumbrances or restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

Merger, Consolidation or Sale of Assets

The Company may not, directly or indirectly: (1) consolidate with, amalgamate with, or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person; unless:

(1) either: (a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia or the laws of Canada or any province or territory thereof;

(2) the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes, the Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee;

(3) immediately after such transaction no Default or Event of Default will have occurred and be continuing; and

(4) the Company or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Company) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Four-Quarter Period, (a) be permitted to incur at least U.S.$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock” or (b) will have a Fixed Charge Coverage Ratio greater than the Fixed Charge Coverage Ratio of the Company immediately prior to such transaction.

In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person unless the provisions of the preceding paragraph are complied with.

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For purposes of this covenant, the sale, assignment, transfer, conveyance or other disposition (including by way of merger, amalgamation or consolidation) of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which property or assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, will be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, conveyance or other disposition by the Company (other than by lease) of all or substantially all of the properties and assets of the Company, in accordance with this covenant, the successor Person formed by such consolidation or into which the Company is merged or with which the Company is amalgamated or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Notes. In the event of any such transfer (other than a transfer of less than all of the properties and assets of the Company), the predecessor Company shall be released and discharged from all liabilities and obligations in respect of the Notes and the Indenture, and the predecessor Company may be dissolved, wound up or liquidated at any time thereafter.

This “Merger, Consolidation or Sale of Assets” covenant will not apply to:

(1) a merger or amalgamation of the Company with an Affiliate solely for the purpose of reincorporating the Company in another jurisdiction;

(2) any sale, transfer, assignment, conveyance, lease or other disposition of assets between or among the Company and any of its Wholly Owned Restricted Subsidiaries; and

(3) any consolidation, amalgamation or merger between or among the Company and any of the Guarantors.

Transactions with Affiliates

The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:

(1) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(2) the Company delivers to the Trustee:

(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of U.S.$10.0 million, a resolution of the Board of Directors set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of U.S.$15.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1) reasonable fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company, any direct or indirect parent corporation of the Company, or any Subsidiary as determined in good faith by the Board of Directors of the Company or senior management;

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(2) transactions between or among the Company and/or its Restricted Subsidiaries or any Person that becomes a Restricted Subsidiary as a result of such transaction;

(3) any agreement or instrument as in effect as of the Issue Date or any amendment or replacement thereof or any transaction contemplated thereby (including pursuant to any amendment or replacement thereof) so long as any such amendment or replacement agreement or instrument is, in the good faith judgment of the Board of Directors of the Company, not more disadvantageous to the Holders of Notes in any material respect than the original agreement or instrument as in effect on the Issue Date;

(4) payments to the Principals and their respective Affiliates made pursuant to any management, financial advisory, financing, underwriting or placement agreement or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which are approved by the board of directors of the Company or such Restricted Subsidiary in good faith;

(5) payments or loans to employees or consultants that are approved by the Board of Directors of the Company in good faith;

(6) the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (6) to the extent that the terms of any such amendment or new agreement are not more disadvantageous to the Holders of Notes in any material respect than any such agreement in effect on the Issue Date;

(7) transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services, in each case in the ordinary course of business (including, without limitation, pursuant to joint venture agreements) and otherwise in compliance with the terms of the Indenture which are fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms that are not materially less favorable than those that would reasonably have been obtained at such time from an unaffiliated party;

(8) issuances or sales of Equity Interests of the Company (other than Disqualified Stock) to Affiliates of the Company otherwise permitted by the Indenture and the granting of registration rights in connection therewith;

(9) Restricted Payments and Permitted Investments that are permitted by the Indenture;

(10) transactions effected as part of a Permitted Securitization Transaction; and

(11) any agreement or instrument between the Company or any Restricted Subsidiary and any Affiliate thereof relating to floorplan financing and receivables factoring arrangements and any transactions contemplated thereby.

Notwithstanding any other provision of this covenant, any transaction, contract, agreement, understanding, loan, advance, guarantee, payment, sale, lease, transfer, disposition or purchase entered into between the Company or any of its Restricted Subsidiaries with or for the benefit of any Person, which at the time of the occurrence of, or entering into, of any of the foregoing was not an Affiliate, is not subject to the provisions of this covenant, notwithstanding the fact that after the occurrence of, or entering into, of any of the foregoing, such Person would be or would thereafter become an Affiliate.

Designation of Restricted and Unrestricted Subsidiaries

The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all

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outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an Investment made as of the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of the covenant described under the caption “—Restricted Payments” or Permitted Investments, as determined in good faith by the Board of Directors of the Company. All such outstanding Investments will be valued at their fair market value at the time of such designation. That designation will only be permitted if such Restricted Payment or Investment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default.

Limitations on Issuances of Guarantees of Indebtedness

The Company will not permit any Restricted Subsidiary that is not a Guarantor, directly or indirectly, to Guarantee the payment of Indebtedness of the Company or any guarantor under the Senior Credit Facilities unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary which Guarantee of the Notes shall be subordinated to the Guarantee of the Senior Credit Facilities to the same extent as the Subsidiary Guarantees are subordinated to such Guarantor Senior Debt.

Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the Notes will provide by its terms that it will be automatically and unconditionally released and discharged under the circumstances described under the caption “Subsidiary Guarantees.” The form of the Subsidiary Guarantee will be attached as an exhibit to the Indenture.

Business Activities

The Company will not, and will not permit any Restricted Subsidiary (other than a Securitization Entity) to, engage in any business other than the Permitted Business, except to such extent as would not be material to the Company or its Restricted Subsidiaries taken as a whole.

Reports

Whether or not required by the Commission, so long as any Notes are outstanding, if not filed electronically with the Commission through the Commission’s Electronic Data Gathering, Analysis, and Retrieval System (or any successor system), the Company will furnish to the Holders of Notes and the Trustee, within the time periods specified in the Commission’s rules and regulations, all financial information that would be required to be contained in a report filed with or furnished to the Commission on Forms 20-F, 40-F or 6-K, as applicable, if the Company were required to file or furnish such reports, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants.

If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, and such Unrestricted Subsidiaries would otherwise have been a Significant Restricted Subsidiary, then, to the extent permitted by applicable law, the financial information required by the preceding paragraph shall include condensed consolidating footnote data in the form required by the Commission with respect to the Unrestricted Subsidiaries of the Company.

In addition, following the consummation of the Exchange Offer, or upon the effectiveness of any Shelf Registration Statement, the Company will file with or furnish to the Commission a copy of all of the information and reports referred to in the first paragraph of this covenant for public availability within the time periods specified in the Commission’s rules and regulations (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. Moreover, the Company has agreed that, for so long as any Notes remain outstanding, it will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

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Events of Default

Each of the following will constitute an Event of Default:

(1) default for 30 days in the payment when due of interest on, or additional interest with respect to, the Notes, whether or not prohibited by the subordination provisions of the Indenture;

(2) default in payment when due of the principal of or premium, if any, on the Notes, whether or not prohibited by the subordination provisions of the Indenture;

(3) failure by the Company or any of its Restricted Subsidiaries for 30 days after specified notice from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes to comply with any of the other covenants in the Indenture or the Notes;

(4) failure by the Company or any of its Restricted Subsidiaries for 30 days after specified notice from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes to comply with the provisions set forth under “Purchase at the Option of Holders—Change of Control” or “Purchase at the Option of Holders—Asset Sales”;

(5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the Issue Date, if that default:

(a) is caused by a failure to pay principal of, or interest or premium, if any, at the final stated maturity of such Indebtedness (giving effect to any applicable grace periods and any extensions thereof) (a “Payment Default”); or

(b) results in the acceleration of such Indebtedness prior to its express maturity (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration),

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated aggregates U.S.$15.0 million or more;

(6) failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of U.S.$15.0 million (excluding amounts covered by an enforceable insurance policy issued by an insurer with a Best’s rating of at least B+, as to which the insurer has acknowledged liability), which judgments are not paid, discharged or stayed for a period of 60 consecutive days after such judgments become final and non-appealable;

(7) any Subsidiary Guarantee of a Significant Restricted Subsidiary ceases to be in full force and effect or is declared by a court of competent jurisdiction to be null and void and unenforceable or is found by a court of competent jurisdiction to be invalid, or any of the Guarantors denies its liability under its Subsidiary Guarantee, other than by reason of release of a Guarantor in accordance with the terms of the Indenture; and

(8) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Restricted Subsidiaries.

In the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Company, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default specified in the Indenture occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes may declare the principal of and accrued interest on the Notes to be due and payable by notice in writing to the Company and the Trustee specifying the respective Event of Default and that such notice is a “notice of acceleration” (the “Acceleration Notice”) and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Senior Credit

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Facilities, shall become immediately due and payable upon the first to occur of an acceleration under the Senior Credit Facilities or five Business Days after receipt by the Company and the Representative under the Senior Credit Facilities of such Acceleration Notice but only if such Event of Default is then continuing.

Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture (including rescinding any acceleration of the payment of the Notes) except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes.

In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to December 15, 2008, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to December 15, 2008, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

The Company will be required to deliver to the Trustee annually a statement regarding compliance with the Indenture. Forthwith upon becoming aware of any Default or Event of Default, the Company will be required to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No past, present or future director, officer, employee, incorporator or stockholder of the Company, any direct or indirect parent corporation of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Subsidiary Guarantees. Such waiver may not be effective to waive liabilities under U.S. federal securities laws.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees (“Legal Defeasance”) except for:

(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest and additional interest, if any, on such Notes when such payments are due from the trust referred to below;

(2) the Company’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

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(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s obligations in connection therewith; and

(4) the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to certain covenants that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (including non-payment of other indebtedness, bankruptcy, receivership, rehabilitation and insolvency events described under “Events of Default” and the limitations contained in clauses (3) and (4) of “Merger, Consolidation or Sale of Assets”) will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable U.S. government securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants selected by the Company, to pay the principal of, premium, if any, and interest and additional interest, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in Canada reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for Canadian federal income tax purposes as a result of such Legal Defeasance and will be subject to Canadian federal income tax (including withholding tax) on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(4) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax (including withholding tax) on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(5) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in Canada reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for Canadian federal income tax purposes as a result of such Covenant Defeasance and will be subject to Canadian federal income tax (including withholding tax) on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(6) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings);

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(7) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under the Senior Credit Facilities or any other material agreement or instrument (other than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(8) the Company shall have delivered to the Trustee an opinion of counsel reasonably acceptable to the Trustee to the effect that after the 91st day following the deposit, in the case of Legal Defeasance, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and in the case of Covenant Defeasance, the trust funds will be subject to a valid first priority Lien to secure the Notes which is not subject to avoidance under any Bankruptcy Code;

(9) the Company shall have delivered to the Trustee an officers’ certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(10) the Company shall have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect, as to all Notes issued thereunder, when:

(1) either

(a) all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or

(b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable government securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and additional interest, if any, and accrued interest to the date of maturity or redemption;

(2) no Default or Event of Default (other than one resulting solely from the borrowing of funds to provide such deposit) shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;

(3) the Company or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture; and

(4) the Company has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Company must deliver an officers’ certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

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Amendment, Supplement and Waiver of Indenture

Except as provided in the next three succeeding paragraphs, the Indenture and the Notes may be amended or supplemented only with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or non-compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).

Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or premium on or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to the covenants described under the caption “Purchase at the Option of Holders”);

(3) reduce the rate of or change the time for payment of interest, including default interest, on any Note;

(4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

(5) make any Note payable in currency other than that stated in the Notes;

(6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of or premium, if any, or interest on the Notes;

(7) waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described under the caption “Purchase at the Option of Holders”);

(8) make any change in the preceding amendment and waiver provisions; or

(9) release any Guarantor from any of its obligations under its Subsidiary Guarantee or the Indenture otherwise than in accordance with the terms of the Indenture.

In addition, any amendment to, or waiver of, the provisions of the Indenture relating to subordination that adversely affects the rights of the Holders of the Notes will require the consent of the Holders of at least 75% in aggregate principal amount of Notes then outstanding.

Notwithstanding the preceding, without the consent of any Holder of Notes, the Company, or any Guarantor, with respect to its Subsidiary Guarantee or the Indenture, and the Trustee may amend or supplement the Indenture or the Notes or any Subsidiary Guarantee:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to provide for the assumption of the Company’s, or any Guarantor’s, obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Company’s, or such Guarantor’s, as the case may be, assets;

(4) to make any change that would provide any additional rights or benefits to the Holders of Notes, including providing for additional Subsidiary Guarantees, or that does not adversely affect the legal rights under the Indenture of any such Holder;

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(5) to release any Guarantor from any of its obligations under its Subsidiary Guarantee or the Indenture (to the extent permitted by the Indenture); or

(6) to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.

Consent to Jurisdiction and Service of Process

The Company and each Guarantor will appoint Corporation Service Company as its agent for service of process in any suit, action or proceeding with respect to the Indenture or the Notes brought in any federal or state court located in the Borough of Manhattan in the City of New York and each of the parties will submit to the non-exclusive jurisdiction thereof.

Governing Law

The Indenture and the Notes will be governed by and construed in accordance with the internal laws of the State of New York.

Enforceability of Judgments

Since the majority of our assets are outside the United States, any judgment obtained in the United States against us, including judgments with respect to the payment of principal, premium, interest, additional interest, Additional Amounts, Change of Control Purchase Price, offer price, redemption price or other amounts payable under the Notes, may not be collectible within United States.

We have been informed by Canadian counsel that the laws of the Provinces of Ontario, Alberta and Québec and the federal laws of Canada applicable therein permit an action or a motion to be brought before a court of competent jurisdiction in such Province (a “Canadian Court”) on any final, conclusive and enforceable judgment in personam of any federal or state court located in the Borough of Manhattan in the City of New York (“New York Court”) that is not impeachable as void or voidable under the laws of the State of New York (“New York Law”) for a sum certain in respect of the Indenture or the Notes if: (i) the court rendering such judgment had jurisdiction over the judgment debtor, as recognized by a Canadian Court (and submission by the Company in the Indenture to the nonexclusive jurisdiction of the New York Court will be sufficient for that purpose), (ii) such judgment was not obtained by fraud or in a manner contrary to natural justice or in contravention of the fundamental principles of procedure and the decision and the enforcement thereof would not be inconsistent with public policy, as such term is understood under the laws of the Provinces of Ontario and Alberta, as the case may be (or in the Province of Québec if the outcome of the decision of the New York Court is not manifestly inconsistent with public order as understood in international relations, as that term is applied by a court of competent jurisdiction in the Province of Québec), (iii) such judgment is not contrary to any order made by the Attorney General of Canada under the Foreign Extraterritorial Measures Act (Canada) or by the competition tribunal under the Competition Act (Canada), (iv) the enforcement of such judgment does not constitute, directly or indirectly, the enforcement of foreign revenue laws (including taxation laws) or expropriatory or penal laws, (v) the action or motion to enforce such judgment is commenced within the applicable limitation period, (vi) in the Province of Québec, a dispute between the same parties, based on the same facts and having the same object, has not given rise to a decision rendered in the Province of Québec, whether it has acquired the authority of a final judgment or not, or is not pending before a Québec authority, in the first instance, or has not been decided in a third country and the decision meets the necessary conditions for recognition in the Province of Québec, (vii) in the Province of Québec, the decision has not been rendered by default unless the plaintiff proves that the act of procedure initiating the proceedings was duly served on the defaulting party in accordance with the law of the place where the decision was rendered, provided that the defaulting party does not prove that, owing to the circumstances, it was unable to learn of the act of procedure initiating the proceedings or was not given sufficient time to offer its defense and (viii) in the Provinces of Ontario and Alberta, a dispute between the same parties based on the same subject matter has not given rise to a decision rendered by the Canadian Court in such jurisdiction or been decided by a foreign authority and the decision meets the necessary conditions for

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recognition under the law of the relevant province. We have been advised by our Canadian counsel that they have no reason to believe, based upon public policy or order, as those terms are understood in international relations and under the laws of the Provinces of Ontario, Alberta and Québec and the federal laws of Canada applicable therein, as those terms are applied by a Canadian Court on the date hereof, for avoiding recognition of a judgment of a New York Court to enforce the Indenture or the Notes.

In addition, under the Currency Act (Canada), a Canadian Court may only render judgment for a sum of money in Canadian currency, and in enforcing a foreign judgment for a sum of money in a foreign currency, a Canadian Court will render its decision in the Canadian currency equivalent of such foreign currency.

Concerning the Trustee

If the Trustee becomes a creditor of the Company or any Guarantor, the Indenture will limit its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

The Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his or her own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

Anyone who receives this prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to Bombardier Recreational Products Inc., 1061 Parent Street, Saint-Bruno, Québec, Canada J3V 6P1, Attention: General Counsel.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

“Acquired Debt” means, with respect to any specified Person:

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or becomes a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings. For purposes of the Indenture, neither Bombardier Inc.

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nor Bombardier Capital Inc. shall be deemed to be an Affiliate of the Company or any of its Subsidiaries for so long as Bain or Bain and Caisse are the Beneficial Owners of more of the total voting power of all classes of Voting Stock of the Company than is Beneficially Owned by Beaudier.

“Applicable Premium” means, with respect to any Note on any Redemption Date, the greater of (i) 1% of the principal amount of such Note or (ii) the excess of (A) the present value at such Redemption Date of (1) the redemption price of such Note at December 15, 2008 (such redemption price being set forth in the fourth paragraph under the caption “—Optional Redemption”), plus (2) all required interest payments due on such Note through December 15, 2008 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate at such Redemption Date plus 50 basis points over (B) the principal amount of such Note.

“Asset Acquisition” means (a) an Investment by the Company or any Restricted Subsidiary of the Company in any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary of the Company, or shall be merged, consolidated or amalgamated with or into the Company or any Restricted Subsidiary of the Company, or (b) the acquisition by the Company or any Restricted Subsidiary of the Company of all or substantially all of the assets of any other Person or any division or line of business of any other Person.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback), other than sales, leases, conveyances, dispositions or licenses in the ordinary course of business; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described under the caption “Purchase at the Option of Holders—Change of Control” and/or the provisions described under the caption “Certain Covenants—Merger, Consolidation or Sale of Assets” and not by the provisions described under the caption “Purchase at the Option of Holders—Asset Sales”; and

(2) the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries (other than directors’ qualifying shares and shares issued to foreign nationals under applicable law).

Notwithstanding the preceding, the following items shall be deemed not to be Asset Sales:

(1) any single transaction or series of related transactions that: (a) involves assets having a fair market value of less than U.S.$2.5 million; or (b) results in net proceeds to the Company and its Subsidiaries of less than U.S.$2.5 million;

(2) disposals or replacements of obsolete equipment in the ordinary course of business;

(3) the sale, lease, conveyance, disposition or other transfer by the Company or any Restricted Subsidiary of assets or property or Equity Interests of any Restricted Subsidiary to one or more Restricted Subsidiaries in connection with Investments permitted by the covenant described under the caption “Certain Covenants—Restricted Payments”;

(4) a transfer of assets between or among the Company and/or its Restricted Subsidiaries;

(5) an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary;

(6) a Restricted Payment, Permitted Investment or Permitted Lien that is permitted by the Indenture;

(7) the issuance by a Restricted Subsidiary of Disqualified Stock or preferred stock that is permitted by the covenant described under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock”;

(8) sales of accounts receivable, chattel paper and related assets in receivables factoring arrangements and floorplan financing arrangements; and

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(9) sales of accounts receivable, chattel paper and related assets of the type described in the definition of “Permitted Securitization Transaction” to a Securitization Entity for the fair market value thereof and transfers of accounts receivable, chattel paper and related assets of the type described in the definition of “Permitted Securitization Transactions” (or a fractional undivided interest therein) by a Securitization Entity in a Permitted Securitization Transaction.

“Attributable Debt” in respect of a Sale and Leaseback Transaction, as at the time of determination, means the present value (discounted at a rate equivalent to the rate of interest implicit in such lease, determined in accordance with GAAP) of the obligations of the lessee for net rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.

“Bain” means Bain Capital Investors, LLC or any of its Affiliates.

“Bankruptcy Code” means (a) Title 11 of the United States Code, as amended, (b) the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or (c) any similar United States or Canadian federal, state or provincial law relating to bankruptcy, insolvency, winding up, liquidation reorganization, or the relief of debtors.

“Beaudier” means Beaudier Group or any of its Affiliates.

“Beaudier Group” means, on any date, any individual who is, or a combination of individuals who are, descendants (as determined in accordance with, and notwithstanding any other provision herein, the law of Québec) of, Joseph-Armand Bombardier, and the spouses, whether by marriage, civil union or common law relationship, of such individuals and each trust created solely for the benefit of any such individual or individuals, each of whom owns, directly or indirectly, through the Family Holding Companies or one or more Affiliates, an Equity Interest in the Company or in the Parent.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as such term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition.

“Caisse” means Caisse de dépôt et placement du Québec or any of its Affiliates.

“Capital Lease Obligation” means, at any time of determination, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Cash Equivalents” means:

(1) Canadian or U.S. dollars and for purposes of the definition of “Permitted Investments” only, Euros and, in the case of a Subsidiary that is not a Domestic Subsidiary, such other local currencies held by it from time to time in the ordinary course of business;

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(2) marketable direct obligations issued by, or unconditionally guaranteed by, the federal government of the United States of America or Canada, respectively, or issued by any agency or instrumentality thereof and backed by the full faith and credit of the federal government of the United States of America or Canada, respectively, in each case maturing within one year from the date of acquisition thereof;

(3) marketable direct obligations issued by any state of the United States of America, the District of Columbia or any province or territory of Canada or any political subdivision of any such state, province or territory, as the case may be, or any agency or instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Ratings Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”); provided that, in the event that any such obligation is not rated by S&P or Moody’s, such obligation will have the highest rating from Dominion Bond Rating Service Limited (“DBRS”);

(4) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least R-1 (low) from DBRS or A-2 from S&P or at least P-2 from Moody’s;

(5) overnight deposits, certificates of deposit or bankers’ acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or Canada or any state, province or territory, as the case may be, thereof or the District of Columbia or any U.S. or Canadian branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than U.S.$250.0 million;

(6) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (2) of this definition entered into with any bank meeting the qualifications specified in clause (5) of this definition;

(7) instruments equivalent to those referred to in clauses (1) to (6) above denominated in Euros or any other foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States and Canada to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction; and

(8) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (7) of this definition.

“Change of Control” means the occurrence of any of the following:

(1) the direct or indirect sale, transfer, conveyance, exchange or other disposition (other than by way of merger, amalgamation or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than one or more Permitted Holders or a Permitted Group;

(2) the adoption of a plan relating to the liquidation or dissolution of the Company;

(3) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders or a Permitted Group, becomes the Beneficial Owner, directly or indirectly, of 50% or more of the total voting power of all classes of Voting Stock of the Company;

(4) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors; or

(5) the Company consolidates or amalgamates with, or merges with or into, any Person, or any Person consolidates or amalgamates with, or merges with or into, the Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Company or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where (A) the Voting Stock of the Company outstanding immediately prior to such transaction is converted into or exchanged for, or remains outstanding as, Voting Stock (other than Disqualified Stock) of the surviving or

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transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such transaction) and (B) immediately after such transaction, no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders or a Permitted Group, becomes, directly or indirectly, the Beneficial Owner of 50% or more of the total voting power of all classes of Voting Stock of the Company.

“Consolidated Cash Flow” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus:

(1) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

(2) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and the net effect of all payments made or received, if any, pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

(3) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period), non-cash write-offs of and impairment charges related to goodwill, intangibles and long-lived assets and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such items were deducted in computing such Consolidated Net Income; plus

(4) the benefit (or to the extent not already deducted in computing Consolidated Net Income, the loss) of fair value amounts ascribed to foreign currency hedging contracts in purchase accounting (or the deferred gain related to foreign currency hedging contracts terminated on or prior to the Issue Date) in the period in which the underlying contract is scheduled to be closed out; minus

(5) non-cash items increasing such Consolidated Net Income for such period, other than (i) items that were accrued in the ordinary course of business and (ii) the reversal of prior accruals and reserves in the ordinary course of business, in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Restricted Subsidiary of the Company shall be added to Consolidated Net Income to compute Consolidated Cash Flow of the Company only to the extent that a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders.

“Consolidated Net Income” of the Company means, for any period, the aggregate net income (or loss) of the Company and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP, provided that there shall be excluded therefrom:

(1) gains and losses from Asset Sales (without regard to the U.S.$2.5 million limitation set forth in the definition thereof) and the related tax effects according to GAAP;

(2) unrealized gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP;

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(3) items classified as extraordinary, unusual or nonrecurring gains and losses (including, without limitation, severance, relocation and other restructuring costs), and the related tax effects according to GAAP;

(4) the net income of any Restricted Subsidiary of the Company to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of the Company of that income is restricted by contract, operation of law or otherwise;

(5) the net loss of any Person, other than a Restricted Subsidiary of the Company;

(6) the net income of any Person, that is not a Restricted Subsidiary of the Company, except to the extent of cash dividends or distributions paid to the Company or a Restricted Subsidiary of the Company by such Person;

(7) the cumulative effect of a change in accounting principles;

(8) non-cash compensation charges, including any arising from existing stock options resulting from any merger or recapitalization transaction;

(9) costs and expenses incurred in connection with the Transactions;

(10) non-cash write-offs and impairment charges related to goodwill, intangibles and long-lived assets; and

(11) inventory purchase accounting adjustments made as a result of the Transactions and any other acquisition transaction.

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company who:

(1) was a member of such Board of Directors on the Issue Date; or

(2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election or by the Principals.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Designated Non-Cash Consideration” means any non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is designated as Designated Non-Cash Consideration pursuant to an officers’ certificate executed by the principal executive officer and the principal financial officer of the Company or such Restricted Subsidiary. Such officers’ certificate shall state the basis of such valuation, which shall be a report of a nationally recognized investment banking firm with respect to the receipt in one or a series of related transactions of Designated Non-Cash Consideration with a fair market value in excess of U.S.$15.0 million. A particular item of Designated Non-Cash Consideration shall no longer be considered to be outstanding to the extent it has been sold for cash or redeemed or paid in the case of non-cash consideration in the form of promissory notes or equity.

“Designated Preferred Stock” means preferred stock that is designated as Designated Preferred Stock, pursuant to an officers’ certificate executed by the principal executive officer and the principal financial officer of the Company, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3)(b) of the second paragraph of the covenant entitled “Certain Covenants—Restricted Payments.”

“Designated Senior Debt” means:

(1) any Indebtedness under or in respect of the Senior Credit Facilities; and

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(2) any other Senior Debt the principal amount of which is U.S.$25.0 million or more and that has been specifically designated by the Company in the instrument or agreement relating to the same as “Designated Senior Debt.”

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described under the caption “Certain Covenants—Restricted Payments.”

“Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States of America, any state thereof or the District of Columbia or the laws of Canada or any province or territory thereof.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any offering of Qualified Capital Stock of any direct or indirect parent corporation of the Company or the Company; provided that, in the event of any Equity Offering by any direct or indirect parent corporation of the Company, such direct or indirect parent corporation of the Company contributes to the common equity capital of the Company (other than as Disqualified Stock) the portion of the net cash proceeds of such Equity Offering necessary to pay the aggregate redemption price (plus accrued interest to the redemption date) of the Notes to be redeemed pursuant to the first paragraph under the caption “Optional Redemption.”

“Existing Indebtedness” means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Senior Credit Facilities) in existence on the Issue Date, until such amounts are repaid.

“Family Holding Companies” means, collectively, Beaudier Inc., Jadier International Inc., Gestion J.I.C.A. Inc. and Fonds Achbee Inc., in each case for so long as such corporation continues to be used as a holding corporation for one or more members of the Beaudier Group and such members continue to beneficially hold, directly or indirectly, not less than 85% of the ownership interests in such corporation.

“Fixed Charge Coverage Ratio” means, with respect to any Person as of any date, the ratio of the Consolidated Cash Flow of such Person during the most recent four full fiscal quarters for which internal financial statements are available (the “Four-Quarter Period”) ending on or prior to such date (the “Transaction Date”) to the Fixed Charges of such Person for the Four-Quarter Period.

In addition to and without limitation of the preceding paragraph, for purposes of this definition, Consolidated Cash Flow and Fixed Charges shall be calculated after giving effect on a pro forma basis for the period of such calculation to:

(1) the incurrence of any Indebtedness or the issuance of any preferred stock of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) and any repayment of other Indebtedness or redemption of other preferred stock (other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to any revolving credit arrangement) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period;

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(2) any Asset Sales or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Debt and also including any Consolidated Cash Flow (including any Pro Forma Cost Savings) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Indebtedness or Acquired Debt) occurred on the first day of the Four-Quarter Period;

(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Transaction Date; and

(4) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, will be excluded.

If such Person or any of its Restricted Subsidiaries directly or indirectly Guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating Fixed Charges for purposes of determining the denominator (but not the numerator) of this Fixed Charge Coverage Ratio:

(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date;

(2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter Period; and

(3) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.

For purposes of calculating the Fixed Charge Coverage Ratio prior to the expiration of the first Four-Quarter Period commencing after the Issue Date, such calculation shall be on the same pro forma basis as the pro forma financial statements that are presented in this prospectus.

“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments made or received, if any, pursuant to Hedging Obligations, but excluding amortization or write-off of debt issuance costs; plus

(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

(3) any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

(4) the product of (a) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests to the

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extent paid in Equity Interests of the Company (other than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

“GAAP” means generally accepted accounting principles in Canada as in effect on the Issue Date.

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

“Guarantor Senior Debt” means, with respect to any Guarantor:

(1) all Indebtedness outstanding under Senior Credit Facilities and all Hedging Obligations (including guarantees thereof) of such Guarantor, whether outstanding on the Issue Date or thereafter incurred;

(2) any other Indebtedness incurred by such Guarantor, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to such Guarantor’s Subsidiary Guarantee; and

(3) all Obligations with respect to the items listed in the preceding clauses (1) and (2) (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law).

Notwithstanding anything to the contrary in the preceding, Guarantor Senior Debt will not include:

(1) any liability for federal, state, provincial, territorial, local or other taxes owed or owing by such Guarantor;

(2) any Indebtedness of such Guarantor to any of its Subsidiaries or other Affiliates of such Guarantor;

(3) any trade payables;

(4) that portion of any Indebtedness that is incurred by such Guarantor in violation of the Indenture; provided that, (x) as to any such Indebtedness, no such violation shall be deemed to exist for purposes of this clause (4) if the holder(s) of such Indebtedness or their Representative shall have received an officers’ certificate of (or representation from) the Company to the effect that the incurrence of such Indebtedness does not violate the provisions of the Indenture, or, in the case of revolving credit Indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not violate the provisions of the Indenture and (y) any revolving Indebtedness of such Guarantor under the Senior Credit Facilities incurred in violation of clause (1) of the definition of “Permitted Debt” at any time Indebtedness pursuant to a Permitted Securitization Transaction is outstanding shall not be excluded from Guarantor Senior Debt, so long as such Indebtedness was extended in good faith to such Guarantor;

(5) any Capital Lease Obligations; or

(6) such Guarantor’s Subsidiary Guarantee.

“Guarantors” means:

(1) each Restricted Subsidiary of the Company on the Issue Date that Guarantees Indebtedness under the Senior Credit Facilities; and

(2) any other Restricted Subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of the Indenture;

and their respective successors and assigns.

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“Hedging Obligations” means, with respect to any Person, the net obligations of such Person under:

(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and

(2) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or the value of foreign currencies.

“Indebtedness” means (without duplication), with respect to any specified Person, any indebtedness of such Person, whether or not secured or contingent, in respect of:

(1) borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

(3) bankers’ acceptances;

(4) representing Capital Lease Obligations;

(5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable;

(6) the net amount owing under Hedging Obligations; or

(7) Attributable Debt in respect of a Sale and Leaseback Transaction entered into by such Person,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by such Person of any Indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date shall be:

(1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount thereof, in the case of any other Indebtedness.

For the avoidance of doubt, representations, warranties, covenants, indemnities, reimbursement obligations and repurchase obligations of the Company or any Restricted Subsidiary and any Guarantees thereof incurred in connection with floorplan financing and receivables factoring arrangements shall not constitute Indebtedness for purposes of the Indenture.

“Initial Public Offering” means the first underwritten public offering of Qualified Capital Stock by any direct or indirect parent corporation of the Company or by the Company pursuant to a registration statement (other than a registration statement on Form F-4) filed with the Commission in accordance with the Securities Act or pursuant to a prospectus filed with the securities regulatory authority in any province of Canada for aggregate net cash proceeds of at least U.S.$65.0 million; provided that in the event the Initial Public Offering is consummated by any direct or indirect parent corporation of the Company, such direct or indirect parent corporation of the Company shall have contributed to the common equity capital of the Company at least U.S.$65.0 million of the net cash proceeds of the Initial Public Offering.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Company such that, after

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giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described under the caption “Certain Covenants—Restricted Payments.”

“Issue Date” means December 18, 2003.

“Lien” means, with respect to any asset, any mortgage or deed of trust, hypothecation, assignment, deposit, arrangement, easement, lien, pledge, charge, security interest, encumbrance or other security agreement of any kind or nature whatsoever on or in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any Capital Lease Obligation, conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“Moody’s” means Moody’s Investors Service, Inc.

“Net Proceeds” means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof, in each case after taking into account any available tax credits or deductions and any tax sharing arrangements, amounts required to be applied to the repayment of Indebtedness, other than debt under the Senior Credit Facilities, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment established in accordance with GAAP in respect of the sale price of such asset or assets or against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including without limitation pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.

“Non-Guarantor Restricted Subsidiary” means any Restricted Subsidiary that is not a Guarantor (including, without limitation, any Securitization Entity).

“Non-Recourse Debt” means indebtedness:

(1) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender, and in each case other than Standard Securitization Undertakings;

(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Senior Credit Facilities or the Notes) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

(3) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries, except in the case of Standard Securitization Undertakings.

“Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at that rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law), penalties, fees, indemnifications, expenses, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

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“Parent” means J.A. Bombardier (J.A.B.) Inc., a Canadian corporation and owner of all of the outstanding Capital Stock of the Company, or any other entity owning, directly or indirectly, a majority of the Voting Stock of the Company.

“Permitted Business” means (i) the business conducted by the Company and its Restricted Subsidiaries on the Issue Date and (ii) businesses that are reasonably similar, ancillary or related to, or a reasonable extension or expansion of, the business conducted by the Company and its Restricted Subsidiaries on the Issue Date.

“Permitted Group” means any group of investors if deemed to be a “person” (as such term is used in Section 13(d)(3) of the Exchange Act) by virtue of the Stockholders Agreement, as the same may be amended, modified or supplemented from time to time, provided that (i) one or more Permitted Holders are party to such Stockholders Agreement, (ii) no single person (other than a Permitted Holder) is the direct or indirect Beneficial Owner (determined without reference to the Stockholders Agreement) of more than 50% of the Voting Stock of the Company and (iii) no single person (other than a Permitted Holder), directly or indirectly, has the right, pursuant to the Stockholders Agreement (as so amended, supplemented or modified) or otherwise, to designate more than one-half of the directors of the Board of Directors of the Company or any direct or indirect parent corporation of the Company.

“Permitted Holders” means one or more of Bain, Beaudier or Caisse, provided that Caisse shall not be a Permitted Holder unless Bain or Beaudier (or both taken together) owns, directly or indirectly, issued and outstanding Equity Interests of the Company having a greater percentage of the ordinary voting power of the then outstanding Voting Stock of the Company than does Caisse.

“Permitted Investments” means:

(1) any Investment in the Company or in a Restricted Subsidiary of the Company;

(2) any Investment in Cash Equivalents;

(3) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of the Company; or

(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;

(4) any Investment made as a result of the receipt of non-cash consideration from (a) an Asset Sale that was made pursuant to and in compliance with the covenant described under the caption “Purchase at the Option of Holders—Asset Sales” or (b) the sale of accounts receivable, chattel paper and related assets in receivables factoring arrangements;

(5) Investments existing on the Issue Date;

(6) loans and advances to employees and officers of the Company and its Restricted Subsidiaries in the ordinary course of business;

(7) any acquisition of assets to the extent acquired in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;

(8) Investments in securities of trade creditors, licensees, suppliers or customers received in compromise of obligations of such persons incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors, licensees, suppliers or customers;

(9) receivables owing to the Company or any Restricted Subsidiary, if created or acquired in the ordinary course of business;

(10) Guarantees otherwise permitted by the terms of the Indenture;

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(11) Hedging Obligations entered into in the ordinary course of the Company’s or its Restricted Subsidiaries’ business and otherwise in compliance with the Indenture;

(12) any Investment by the Company or any Restricted Subsidiary in a Securitization Entity or any Investment by a Securitization Entity in any other person, in each case in connection with a Permitted Securitization Transaction; provided, however, that the foregoing Investment is in the form of a Purchase Money Note or an Equity Interest;

(13) Investments in a Permitted Business in an aggregate amount at any time outstanding not to exceed U.S.$10.0 million; and

(14) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (14) that are at the time outstanding, not to exceed the greater of (a) U.S.$40.0 million or (b) 4.0% of Total Tangible Assets.

“Permitted Junior Securities” means debt or equity securities of the Company or any successor corporation issued pursuant to a plan of reorganization or readjustment of the Company that are subordinated to the payment of all then outstanding Senior Debt of the Company at least to the same extent that the Notes are subordinated to the payment of all Senior Debt of the Company on the date of the Indenture, so long as:

(1) the effect of the use of this defined term in the subordination provisions contained in the Indenture is not to cause the Notes to be treated as part of:

(a) the same class of claims as the Senior Debt of the Company; or

(b) any class of claims pari passu with, or senior to, the Senior Debt of the Company for any payment or distribution in any case or proceeding or similar event relating to the liquidation, insolvency, bankruptcy, dissolution, winding up or reorganization of the Company; and

(2) to the extent that any Senior Debt of the Company outstanding on the date of consummation of any such plan of reorganization or readjustment is not paid in full in cash on such date, either:

(a) the holders of any such Senior Debt not so paid in full in cash have consented to the terms of such plan of reorganization or readjustment; or

(b) such holders receive securities which constitute Senior Debt of the Company (which are guaranteed pursuant to guarantees constituting Guarantor Senior Debt of each Guarantor) and which have been determined by the relevant court to constitute satisfaction in full in money or money’s worth of any Senior Debt of the Company (and any related Guarantor Senior Debt of the Guarantors) not paid in full in cash.

“Permitted Liens” means:

(1) Liens on assets of the Company and any Guarantor securing Indebtedness and other Obligations under the Senior Credit Facilities;

(2) Liens in favor of the Company or any Restricted Subsidiary;

(3) Liens on property of a Person existing at the time such Person is merged or amalgamated with or into or consolidated with the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Subsidiary;

(4) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

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(5) judgment Liens not giving rise to an Event of Default;

(6) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

(7) any interest or title of a lessor under any Capital Lease Obligation;

(8) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment, or storage of such inventory or other goods;

(9) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(10) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set-off;

(11) leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries;

(12) Liens arising from filing Uniform Commercial Code financing statements regarding leases;

(13) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(14) Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition;

(15) Liens to secure the performance of statutory obligations and Liens imposed by law, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(16) Liens securing Hedging Obligations which Hedging Obligations relate to Indebtedness that is otherwise permitted under the Indenture;

(17) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled “Incurrence of Indebtedness and Issuance of Preferred Stock” covering only the assets acquired with such Indebtedness;

(18) Liens existing on the Issue Date, together with any Liens securing Indebtedness incurred in reliance on clause (5) of the second paragraph of the covenant entitled “Incurrence of Indebtedness and Issuance of Preferred Stock” in order to refinance the Indebtedness secured by Liens existing on the date of the Indenture; provided that the Liens securing the refinancing Indebtedness shall not extend to property other than that pledged under the Liens securing the Indebtedness being refinanced;

(19) Liens on assets of the Company and its Restricted Subsidiaries to secure Senior Debt of the Company or Guarantor Senior Debt of a Guarantor, as the case may be, that was permitted by the Indenture to be incurred and Liens securing Indebtedness permitted by the Indenture to be incurred granted by a Non-Guarantor Restricted Subsidiary;

(20) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

(21) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed U.S.$10.0 million at any one time outstanding;

(22) Liens securing Indebtedness of Non-Guarantor Restricted Subsidiaries of the Company incurred in accordance with the Indenture;

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(23) Liens on assets transferred to a Securitization Entity or an asset of a Securitization Entity, in either case, incurred in connection with a Permitted Securitization Transaction;

(24) Liens to secure Attributable Debt permitted by clause (16) of the covenant described under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock”;

(25) Liens created or deemed to exist by the establishment of trusts or other similar arrangements in connection with self insurance programs; and

(26) Liens incurred in connection with receivables factoring arrangements and floorplan financing arrangements.

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest and premiums on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable costs and expenses incurred in connection therewith);

(2) such Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(4) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

“Permitted Securitization Transaction” means any transaction or series of transactions that qualify for off-balance sheet treatment in accordance with SFAS 140 or other applicable accounting pronouncements, pursuant to which the Company or any of its Restricted Subsidiaries may sell, contribute, convey or otherwise transfer to (i) a Securitization Entity (in the case of a transfer by the Company or any of its Restricted Subsidiaries) and (ii) any other person (in the case of a transfer by a Securitization Entity), or may grant a security interest in, any accounts receivable or chattel paper (whether now existing or arising in the future) of the Company or any of its Restricted Subsidiaries, and any assets directly related thereto, including, without limitation, all collateral securing such accounts receivable, and other assets (including contract rights and all guarantees or other obligations in respect of such accounts receivable or chattel paper, proceeds of such accounts receivable or chattel paper and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable or chattel paper).

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

“Principals” means Bain, Beaudier and Caisse.

“Pro Forma Cost Savings” means, with respect to any period, the reduction in costs and related adjustments that occurred during the Four-Quarter Period or after the end of the Four-Quarter Period and on or prior to the Transaction Date that were (i) directly attributable to an Asset Acquisition or Asset Sale and calculated on a basis that is consistent with Regulation S-X under the Securities Act as in effect and applied as of the Issue Date or

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(ii) implemented or for which the steps necessary for implementation have been taken by the Company or the business that was the subject of any such Asset Acquisition or Asset Sale within six months before or after the date of the Asset Acquisition or Asset Sale and that are supportable and quantifiable by the underlying accounting records of such business, as if, in the case of each of clause (i) and (ii), all such reductions in costs and related adjustments had been effected as of the beginning of such period.

“Purchase Money Note” means a promissory note of a Securitization Entity evidencing a line of credit, which may be irrevocable, from the Company or any Restricted Subsidiary in connection with a Permitted Securitization Transaction to a Securitization Entity, which note is repayable from cash available to such Securitization Entity, other than amounts required to be established as reserves pursuant to contractual arrangements with entities that are not Affiliates entered into as part of such Permitted Securitization Transaction, amounts paid to investors in respect of interest, principal and other amounts owing to such investors and amounts paid in connection with the purchase of newly generated accounts receivable.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Stock.

“Representative” means the indenture trustee or other trustee, agent or representative in respect of any Designated Senior Debt; provided that if, and for so long as, any Designated Senior Debt lacks such a representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt in respect of any Designated Senior Debt.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

“Sale and Leaseback Transaction” means any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of the Company of any real or tangible personal property, which property has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person in contemplation of such leasing.

“S&P” means Standard & Poor’s.

“Securitization Entity” means a Wholly Owned Restricted Subsidiary of the Company that engages in no activities other than in connection with the financing of accounts receivable, chattel paper and related assets and that is designated by the Board of Directors of the Company (as provided below) as a Securitization Entity (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any other Restricted Subsidiary (excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Company or any other Restricted Subsidiary in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the Company or any other Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the Company nor any other Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing receivables, chattel paper and related assets of such entity, and (c) to which neither the Company nor any Restricted Subsidiary (other than such entity) has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an officers’ certificate certifying that such designation complied with the foregoing conditions.

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“Senior Credit Facilities” means one or more debt facilities from time to time in effect, including that certain Credit Agreement, dated as of December 18, 2003, by and among the Company, as Canadian borrower, BRP (USA) Inc., as revolver borrower, BRP Holding LP, as U.S. term borrower, Parent and the subsidiaries party thereto from time to time, as guarantors, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, as global transaction coordinator, RBC Capital Markets, as Canadian transaction coordinator, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC, as joint book-runners and lead arrangers of the term loan facilities, BMO Nesbitt Burns Inc. and RBC Capital Markets, as joint book-runners and lead arrangers of the revolving loan facility, Bank of Montreal, as administrative agent, and the other agents and lenders from time to time party thereto, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders.

“Senior Debt” means:

(1) all Indebtedness outstanding under Senior Credit Facilities and all Hedging Obligations (including guarantees thereof) of the Company, whether outstanding on the Issue Date or thereafter incurred;

(2) any other Indebtedness incurred by the Company or a Restricted Subsidiary, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes; and

(3) all Obligations with respect to the items listed in the preceding clauses (1) and (2) (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law).

Notwithstanding anything to the contrary in the preceding, Senior Debt will not include:

(1) any liability for federal, state, provincial, territorial, local or other taxes owed or owing by the Company;

(2) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates;

(3) any trade payables;

(4) that portion of any Indebtedness that is incurred in violation of the Indenture; provided, that (x) as to any such Indebtedness, no such violation shall be deemed to exist for purposes of this clause (4) if the holder(s) of such Indebtedness or their Representative shall have received an officers’ certificate of (or representation from) the Company to the effect that the incurrence of such Indebtedness does not violate the provisions of the Indenture, or, in the case of revolving credit Indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not violate the provisions of the Indenture and (y) any revolving Indebtedness under the Senior Credit Facilities incurred in violation of clause (1) of the definition of “Permitted Debt” at any time Indebtedness pursuant to a Permitted Securitization Transaction is outstanding shall not be excluded from Senior Debt, so long as such Indebtedness was extended in good faith to the Company;

(5) any Capital Lease Obligations; or

(6) the Notes.

“Significant Restricted Subsidiary” means any Restricted Subsidiary, or group of Restricted Subsidiaries, that would, when taken together, be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated under the Securities Act, as such Regulation is in effect on the Issue Date.

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“Standard Securitization Undertakings” mean representations, warranties, guarantees, covenants and indemnities entered into by the Company or any Restricted Subsidiary that are reasonably customary in securitization transactions relating to accounts receivable, chattel paper and related assets in connection with a Permitted Securitization Transaction.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Stockholders Agreement” means the stockholders agreement dated December 18, 2003, by and among the Principals, Parent and the other stockholders of Parent referred to therein, as in effect from time to time.

“Subsidiary” means, with respect to any Person:

(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and\

(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof).

“Taxes” means any present or future tax, duty, levy, impost, assessment or other government charge (including penalties, interest and any other liabilities related thereto) imposed or levied by or on behalf of any Taxing Authority.

“Taxing Authority” means any government or any political subdivision, state, province or territory of a Taxing Jurisdiction or any authority or agency therein or thereof having power to tax.

“Taxing Jurisdiction” means Canada or any other jurisdiction in which the Company or any Guarantor or any successor of the Company or any Guarantor is organized or resident for tax purposes or conducts business, or from which or through which any payment is made, or any political subdivision thereof or therein.

“Total Tangible Assets” means the total consolidated assets of the Company and its Restricted Subsidiaries, less goodwill and other indefinite life intangibles and intangible assets, in each case as set forth on the Company’s most recent consolidated balance sheet. For purposes of calculating an amount pursuant to the Indenture which is determined as a percentage of Total Tangible Assets of the Company, such amount will be the U.S. dollar equivalent of such amount based on the noon buying rate as of the date of the most recent balance sheet used to calculate the percentage of Total Tangible Assets, and if such day is not a Business Day, the next succeeding Business Day.

“Transactions” means the transactions described under “The Transactions” in this prospectus to the extent contemplated hereby.

“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two Business Days prior to such Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such Redemption Date to December 15, 2008; provided, however, that if the period from such Redemption Date to December 15, 2008 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

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“Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

(3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described under the caption “Certain Covenants—Restricted Payments.” If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption “Incurrence of Indebtedness and Issuance of Preferred Stock,” the Company shall be in default of such covenant. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption “Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2) the then outstanding principal amount of such Indebtedness.

“Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of such Person, all of the outstanding Capital Stock or other ownership interests of which (other than (x) directors’ qualifying shares, (y) shares issued to foreign nationals to the extent required by applicable law and (z) Capital Stock or other ownership interests issued to a Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company in connection with a Permitted Securitization Transaction for the purpose of establishing independence and not in order to provide substantive economic or controlling voting interests to such Person) shall at the time be owned by such Person and/or by one or more Wholly Owned Restricted Subsidiaries of such Person.

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DESCRIPTION OF OTHER FINANCING ARRANGEMENTS

Floorplan Financing

We have agreements with various finance companies to provide floorplan financing to our dealers in North America, Australia and New Zealand to facilitate their purchase of our products. These agreements improve our liquidity by financing dealer purchases of products without requiring substantial use of our working capital. A significant percentage of our sales of snowmobiles, sport boats, personal watercraft, ATVs and outboard engines to dealers in North America are financed under such arrangements.

Generally, our floorplan financing arrangements work as follows: after conducting a credit review of a dealer, the financing company establishes a line of credit for such dealer on terms that we have helped to arrange. We may then begin to ship products to the dealer, up to the available credit line of the dealer and simultaneously delivering a copy of the dealer’s invoice to the financing company, which then pays us for the product on behalf of the dealer. As a sales incentive, we generally provide a “free floorplanning” period to our dealers during which we pay interest to the financing company for a limited period of time and thereafter, the dealer assumes responsibility for interest payments to the financing company.

The total amount of floorplan financing provided to dealers in North America, Australia and New Zealand during the combined year ended January 31, 2004, and the years ended January 31, 2003 and 2002 was $1.4 billion, $1.5 billion and $1.3 billion, respectively. The amount outstanding as of January 31, 2004, 2003 and 2002 was $760.4, $959.1 million and $702.8 million, respectively. Our portion of financing charges under the free floorplanning programs described above for the combined year ended January 31, 2004, and the years ended January 31, 2003 and 2002 was $29.2 million, $26.3 million and $25.6 million, respectively.

Bombardier Capital

Bombardier Capital has traditionally provided a significant portion of our North American floorplan financing. In connection with the Transactions, we amended and restated these agreements, which include one with respect to Canadian dealers and one with respect to U.S. dealers, each on substantially similar terms as set forth below.

Our floorplan financing arrangements with Bombardier Capital provide for aggregate financing up to a maximum of U.S.$750.0 million. The amount outstanding under these facilities as of January 31, 2004 was $740.8 million.

Interest. The rate we pay during the “free floorplanning” period is based on the prime rate plus a spread that varies by product. While the exclusivity agreement described below remains effective, Bombardier Capital will not raise the applicable spread with respect to any product without our consent.

Payment. Bombardier Capital will fund 100% of the dealer’s invoice cost directly to us. At our option, Bombardier Capital will either pay us on the last business day of each month for all invoices received during such month or will pay us one business day after its receipt of each invoice. In the event we choose the latter option, we will compensate Bombardier Capital for its additional financing costs on a monthly basis. Historically, we have been paid on a monthly basis, but we have elected to switch to the one business day option effective upon the closing of the Transactions.

Repurchase Obligations/Cap. In the event of a dealer default, we are obligated to repurchase new and unused products and products under an authorized demonstration or rental program if such products are repossessed by Bombardier Capital. The purchase price with respect to these repurchases is generally the unpaid balance on the original invoice.

Over the past three years, the average amount of power sports inventory repossessed was $8.0 million (or 32 bps of total sales). However, this may not continue to be the case. As such, we will cap our repurchase payments

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to Bombardier Capital on an annual basis at an amount equal to the greater of U.S.$25.0 million or 10% of the average amount of financing outstanding under such floorplanning agreements.

We have an option to limit our repurchase obligations to products returned during the two-year period after any product is shipped to a dealer. If we exercise the option, we expect that Bombardier Capital will simultaneously require dealers to begin repaying on a monthly basis some portion of the outstanding amount on a given product six months before our repurchase obligation expires. Currently, we do not impose a time limit and a matching curtailment program, but we may do so in the future.

Term. Our floorplan financing agreements with Bombardier Capital are terminable by either party on 180 days notice.

Exclusivity. In connection with the Transactions, we entered into a five-year mutual exclusivity arrangement with Bombardier Capital with respect to our North American floorplan financing. If we or Bombardier Capital breach this exclusivity arrangement or terminate the arrangement without cause, the breaching party will be liable for penalties equal to $12 million per year for the remainder of the exclusivity period.

Other Floorplan Arrangements

We also have floorplanning arrangements in place with Transamerica Commercial Finance Corporation and General Electric Commercial Distribution Finance to finance sales of outboard engines to dealers in North America and with GE Commercial Corporation (Australia) Pty Ltd to finance sales of outboard engines, personal watercraft and ATVs in Australia and New Zealand. The aggregate amount outstanding under these facilities as of January 31, 2004 was $19.6 million. Generally, the financial terms of these agreements are renegotiated annually.

Under the General Electric facilities for North America, General Electric must pay us within 15 days of receipt of an invoice. We are permitted to offer our dealers a free floorplanning period at our discretion. We are obligated to purchase new and unused products for the unpaid principal amount if repossessed within 12 months of delivery and for 85% of the unpaid principal amount if repossessed after 12 months but within 18 months of delivery. Our repurchase obligation in any one year under each facility is capped at the greater of $10.0 million and 12.5% of the average aggregate outstanding debt under the arrangement during such year. These facilities are terminable by either party on 30 days notice.

Under the Transamerica facilities, Transamerica must pay us within 20 days of receipt of an invoice. We are permitted to offer a free floorplanning period at our discretion. We are obligated to purchase new and unused products for the unpaid principal amount if repossessed within 18 months of delivery and for 85% of the unpaid principal amount if repossessed after 18 months but within 24 months of delivery. There is no annual cap on our repurchase obligation. These arrangements are terminable by either party on 30 days notice.

Under the General Electric facility for Australia and New Zealand, General Electric must pay us within 10 days of receipt of an invoice. We are permitted to offer our dealers several different free floorplan financing periods (depending on the interest rate charged). We are obligated to purchase new and unused products for the unpaid balance if repossessed within 12 months of delivery. The facility is terminable by either party on twelve months notice.

Receivables Factoring Programs

We have agreements in place with various finance companies, including Bombardier Capital, to provide receivables factoring as part of our plan to manage working capital. These factoring programs generally relate to receivables from sales of products for which floorplan financing is not available. Under these agreements, we typically receive the face value of the receivable less some negotiated discount. In some cases, we pay interest on

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behalf of the dealer to the financing source. In certain circumstances, we are required to repurchase receivables sold to the financing company for an amount equal to the total amount owed by the applicable customer. Each of our factoring agreements is typically terminable, by either party, upon short notice.

The total amount of receivables factoring worldwide during the combined year ended January 31, 2004, and the years ended January 31, 2003 and 2002, was $846.4, $705.1 million and $502.1 million, respectively. The amount outstanding as of January 31, 2004, 2003 and 2002 was $218.7, $210.6 million and $134.3 million, respectively. Related financing charges for the combined year ended January 31, 2004, and the years ended January 31, 2003 and 2002 were $6.3, $7.5 million and $8.3 million, respectively.

In addition, in connection with the Transactions, with respect to receivables originated in North America and not eligible for floorplan financing (primarily receivables from sales of utility vehicles to customers other than dealers, sales of outboard engines to original equipment manufacturers, and sales of ATVs to Deere & Company) and receivables originated in Scandinavia, we put in place a new 18-month factoring facility with Bombardier Capital for approximately U.S.$115.0 million of financing to replace an existing securitization facility for North American receivables and an existing Scandinavian factoring facility. We set up a bankruptcy-remote subsidiary to which we and certain of our subsidiaries will sell receivables originating in the United States, Canada and Scandinavia. The subsidiary then sells those receivables to Bombardier Capital for cash at an advance rate to be determined by the parties and for deferred compensation, to be paid upon collection of the receivables owed by the obligors.

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BOOK-ENTRY, DELIVERY AND FORM

The exchange notes will be issued in the form of one or more fully registered notes in global form, referred to herein as global notes. Ownership of beneficial interests in a global note will be limited to persons who have accounts with the Depository Trust Company, or DTC, such persons being referred to herein as DTC participants, or persons who hold interests through participants. Ownership of beneficial interests in a global note will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee, with respect to interests of participants, and the records of DTC participants, with respect to interests of persons other than participants.

So long as DTC, or its nominee, is the registered owner or holder of a global note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the notes represented by such global note for all purposes under the indenture and the exchange notes. No beneficial owner of an interest in a global note will be able to transfer that interest except in accordance with DTC’s applicable procedures, in addition to those provided for under the indenture.

Payments of the principal of, and interest on, a global note will be made to DTC or its nominee, as the case may be, as the registered owner thereof. None of the Company, the trustee under the indenture governing the notes or any other paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a global note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

We expect that DTC or its nominee, upon receipt of any payment of principal or interest in respect of a global note, will credit the DTC participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global note as shown on the records of DTC or its nominee. We also expect that payments by DTC participants to owners of beneficial interests in such global note held through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such DTC participants.

Transfers between DTC participants will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds.

We expect that DTC will take any action permitted to be taken by a holder of exchange notes, including the presentation of exchange notes for exchange as described below, only at the direction of one or more participants to whose account the DTC interests in a global note is credited and only in respect of such portion of the aggregate principal amount of exchange notes as to which such DTC participant or participants has or have given such direction. However, if there is an event of default under the notes, DTC will exchange the applicable global note for certificated notes, which it will distribute to its participants.

We understand that: DTC is a limited purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between DTC participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Indirect access to the DTC system is available to others, referred to herein as indirect participants, such as banks, brokers, dealers and trust companies and certain other organizations that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

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Although DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in a global note among DTC participants, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the trustee under the indenture governing the notes will have any responsibility for the performance by DTC or its respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

If DTC is at any time unwilling or unable to continue as a depositary for the global notes and a successor depositary is not appointed by us within 90 days, we will issue certificated notes in exchange for the global notes. Holders of an interest in a global note may receive certificated notes in accordance with the DTC’s rules and procedures in addition to those provided for under the indenture governing the notes.

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MATERIAL TAX CONSIDERATIONS

U.S. Federal Income Tax Considerations

In General

The following discussion is a summary of the material U.S. federal income tax consequences relevant to the exchange of the old notes pursuant to the exchange offer and the ownership and disposition of the notes, but does not purport to be a complete analysis of all potential tax effects. The discussion is based upon the U.S. Internal Revenue Code of 1986, as amended, or the Code, U.S. Treasury Regulations issued thereunder, Internal Revenue Service rulings and pronouncements and judicial decisions now in effect, all of which are subject to change at any time. Any such change may be applied retroactively in a manner that could adversely affect a holder of the notes and the continued validity of this summary. This discussion does not address all of the U.S. federal income tax consequences that may be relevant to a holder in light of such holder’s particular circumstances or to holders subject to special rules, such as certain financial institutions, U.S. expatriates, insurance companies, dealers in securities or currencies, traders in securities, holders whose functional currency is not the U.S. dollar, tax-exempt organizations and persons holding the notes as part of a “straddle,” “hedge,” conversion transaction within the meaning of Section 1258 of the Code or other integrated transaction within the meaning of Section 1.1275-6 of the U.S. Treasury Regulations. In addition, this discussion is limited to persons purchasing the notes for cash at original issue and at their “issue price” within the meaning of Section 1273 of the Code, in other words, the first price at which a substantial amount of notes are sold to the public for cash. Moreover, the effect of any applicable state, local or foreign tax laws is not discussed. The discussion deals only with notes held as “capital assets” within the meaning of Section 1221 of the Code.

As used herein, “United States Holder” means a beneficial owner of the notes who or that is:

• an individual that is a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the “substantial presence” test under Section 7701(b) of the Code,

• a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or any state thereof or the District of Columbia,

• an estate, the income of which is subject to U.S. federal income tax regardless of its source, or

• a trust, if a U.S. court can exercise primary supervision over the administration of the trust and one or more United States persons can control all substantial trust decisions, or, if the trust was in existence on August 20, 1996, was treated as a United States person prior to such date and has elected to continue to be treated as a United States person.

We have not sought and will not seek any rulings from the Internal Revenue Service, or the IRS, with respect to the matters discussed below. There can be no assurance that the IRS will not take a different position concerning the tax consequences of the exchange of the old notes pursuant to the exchange offer or the ownership or disposition of the notes or that any such position would not be sustained.

If a partnership or other entity taxable as a partnership holds the notes, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Such partner should consult its tax advisors as to the tax consequences of the partnership owning and disposing of the notes.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE TAX CONSEQUENCES DISCUSSED BELOW TO THEIR PARTICULAR SITUATIONS AS WELL AS THE APPLICATION OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS.

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The Exchange

The exchange of the old notes for the exchange notes in the exchange offer will not be treated as an “exchange” for U.S. federal income tax purposes, because the exchange notes will not be considered to differ materially in kind or extent from the old notes. Accordingly, the exchange of old notes for exchange notes will not be a taxable event to holders for U.S. federal income tax purposes. Moreover, the exchange notes will have the same tax attributes as the old notes and the same tax consequences to holders as the old notes have to holders, including without limitation, the same issue price, adjusted issue price, adjusted tax basis and holding period. All references to “notes” herein apply equally to the exchange notes and the old notes.

United States Holders

Interest

Payments of stated interest on the notes generally will be taxable to a United States Holder as ordinary income at the time that such payments are received or accrued, in accordance with such United States Holder’s method of tax accounting. In certain circumstances we may be obligated to pay amounts in excess of stated interest or principal on the notes. According to U.S. Treasury Regulations, the possibility that any such payments in excess of stated interest or principal will be made will not affect the amount of interest income a United States Holder recognizes if there is only a remote chance as of the date the notes were issued that such payments will be made. We believe that the likelihood that we will be obligated to make any such payments is remote. Therefore, we do not intend to treat the potential payment of additional interest pursuant to the registration rights provisions or the potential payment of a premium pursuant to the optional redemption or change of control provisions as part of the yield to maturity of any notes. Our determination that these contingencies are remote is binding on a United States Holder unless such holder discloses its contrary position in the manner required by applicable U.S. Treasury Regulations. Our determination is not, however, binding on the IRS and if the IRS were to challenge this determination, a United States Holder might be required to accrue income on its notes in excess of stated interest and to treat as ordinary income rather than capital gain any income realized on the taxable disposition of a note before the resolution of the contingencies. In the event a contingency occurs, it would affect the amount and timing of the income recognized by a United States Holder. If we pay additional interest on the notes pursuant to the registration rights provisions or a premium pursuant to the optional redemption or change of control provisions, United States Holders will be required to recognize such amounts as income.

Market Discount

If a United States Holder acquires a note at a cost that is less than its principal amount, the amount of such difference is treated as “market discount” for federal income tax purposes, unless such difference is less than .0025 multiplied by its principal amount multiplied by the number of complete years from the date of acquisition until maturity.

Under the market discount rules of the Code, a United States Holder is required to treat any gain on the disposition of a note as ordinary income to the extent of the accrued market discount that has not been previously included in income. Thus, principal payments and payments received upon the disposition of a note are treated as ordinary income to the extent of accrued market discount that has not been previously included in income. If a United States Holder disposes of a note with market discount in certain otherwise nontaxable transactions, such holder may be required to include accrued market discount as ordinary income as if the holder had sold the note at its then fair market value.

In general, the amount of market discount that has accrued is determined on a ratable basis. A United States Holder may, however, elect to determine the amount of accrued market discount on the basis of a constant interest rate. This election is made on a note-by-note basis and is irrevocable.

With respect to market discount notes, a United States Holder may not be allowed to deduct a portion of the interest expense on any indebtedness incurred to purchase or to carry the notes. A United States Holder may elect

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to include market discount in income currently as it accrues, in which case the interest deferral rule set forth in the preceding sentence will not apply. This election will apply to all market discount debt instruments that a United States Holder acquires on or after the first day of the first taxable year to which the election applies and all market discount notes in subsequent years and is irrevocable without the consent of the IRS.

Amortizable Bond Premium

In general, if a United States Holder purchases a note for an amount in excess of the sum of all amounts payable on the note after the acquisition date, other than stated interest payments, such excess will constitute amortizable bond premium. A United States Holder generally may elect to amortize the premium over the remaining term of the note on a constant yield method as an offset to interest when includible in income under such holder’s regular accounting method. The notes are subject to call provisions at our option at various times, as described in this prospectus under “Description of the Exchange Notes—Optional Redemption”. A United States Holder will calculate the amount of amortizable bond premium based on the amount payable at the applicable call date, but only if the use of the call date, in lieu of the stated maturity date, maximizes such holder’s yield on the notes. If a United States Holder does not elect to amortize bond premium, that premium will decrease the gain or increase the loss such holder would otherwise recognize on disposition of the note. An election to amortize premium on a constant yield method will also apply to all debt obligations held or subsequently acquired by the electing United States Holder on or after the first day of the first taxable year to which the election applies. The election may not be revoked without the consent of the IRS. United States Holders should consult their own tax advisors before making this election.

Sale or Other Taxable Disposition of the Notes

A United States Holder will recognize gain or loss on the sale, exchange, other than for exchange notes pursuant to the exchange offer, as discussed above, or a tax-free transaction, redemption, retirement or other taxable disposition of a note equal to the difference between the amount realized upon the disposition, less a portion allocable to any accrued and unpaid interest, which will be taxable as ordinary income if not previously included in such holder’s income, and the United States Holder’s adjusted tax basis in the note. A United States Holder’s adjusted basis in a note generally will be the United States Holder’s cost therefor, less any principal payments received by such holder and by the amount of amortizable bond premium, if any, taken into account in respect of the note, and increased by the amount of market discount, if any, previously including in income in respect of the note. This gain or loss generally will be a capital gain or loss, except as described under “Market Discount” above, and will be a long-term capital gain or loss if the United States Holder has held the note for more than one year. Otherwise, such gain or loss will be a short-term capital gain or loss.

Backup Withholding

A United States Holder may be subject to a backup withholding tax of up to 30% upon the receipt of interest and principal payments on the notes or upon the receipt of proceeds upon the sale or other disposition of such notes. Certain holders, including, among others, corporations and certain tax-exempt organizations, are generally not subject to backup withholding. A United States Holder will be subject to this backup withholding tax if such holder is not otherwise exempt and such holder:

• fails to furnish its taxpayer identification number, or TIN, which, for an individual, is ordinarily his or her social security number,

• furnishes an incorrect TIN,

• is notified by the IRS that it has failed to properly report payments of interest or dividends, or

• fails to certify, under penalties of perjury, that it has furnished a correct TIN and that the IRS has not notified the United States Holder that it is subject to backup withholding.

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United States Holders should consult their personal tax advisor regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption, if applicable. The backup withholding tax is not an additional tax and taxpayers may use amounts withheld as a credit against their U.S. federal income tax liability or may claim a refund as long as they timely provide certain information to the IRS.

Non-United States Holders

Definition of Non-United States Holders

A non-United States Holder is a beneficial owner of the notes who is not a United States Holder.

Interest Payments

Interest paid to a non-United States Holder will not be subject to U.S. federal withholding tax of 30%, or, if applicable, a lower treaty rate, provided that:

• such holder does not directly or indirectly, actually or constructively, own 10% or more of the total combined voting power of all of our classes of stock,

• such holder is not a controlled foreign corporation that is related to us through stock ownership,

• such holder is not a bank that received such notes on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, and

• either:

(1) the non-United States Holder certifies in a statement provided to us or our paying agent, under penalties of perjury, that it is not a “United States person” within the meaning of the Code and provides its name and address, generally on IRS Form W-8 BEN, or

(2) a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and holds the notes on behalf of the non-United States Holder certifies to us or our paying agent under penalties of perjury that it has received from the non-United States Holder a statement, under penalties of perjury, that such holder is not a “United States person” and provides us or our paying agent with a copy of such statement or

(3) the non-United States Holder holds its notes through a “qualified intermediary” and certain conditions are satisfied.

Even if the above conditions are not met, a non-United States Holder may be entitled to a reduction in, or exemption from, withholding tax on interest under a tax treaty between the United States and the non-United States Holder’s country of residence. To claim a reduction or exemption under a tax treaty, a non-United States Holder must generally complete IRS Form W-8 BEN and claim the reduction or exemption on the form. In some cases, a non-United States Holder may instead be permitted to provide documentary evidence of its claim to the intermediary, or a qualified intermediary may have some or all of the necessary evidence in its files.

The certification requirements described above may require a non-United States Holder that provides an IRS form, or that claims the benefit of an income tax treaty, to also provide its U.S. taxpayer identification number.

Prospective investors should consult their tax advisors regarding the certification requirements for non-United States persons.

Sale or Other Taxable Disposition of the Notes

A non-United States Holder will not generally be subject to U.S. federal income tax or withholding tax on gain recognized on the sale, exchange, redemption, retirement or other disposition of a note. However, a non-United States Holder may be subject to tax on such gain if the gain is effectively connected to a U.S. trade or

146

business or, if an income tax treaty applies, attributable to a U.S. permanent establishment, as described below, or if such holder is an individual who was present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met, in which case such holder may have to pay a U.S. federal income tax of 30%, or, if applicable, a lower treaty rate, on such gain.

United States Trade or Business

If interest or gain from a disposition of the notes is effectively connected with a non-United States Holder’s conduct of a U.S. trade or business, or if an income tax treaty applies and the non-United States Holder maintains a U.S. “permanent establishment” to which the interest or gain is generally attributable, the non-United States Holder may be subject to U.S. federal income tax on the interest or gain on a net basis in the same manner as if it were a United States Holder. If interest income received with respect to the notes is taxable on a net basis, the 30% withholding tax described above will not apply, assuming an appropriate certification is provided. A foreign corporation that is a holder of a note also may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits for the taxable year, subject to certain adjustments, unless it qualifies for a lower rate under an applicable income tax treaty. A non-United States Holder will not be considered to be engaged in a U.S. trade or business solely by reason of holding notes.

Backup Withholding and Information Reporting

Backup withholding will likely not apply to payments made by us or our paying agents, in their capacities as such, to a non-United States Holder of a note if the holder has provided the required certification that it is not a United States person as described above. However, certain information reporting may still apply with respect to interest payments even if certification is provided. Payments of the proceeds from a disposition by a non-United States Holder of a note made to or through a foreign office of a broker will not be subject to information reporting or backup withholding, except that information reporting, but generally not backup withholding, may apply to those payments if the broker is:

• a United States person,

• a controlled foreign corporation for U.S. federal income tax purposes,

• a foreign person 50% or more of whose gross income is effectively connected with a U.S. trade or business for a specified three-year period, or

• a foreign partnership, if at any time during its tax year, one or more of its partners are United States persons, as defined in Treasury Regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership or if, at any time during its tax year, the foreign partnership is engaged in a U.S. trade or business.

Payment of the proceeds from a disposition by a non-United States Holder of a note made to or through the U.S. office of a broker is generally subject to information reporting and backup withholding unless the holder or beneficial owner has provided the required certification that it is not a United States person as described above.

Non-United States Holders should consult their own tax advisors regarding application of withholding and backup withholding in their particular circumstance and the availability of and procedure for obtaining an exemption from withholding and backup withholding under current U.S. Treasury Regulations. In this regard, the current U.S. Treasury Regulations provide that a certification may not be relied on if we or our agent, or other payor, knows or has reasons to know that the certification may be false. Any amounts withheld under the backup withholding rules from a payment to a non-United States Holder will be allowed as a credit against the holder’s U.S. federal income tax liability or may be claimed as a refund, provided the required information is furnished timely to the IRS.

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Canadian Federal Income Tax Considerations

The following is a summary of the principal Canadian federal income tax considerations generally applicable to you if you are a U.S. Holder who purchases notes pursuant to the offering of the notes and, for the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”), and at all relevant times, you are not and are not deemed to be resident in Canada, you hold debentures as capital property, you deal at arm’s length with us, and you do not use or hold and are not deemed or considered to use or hold the notes (or the exchange notes, as the case may be) in carrying on business in Canada. Special rules which are not discussed in this summary may apply to you if you are an insurer that carries on an insurance business in Canada and elsewhere.

This summary is based on the current provisions of the Canadian Tax Act and the regulations thereunder (the “Regulations”), in force on the date hereof, all specific proposals to amend the Canadian Tax Act and the Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and our understanding of the current published administrative practices of the Canada Customs and Revenue Agency. This summary does not take into account or anticipate any other changes in law or administrative practice, whether by legislative, governmental, administrative or judicial decision or action and does not take into account provincial, territorial or foreign income tax legislation or considerations which may vary from the Canadian federal income tax considerations described herein.

This summary is of a general nature only and is not intended to be, nor should it be interpreted as, legal or tax advice to you, and no representation is made with respect to the Canadian income tax consequences to any particular person acquiring notes. You should therefore consult your own tax advisor with respect to the Canadian tax considerations relevant to you and your particular circumstances.

Under the Canadian Tax Act, payments by us to you of principal, interest and premium, if any, on the notes (or the exchange notes) will be exempt from Canadian withholding tax. No other taxes on income (including taxable capital gains) will be payable by you under the Canadian Tax Act solely as a consequence of your ownership, acquisition or disposition of notes (or the exchange notes).

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PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer which requests it in the letter of transmittal, for use in any such resale.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver, and by delivering, a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the old notes, including any broker-dealers, against certain types of liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

Certain legal matters in connection with the exchange offer will be passed upon for us by Ropes & Gray LLP, Boston, Massachusetts.

INDEPENDENT AUDITORS

The audited balance sheets of Bombardier Recreational Products (a reportable segment of Bombardier Inc.) as at December 18, 2003 and January 31, 2003 and the statements of operations, changes in Bombardier Inc.’s net investments and cash flows for the 321-day period ended December 18, 2003 and for each of the years in the two year period ended January 31, 2003, and the audited consolidated balance sheet of Bombardier Recreational Products Inc. as at January 31, 2004 and the consolidated statements of operations, shareholders equity and cash flows for the 44-day period ended January 31, 2004, included in this prospectus have been audited by Ernst & Young LLP, Chartered Accountants, as stated in their report appearing in this prospectus.

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AVAILABLE INFORMATION

This prospectus forms a part of a registration statement that we filed with the SEC on Form F-4 under the Securities Act in connection with the offering of the exchange notes. This prospectus does not contain all the information contained in the registration statement, including its exhibits and schedules. You should refer to the registration statement, including the exhibits and schedules, for further information about us and the exchange notes. The registration statement, including exhibits and schedules, is on file at the offices of the SEC and may be inspected without charge.

Under the terms of the indenture that governs the notes, we have agreed that, whether or not required by the rules and regulations of the SEC, so long as any old notes or exchange notes are outstanding, we will furnish to the trustee and the holders of the old notes or exchange notes (i) all financial information that would be required to be contained in a filing with the SEC on Forms 20-F and 6-K, if we were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes our financial condition and results of operations and those of our consolidated subsidiaries and, with respect to the annual information only, a report thereon by our independent auditors and (ii) all current reports that would be required to be filed with the SEC on Form 6-K if we were required to file such reports. In addition, whether or not required by the rules and regulations of the SEC, we will file a copy of all such information and reports with the SEC for public availability, unless the SEC will not accept such a filing and make such information available to securities analysts and prospective investors upon request. In addition, we have agreed that, for so long as any old notes or exchange notes remain outstanding, we will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Upon effectiveness of the registration statement of which this prospectus is a part, we will become subject to the periodic reporting and to the informational requirements of the Exchange Act and will file information with the SEC, including annual, quarterly and current reports. You may read and copy any document we file with the SEC at the SEC’s public reference room at the following address:

Public Reference Room

450 Fifth Street, N. W.

Room 1024

Washington, D. C. 20549

Please call the SEC at 1-800-SEC-0330 for further information on the operations of the public reference rooms.

Our SEC filings are also available at the SEC’s web site at http://www.sec.gov. You can also obtain a copy of any of our filings, at no cost, by writing to or telephoning us at the following address:

Bombardier Recreational Products Inc.

1061 Parent Street

Saint-Bruno, Québec

Canada J3V 6P1

Telephone: (450) 461-7706

Fax: (450) 461-7700

To ensure timely delivery, please make your request as soon as practicable and, in any event, no later than five business days prior to the expiration of the exchange offer.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Interim Consolidated Financial Statements of Bombardier Recreational Products Inc.
Interim Consolidated Balance Sheet as of April 30, 2004 and January 31, 2004	F-2
Interim Consolidated Statement of Operations for the three-month periods ended April 30, 2004 and 2003	F-3
Interim Consolidated Statement of Cash Flows for the three-month periods ended April 30, 2004 and 2003	F-4
Interim Consolidated Statement of Deficit for the three-month periods ended April 30, 2004	F-5
Notes to Interim Consolidated Financial Statements	F-6
Audited Consolidated Financial Statements of Bombardier Recreational Products Inc.
Auditor’s Report	F-31
Consolidated Balance Sheet as of January 31, 2004	F-32
Consolidated Statement of Operations for the 44-day period ended January 31, 2004	F-33
Consolidated Statement of Cash Flows for the 44-day period ended January 31, 2004	F-34
Consolidated Statement of Deficit for the 44-day period ended January 31, 2004	F-35
Notes to Consolidated Financial Statements	F-36
Audited Financial Statements of Bombardier Recreational Products, a Reportable Segment of Bombardier Inc.
Auditor’s Report	F-73
Balance Sheets as of December 18, 2003 and January 31, 2003	F-74
Statements of Operations for the 321-day period ended December 18, 2003 and the years ended January 31, 2003 and 2002	F-75
Statements of Cash Flows for the 321-day period ended December 18, 2003 and the years ended January 31, 2003 and 2002	F-76
Statements of Changes in Bombardier Inc.’s Net Investment for the 321-day period ended December 18, 2003 and the years ended January 31, 2003 and 2002	F-77
Notes to Financial Statements	F-78

F-1

Bombardier Recreational Products Inc.

INTERIM CONSOLIDATED BALANCE SHEETS

[Unaudited]

As at

[millions of Canadian dollars]

	Notes	April 30, 2004			January 31, 2004
ASSETS
Current assets
Cash		$	152.5		$	196.2
Receivables, net of allowance for doubtful accounts of $8.4 [January 31, 2004 – $4.3]			140.0			153.4
Inventories	5		378.4			351.8
Prepaid expenses			14.1			19.2
Deferred income taxes			76.5			69.7
Other current assets			75.8			93.1
Total current assets			837.3			883.4
Property, plant and equipment	6		485.0			497.9
Goodwill			90.8			92.5
Trademarks			151.1			151.1
Other intangible assets			87.5			90.7
Deferred income taxes			22.7			15.5
Other long-term assets, including restricted investments of $12.6 [January 31, 2004 – $12.6]	7		61.7			64.5
		$	1,736.1		$	1,795.6
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	8	$	587.9		$	640.3
Income taxes payable			10.6			9.0
Current portion of long-term debt			5.2			5.0
Other current liabilities			2.6			3.5
Deferred income taxes			—			0.3
Total current liabilities			606.3			658.1
Long-term debt			656.2			635.0
Deferred income taxes			16.0			17.5
Employee future benefits liability			124.7			121.9
Other long-term liabilities	14		28.4			30.9
Redeemable preferred shares			44.2			43.2
Total liabilities			1,475.8			1,506.6
Shareholder’s equity
Share capital	10		311.0			304.5
Contributed surplus	10		0.7			—
Deficit			(53.2	)		(17.5	)
Currency translation adjustment			1.8			2.0
		$	1,736.1		$	1,795.6
Contingencies	18

The accompanying notes are an integral part of these Interim Consolidated Financial Statements.

F-2

Bombardier Recreational Products Inc.

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

[Unaudited]

For the three-month periods ended April 30,

[millions of Canadian dollars]

	Notes	2004			2003
					[see note 2]
Revenues	4	$	630.9		$	515.8
Cost of sales	4		540.8			433.2
Gross profit			90.1			82.6
Operating expenses
Selling and marketing			40.5			45.4
Research and development	16		30.4			29.4
General and administrative			31.3			32.1
Total operating expenses			102.2			106.9
Operating loss			(12.1	)		(24.3	)
Interest expense and other	11		12.2			1.0
Accretion in carrying value of redeemable preferred shares			1.0			—
Unrealized foreign exchange loss on long-term debt			21.2			—
Loss before income taxes			(46.5	)		(25.3	)
Income tax recovery	12		10.8			8.8
Net loss		$	(35.7	)	$	(16.5	)

The accompanying notes are an integral part of these Interim Consolidated Financial Statements.

F-3

Bombardier Recreational Products Inc.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

[Unaudited]

For the three-month periods ended April 30,

[millions of Canadian dollars]

	Notes	2004			2003
					[see note 2]
OPERATING ACTIVITIES
Net loss		$	(35.7	)	$	(16.5	)
Non-cash items:
Depreciation and amortization			30.3			26.5
Amortization of deferred financing costs			1.6			—
Employee stock compensation			0.7			—
Deferred income taxes			(15.1	)		1.5
Gain on disposal of other assets			—			(2.6	)
Accretion in carrying value of redeemable preferred shares			1.0			—
Unrealized foreign exchange loss on long-term debt			21.2			—
Net changes in non-cash working capital balances related to operations	13		(33.2	)		(158.9	)
Cash flows from operating activities			(29.2	)		(150.0	)
INVESTING ACTIVITIES
Additions to property, plant and equipment			(8.7	)		(17.0	)
Proceeds on disposal of other assets			—			4.5
Business acquisition			(6.4	)		—
Other long-term assets			—			(1.5	)
Cash flows from investing activities			(15.1	)		(14.0	)
FINANCING ACTIVITIES
Increase in stated capital			6.5			—
Net variation in advances (to) from related parties			—			23.8
Net contribution by Bombardier Inc.			—			129.0
Other liabilities			(2.7	)		(2.8	)
Cash flows from financing activities			3.8			150.0
Effect of exchange rate changes on cash			(3.2	)		4.5
Net increase (decrease) in cash			(43.7	)		(9.5	)
Cash at beginning of period			196.2			28.7
Cash at end of period		$	152.5		$	19.2
Supplemental information
Cash paid for:
Interest		$	2.0		$	1.0
Income taxes		$	5.2		$	1.0

The accompanying notes are an integral part of these Interim Consolidated Financial Statements.

F-4

Bombardier Recreational Products Inc.

INTERIM CONSOLIDATED STATEMENT OF DEFICIT

[Unaudited]

For the three-month periods ended April 30,

[millions of Canadian dollars]

	2004
	[see note 2]
Balance at beginning of period	$	(17.5	)
Net loss		(35.7	)
Balance at end of period	$	(53.2	)

The accompanying notes are an integral part of these Interim Consolidated Financial Statements.

F-5

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003 [Tabular figures in millions of Canadian dollars, except for share amounts]

1.    NATURE OF OPERATIONS

Bombardier Recreational Products Inc. (“BRP”), is a wholly owned subsidiary of J. A. Bombardier Inc. (“J.A.B.”) and was incorporated under the laws of Canada. BRP is owned through J.A.B. by Bain Capital Luxembourg Investments S. ar. L (50%), La Caisse de Dépôt et Placement du Québec (15%) and Beaudier Inc., Jadier International Inc., Gestion J.I.C.A. Inc., Fonds Achbée Inc. collectively (“Beaudier group”) (35%), collectively (the “Sponsors”). BRP and its subsidiaries, collectively (the “Company”), through its Power Sports, Marine Engines and Utility Vehicles Segments, develops, manufactures and sells snowmobiles, watercrafts, all-terrain vehicles, outboard engines, sport boats, recreational and small aircraft engines, snow-grooming equipment and multi-purpose tracked vehicles (the “recreational products business”). The Company’s products are sold mainly through an international network of independent dealers, distributors and original equipment manufacturers. The Company manufactures its products primarily in North America and certain European countries.

On December 18, 2003, the Company acquired the recreational products business from Bombardier Inc. Prior to December 18, 2003, the recreational products business consisted primarily of a division within the Bombardier Inc. group of companies (“Bombardier”).

2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation April 30, 2004

The accompanying unaudited interim consolidated financial statements for the three-month period ended April 30, 2004 include the accounts of BRP and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated on consolidation.

These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) applicable to interim financial statements, and therefore, do not include all of the information and disclosures required by Canadian GAAP for complete financial statements. Accordingly, the accompanying financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the 44-day period ended January 31, 2004. In the opinion of Management, all adjustments necessary for a fair presentation are reflected in the interim consolidated financial statements. Such adjustments are of a normal and recurring nature. The interim consolidated financial statements follow the same accounting policies and methods in their application as the most recent annual consolidated financial statements, except for the following:

Deferred production costs

Manufacturing cost variances that are planned and are expected to be absorbed by the end of the annual period are deferred at interim reporting dates and included in inventory.

The results of operations for the interim periods are not necessarily indicative of the results of operations for the full fiscal year, as the Company has historically realized higher sales of snowmobiles in the third and fourth quarters of the fiscal year, higher sales of personal watercraft in the first and second quarters of the fiscal year and higher sales of utility vehicles in the third and fourth quarters of the fiscal year.

F-6

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

2.    SIGNIFICANT ACCOUNTING POLICIES (continued)

As further described in note 19, these accounting principles differ in certain respects from those that would have been followed had these interim consolidated financial statements been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to interim consolidated financial statements and the related rules and regulations adopted by the United States Securities and Exchange Commission (“SEC”).

Basis of presentation April 30, 2003

The comparative figures presented for the three-month period ended April 30, 2003 represent the results of operations and cash flows of Bombardier’s recreational products business on a carve out basis from Bombardier (the “predecessor business”), and are not necessarily indicative of the results of operations and cash flows that might have occurred had the recreational products business been financed as a stand alone business at that time. As a result of adjustments to the carrying value of assets and liabilities pursuant to the acquisition by the Company of the predecessor business, the results of operations and cash flows for these comparative figures may not be comparable to the three-month period ended April 30, 2004. The comparative interim financial information for the three-month period ended April 30, 2003 has been prepared in accordance with Canadian GAAP applicable to interim financial statements and follow the same accounting policies and methods in their application as the most recent annual financial statements of the predecessor business, except for the following:

Deferred production costs

Manufacturing cost variances that are planned and are expected to be absorbed by the end of the annual period are deferred at interim reporting dates and included in inventory.

For the three-month period ended April 30, 2003, there is no statement of deficit presented as prior to the acquisition of the predecessor business, Bombardier Inc.’s net investment was presented instead of shareholder’s equity.

3.    BUSINESS ACQUISITION

Acquisition of the recreational products business

On December 18, 2003, pursuant to a purchase agreement dated December 2, 2003, the Company purchased Bombardier’s recreational products business for a total consideration of $806.3 million. The net assets acquired are subject to a purchase price adjustment based on initial working capital amounts at closing and indemnification amounts related to income taxes due to Bombardier, which are included in other long-term liabilities. Any subsequent adjustment will result in an adjustment to the purchase price for accounting purposes. The total cost of the purchase was allocated to the assets acquired and liabilities assumed on the basis of their estimated fair values, as determined by preliminary independent valuations, using the purchase method of accounting. The initial valuation of the acquired assets and assumed liabilities could change by material amounts as a result of finalizing the valuations. The significant elements for which the fair values could be modified include intangible assets, goodwill, deferred income taxes, and other liabilities.

F-7

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

4.    RELATED PARTY TRANSACTIONS

The Company is a party to various related party transactions carried out in the normal course of business. In addition to other related party transactions disclosed elsewhere in the interim consolidated financial statements, related party transactions are described below. All transactions are measured at their exchange amount.

a)    Transaction with sponsors

Upon completion of the business acquisition, the Company and J.A.B. entered into a management agreement with affiliates of the sponsors to provide management services. Pursuant to such agreement, affiliates of the Sponsors receive an aggregate annual management fee of U.S.$2.25 million. An amount of $0.8 million was incurred and paid during this period related to this agreement.

b)    Floorplan financing

Bombardier Capital Ltd. and Bombardier Capital Inc. (collectively “BC”), wholly owned subsidiaries of Bombardier, which has significant shareholders in common with the Company, have entered into a retail floorplan inventory financing agreement for retailers of the Company’s products.

The total amount of floorplan financing provided by BC for the three-month period ended April 30, 2004 was $308.1 million [$231.1 million for the three-month period ended April 30, 2003 – see note 2]. Outstanding floorplan financing between the Company’s dealers and BC as at April 30, 2004 was $798.9 million [$740.8 million as at January 31, 2004].

Furthermore, as a sales incentive, the Company generally provides a free floorplanning period to the dealers during which the Company pays interest to BC for a limited period of time. The Company’s portion of the financing charges under the floorplan financing agreement with BC for the three-month period ended April 30, 2004 was $7.2 million [$8.1 million for the three-month period ended April 30, 2003 – see note 2] which is classified as a reduction in revenues.

c)    Sales of receivables

BRP and certain of its subsidiaries, collectively (“the transferors”), entered into a receivable transfer arrangement (“the arrangement”) with Bombardier Capital Inc. (“BCI”) for a maximum of U.S.$115.0 million ($157.6 million), which expires in June 2005. Under this arrangement, BCI funds receivables subject to certain eligibility criteria for the Company’s U.S. and European subsidiaries. Pursuant to the arrangement, receivables are first transferred without recourse to BRP Receivables Funding, LLC (“BRFL”), a special purpose entity (“SPE”), controlled and consolidated by the Company but legally separate and distinct from it. Receivables transferred to BRFL are owned by it and not owned by the transferors of such receivables.

Pursuant to the arrangement, the transferors transfer receivables subject to certain criteria to the SPE for the purpose of legally isolating them from the Company and its creditors. Following the transfer of each receivable to BRFL, this latter will transfer and assign to BC, with recourse, an undivided interest in all of its right, title and interest in the transferred receivables in exchange for consideration comprising cash equal to 85%

F-8

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

4. RELATED PARTY TRANSACTIONS (continued)

of the amount of eligible receivables, an undivided 15% ownership interest in eligible receivables and an undivided 100% ownership interest in ineligible receivables transferred. Carrying values of receivables transferred approximate their fair values due to their short-term nature. In accordance with the arrangement, the transferors will assume certain servicing obligations as well as administration of collection with respect to all receivables transferred.

Certain of the Company’s subsidiaries, not party to the arrangement, transfer receivables directly to BC.

Total receivable transfers to BC during the three-month period ended April 30, 2004 were $119.3 million, [$165.0 for the three-month period ended April 30, 2003 – see note 2] of which $93.7 million were outstanding at April 30, 2004 [$130.1 million as at January 31, 2004]. The loss incurred by the Company in connection with transfers of receivables, which is classified with cost of sales, for the three-month period ended April 30, 2004 was $0.3 million [$0.5 million for the three-month period ended April 30, 2003 – see note 2]. The amount outstanding subject to repurchase as at April 30, 2004 amounted to $12.6 million [$9.4 million as at January 31, 2004].

The balance outstanding of all receivables held by the SPE amounted to $17.7 million as at April 30, 2004 [$18.3 million as at January 31, 2004]. As at April 30, 2004, an amount of $27.0 million [$40.5 million at January 31, 2004], representing the SPE’s retained interest in receivables transferred to BCI pursuant to the arrangement, was accounted for as investments on the Company’s balance sheet and included with other current assets, net of provision for loss of $0.8 million [$0.8 million at January 31, 2004]. Also, an amount of $6.5 million is owed to BCI with respect to collections on receivables transferred to BCI pursuant to the arrangement.

d)    Other

The Company is also renting equipment from BC. Rental expense of $0.5 million [$0.9 million for the three-month period ended April 30, 2003 – see note 2] is included in cost of sales on the consolidated statement of operations.

5.    INVENTORIES

	April 30, 2004		January 31, 2004
Raw materials and work in process	$	120.9	$	123.9
Finished products		159.5		135.1
Parts and accessories		98.0		92.8
	$	378.4	$	351.8

Included in inventories is an amount of $2.9 million [$9.3 million as at January 31, 2004], principally in parts and accessories, related to fair value increments recorded as part of the acquisition.

F-9

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

6.    PROPERTY, PLANT AND EQUIPMENT

Depreciation of property, plant and equipment for the three-month period ended April 30, 2004 was $26.1 million [$25.0 million for the three-month period ended April 30, 2003—see note 2], of which $24.4 million and $1.7 million were included in cost of sales and operating expenses respectively [$22.0 million and $3.0 million respectively for the three-month period ended April 30, 2003—see note 2].

7.    OTHER LONG-TERM ASSETS

The unamortized deferred development costs as at April 30, 2004 were $7.9 million [$9.0 million as at January 31, 2004]. Amortization of development costs for the three-month period ended April 30, 2004 was $1.1 million [$0.7 million for the three-month period ended April 30, 2003].

8.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	April 30, 2004		January 31, 2004
Accounts payable	$	262.5	$	272.5
Accrued liabilities		72.5		81.5
Payroll related liabilities		56.3		59.7
Warranty provision		79.9		78.3
Sales promotions and incentive programs		56.2		56.9
Dealer holdback programs		22.9		30.6
Due to related parties [see notes 3 and 4]		6.5		22.6
Restructuring provision		19.8		24.6
Acquisition costs		5.0		6.4
Derivative financial liabilities		6.3		7.2
	$	587.9	$	640.3

The change in the Company’s accrued warranty provision for the three months ended April 30, 2004 is as follows:

	April 30, 2004
Balance at beginning of period	$	78.3
Expensed during the period		13.0
Change in estimate		0.7
Claims paid during the period		(13.0	)
Effect of foreign currency exchange rate changes		0.9
Balance at end of period	$	79.9

Restructuring Provision

Costs associated with certain restructuring activities related to the acquisition of the predecessor business on December 18, 2003 are recorded as a liability assumed as of the consummation date of the business

F-10

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

8.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (continued)

acquisition and are included in the cost of the acquired business. Below is a summary of the activity related to these restructuring costs recorded for the three-months ended April 30, 2004:

	Employee severance and relocation expenses			Facilities shutdown costs		Total
Balance at January 31, 2004	$	17.6		$	7.0	$	24.6
Accrual utilized during the period		(5.0	)		—		(5.0	)
Effect of foreign currency exchange rate changes		0.2			—		0.2
Balance at April 30, 2004	$	12.8		$	7.0	$	19.8

In connection with the acquisition of the recreational products business on December 18, 2003, management approved and initiated a plan to restructure the recreational products business, and recorded a related accrual of $24.8 million. The acquisition liabilities include incremental costs to terminate approximately 345 employees located in Canada, the U.S. and Austria, and costs to shut down manufacturing facilities, primarily in the Marine Engines segment located in the U.S. and relocate the Company’s head office. While the Company has completed its preliminary assessment of restructuring activities related to the business acquisition, its estimates of costs may be different from those actually incurred. Such differences could include penalties for contract cancellations and closure costs. Any such costs identified within one year of the acquisition date will require an adjustment to the liability and therefore will be recorded as part of the purchase price. Under the current plan, restructuring activities are expected to be completed by June 30, 2005.

9.    CREDIT FACILITY

As of April 30, 2004 the Company had issued letters of credit for an amount of $32.2 million [$54.5 million as at January 31, 2004] under its senior secured credit facilities.

10.    MANAGEMENT SHARE SUBSCRIPTION AGREEMENT AND STOCK OPTION PLAN

On March 31, 2004, the board of directors of J.A.B. approved a management share subscription agreement for directors, officers and certain employees of the Company (the “subscribers”) and a stock option plan for directors, officers and employees (“participants”) of the Company. Under the management share subscription agreement, the subscribers purchased 6,595,180 Class B common shares (the “subscription shares”) of J.A.B. for an amount equal to their fair value. The net proceeds of $6.5 million were then transferred by J.A.B. to the Company, and were accounted for by the Company as an increase in shareholder’s equity. The terms of the management subscription agreement provide J.A.B. with the right to repurchase all or a portion of the subscription shares (a “call option”), and provide the subscribers with a right to sell to J.A.B. all or a portion of their subscription shares (a “put option”), under certain circumstances. The call option and put option expires on the occurrence of an Initial Public Offering (“IPO”) by the Company or upon a change in control.

Also on March 31, 2004, the board of directors of J.A.B. approved a grant of 19,785,540 options. The options are exercisable into Class B common shares of J.A.B. at an exercise price equal to the fair market value

F-11

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

10.    MANAGEMENT SHARE SUBSCRIPTION AGREEMENT AND STOCK OPTION PLAN (continued)

of the Class B shares on the date of grant, and are exercisable for a period of up to 10 years. One-third of the options granted vest in equal annual installments on each of the five anniversary dates of December 18, 2003. The remaining two-thirds become eligible to vest in equal annual installments on each of the five anniversary dates of December 18, 2003, and shall only vest upon certain performance measures being achieved upon either a change in control or an IPO.

The Company records compensation expense using the fair value method, for these grants of stock options by J.A.B. that are expected to vest, over the expected vesting period of the option with a corresponding amount recorded as contributed surplus.

The estimated fair value of these options granted on March 31, 2004, which assumes that all performance measures will likely be achieved, is approximately $10.4 million of which $0.7 million has been recorded as compensation expense during the three months ended April 30, 2004. Fair value is estimated at the grant date based on a Black-Scholes option-pricing model using the following assumptions:

Risk-free interest rate	3.98%
Expected life	10 years
Expected volatility	35%
Dividend yield	0%

11.    INTEREST EXPENSE AND OTHER

	Three months ended April 30, 2004			Three months ended April 30, 2003
				[see note 2]
Interest on long-term debt	$	9.9		$	0.1
Amortization of deferred financing costs		1.6			—
Interest income		(0.8	)		—
Other		1.5			0.9
	$	12.2		$	1.0

F-12

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

12.    INCOME TAXES

The reconciliation of income taxes computed at the Canadian statutory rates to income tax expense (recovery) was as follows:

	April 30, 2004					April 30, 2003
						[see note 2]
Income taxes calculated at statutory rates	$	(14.6	)	31.3	%	$	(8.4	)	33.3	%
Increase (decrease) resulting from:
Income tax rate differential of foreign subsidiaries		(2.7	)	5.8			(1.6	)	6.4
Effect of income tax rate changes		(0.2	)	0.5			0.6		(2.4	)
Tax benefits of losses and temporary differences not recognized		3.6		(7.7	)		—		—
Recognition of previously unrecorded tax benefit		—		—			(0.1	)	0.4
Tax-exempt items		2.7		(5.8	)		(0.6	)	2.4
Large corporation tax		0.4		(0.8	)		—		—
Other		—		—			1.3		(5.1	)
Income tax recovery	$	(10.8	)	23.3	%	$	(8.8	)	35.0	%

13. SUPPLEMENTAL DISCLOSURE RELATED TO the CONSOLIDATED STATEMENT OF CASH FLOWS

The net changes in non-cash working capital balances related to operations were as follows:

	Three months ended April 30, 2004			Three months ended April 30, 2003
				[see note 2]
Receivables	$	26.9		$	(12.5	)
Receivables of related parties		—			(17.5	)
Inventories		(24.2	)		(48.5	)
Prepaid expenses		5.4			2.8
Other current assets		8.2			—
Accounts payable and accrued liabilities		(50.0	)		(85.0	)
Income taxes payable		2.2			(0.4	)
Employee future benefits		3.1			2.2
Other		(4.8	)		—
	$	(33.2	)	$	(158.9	)

Non-cash transactions

Variation in the amount of receivables transferred in exchange for investment in retained interests of transferred receivables of $13.5 million.

F-13

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

14.    OTHER LONG-TERM LIABILITIES

	April 30, 2004		January 31, 2004
Due to related parties	$	22.9	$	22.7
Other		5.5		8.2
	$	28.4	$	30.9

15.    FINANCIAL INSTRUMENTS

Foreign exchange contracts

The majority of the Company’s foreign exchange contracts were designated as hedges for accounting purposes during the three-month period ended April 30, 2004. As a result, there is no recognition in the interim consolidated financial statements of unrealized gains or losses on such contracts.

16.    RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses are presented net of research and development tax credits and other government assistance of $2.2 million and $3.9 million for the three-month periods ended April 30, 2004 and 2003, respectively.

17.    EMPLOYEE FUTURE BENEFITS

The components of the net benefit plan cost for the three-month period ended April 30:

	2004					2003
	Pension benefits			Other benefits		Pension benefits			Other benefits
Net benefit plan cost
Current service cost	$	3.3		$	0.3	$	4.4		$	0.1
Interest cost		3.0			0.3		4.2			0.2
Expected return on plan assets		(1.7	)		—		(2.4	)		—
Amortization of prior service costs		—			—		0.2			—
Amortization of net actuarial loss		—			—		0.5			—
Net benefit cost	$	4.6		$	0.6	$	6.9		$	0.3

18.    CONTINGENCIES

The Company is subject to the following (all amounts presented are undiscounted):

a)    Guarantees

In connection with the sale of certain products, the Company provides credit and residual value guarantees on sales to related parties. The maximum risk as at April 30, 2004 from these guarantees, maturing in

F-14

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

18.    CONTINGENCIES (continued)

different periods up to 2009, totalled $5.3 million [$5.3 million as at January 31, 2004]. In addition, in connection with a lease agreement, the Company provided a residual value guarantee totalling $2.4 million. The residual value guarantee is exercisable until January 2006.

b)    Litigation

The Company is subject to product liability claims in the normal course of business. With respect to product liability claims which arose prior to the acquisition of the predecessor business, Bombardier has agreed to indemnify the Company for certain amounts. On any product liability claim relating to injuries or damages occurring prior to December 18, 2003, Bombardier shares equally with the Company the first $250,000 per claim in case expenses (fees, settlements and judgments) and indemnifies the Company for any expenses in excess of $125,000 on such claims.

In addition, the Company has two patent infringement cases outstanding as well as one complaint for alleged infringement of a trademark. The Company also has various other cases outstanding mainly for commercial disputes with terminated dealers and minor disputes with customers.

The Company intends to vigorously defend its position in these matters. Management believes the Company has recorded adequate provisions to cover potential losses and amounts not recoverable under insurance coverage, if any, in relation to these legal actions. While the final outcome with respect to actions outstanding or pending as at April 30, 2004 cannot be predicted with certainty, it is management’s opinion that their resolution will not have material adverse effects on the Company’s financial position, results of operations, or cash flows.

19.    SEGMENT DISCLOSURE

The Company operates in the three reportable segments described below. Each reportable segment offers different products and services and requires different technology and marketing strategies.

The Power Sports segment designs, develops, manufactures and sells snowmobiles, watercraft, all-terrain vehicles, sport boats and Rotax engines. Power Sports products are sold mainly through an international network of independent dealers and distributors. The manufacturing plants are located primarily in Canada, the United States, Austria and Finland.

The Marine Engine segment designs, develops, manufactures and sells outboard engines available across three technologies: 2-stroke carburated, 2-stroke direct injection and 4-stroke technology. Marine Engine products are sold directly to boat builders or through an international network of independent dealers and distributors. The Marine Engine manufacturing plants are located primarily in the United States and Mexico.

The Utility Vehicles segment designs, develops, manufactures and sells tracked vehicles for alpine and nordic grooming, snowmobile trail grooming, sidewalk snow removal and rough terrain transport. Such vehicles are sold directly to ski hill operators, governments and through an independent distributor network. The Utility Vehicles manufacturing plant is located in Canada.

F-15

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

19.    SEGMENT DISCLOSURE (continued)

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies of the most recent annual consolidated financial statements of the Company. Management evaluates performance based on operating profit. Operating profit does not include allocated Corporate office charges for administrative functions as well as interest and income taxes. Intersegment services are accounted for at the exchange amount which management believes reflects current market prices as if the services were provided to third parties.

F-16

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts

19.    SEGMENT DISCLOSURE (continued)

Net segment assets exclude cash, deferred income taxes, goodwill, dealer network and license agreement and are net of accounts payable and accrued liabilities.

	Consolidated				Power Sports			Marine Engine				Utility Vehicles
	April 2004 $		April 2003 $		April 2004 $	April 2003 $		April 2004 $		April 2003 $		April 2004 $		April 2003 $
External revenues	630.9		515.8		479.5	378.8		143.6		129.1		7.8		7.9
Intersegment revenues	—		—		3.9	4.1		7.5		6.5		—		—
Segment revenues	630.9		515.8		483.4	382.9		151.1		135.6		7.8		7.9
Cost of sales and operating expenses	606.7		509.4		450.1	371.4		158.5		138.1		9.5		10.5
Depreciation and amortization	29.8		26.5		23.9	19.8		5.8		6.5		0.1		0.2
	636.5		535.9		474.0	391.2		164.3		144.6		9.6		10.7
Segment operating profit (loss)	(5.6	)	(20.1	)	9.4	(8.3	)	(13.2	)	(9.0	)	(1.8	)	(2.8	)
Corporate and other	6.0		4.2
Depreciation dealer network	0.5		—
Operating loss	(12.1	)	(24.3	)
Interest expense and other	12.2		1.0
Accretion in carrying value of redeemable preferred share	1.0		—
Unrealized foreign exchange loss on long-term debt	21.2		—
Loss before income taxes	(46.5	)	(25.3	)
	Consolidated				Power Sports			Marine Engine				Utility Vehicles
	April 2004 $		January 2004 $		April 2004 $	January 2004 $		April 2004 $		January 2004 $		April 2004 $		January 2004 $
Net segment assets	681.9		648.4		447.7	421.9		208.4		204.1		25.8		22.4
Net corporate office and other	64.5		73.1
Goodwill	90.8		92.5
Dealer network	45.5		46.1
License agreement	13.8		13.8
Accounts payable and accrued liabilities	587.9		640.3
Deferred income taxes	99.2		85.2
Cash	152.5		196.2
Total assets	1,736.1		1,795.6

F-17

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

20. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The interim consolidated financial statements have been prepared in accordance with Canadian GAAP which differs in certain respects from US GAAP. The following tables present a summary of the material adjustments and additional disclosures to the Company’s financial statements that would be required in order to conform with US GAAP and the related rules and regulations adopted by the SEC.

Reconciliation of consolidated net loss and comprehensive loss

	For the three-month period ended April 30, 2004			For the three-month period ended April 30, 2003
				[see note 2]
Net loss under Canadian GAAP	$	(35.7	)	$	(16.5	)
Development costs (a)		1.1			(1.0	)
Accretion in carrying value of redeemable Preferred shares (b)		1.0			—
Employee future benefits (c)		—			(0.1	)
Foreign exchange contracts (d)		—			25.9
Software costs (e)		—			0.3
Total adjustments before the following:		2.1			25.1
Income tax expense (f)		0.3			8.1
Total adjustments		1.8			17.0
Net income (loss) under US GAAP		(33.9	)		0.5
Minimum pension liability adjustment, net of tax of $1.0 million (c)		—			(5.1	)
Change in currency translation adjustment		(0.2	)		(2.4	)
Unrealized losses on derivative financial instruments (d)		(24.4	)		—
Comprehensive loss under US GAAP (g)	$	(58.5	)	$	(7.0	)

F-18

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

20. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

Reconciliation of consolidated balance sheet captions

	As at April 30, 2004									As at January 31, 2004
	Canadian GAAP			Adjustments			US GAAP			Canadian GAAP			Adjustments			US GAAP
Other current assets (d)	$	75.8		$	(10.9	)	$	64.9		$	93.1		$	—		$	93.1
Long-term deferred income tax assets		22.7			2.0			24.7			15.5			2.3			17.8
Other long-term assets (a)		61.7			(7.9	)		53.8			64.5			(9.0	)		55.5
Accounts payable and accrued liabilities (d)		587.9			13.5			601.4			640.3			—			640.3
Deficit (b)		(53.2	)		(4.9	)					(17.5	)		(6.2	)
					(1.0	)		(59.1	)					(0.5	)		(24.2	)
Currency translation adjustment		1.8			(1.8	)		—			2.0			(2.0	)		—
Accumulated other comprehensive income: (g)
Currency translation adjustment		—			1.8						—			2.0
Unrealized losses on derivative financial instruments (d)		—			(24.4	)		(22.6	)		—			—			2.0
Redeemable preferred shares (b)		44.2			(44.2	)		—			43.2			(43.2	)		—
Mezzanine preferred shares (b)		—			44.2			44.2			—			43.2			43.2
Total assets		1,736.1			(16.8	)		1,719.3			1,795.6			(6.7	)		1,788.9

	Three-month period ended April 30, 2004								Three-month period ended April 30, 2003
	Canadian GAAP			Adjustments		US GAAP			Canadian GAAP			Adjustments			US GAAP
Cash flows from operating activities (a)	$	(29.2	)	$	—	$	(29.2	)	$	(150.0	)	$	(1.7	)	$	(151.7	)
Cash flows from investing activities (a)		(15.1	)		—		(15.1	)		(14.0	)		1.7			(12.3	)

(a)    Development costs and in process research and development

Under Canadian GAAP, certain development costs are deferred and amortized if they meet certain criteria. Under US GAAP, these costs are expensed as incurred. In addition, under Canadian GAAP, development costs are classified as investing activities in the statement of cash flows whereas they are classified as operating activities in the statement of cash flows under US GAAP.

(b)    Redeemable preferred shares

Under Canadian GAAP preferred shares which are mandatorily redeemable by the Company upon the occurrence of certain future events that management considers to be likely are recorded as liabilities and are accreted to the redemption value at the estimated redemption date. Accretion of carrying value and unpaid dividends are included in net loss.

F-19

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

20. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

Under US GAAP, the redeemable preferred shares are recorded at fair value outside of equity, and the accretion of the carrying value and unpaid dividends are recorded as a capital transaction.

(c)    Employee future benefits

April 30, 2004

As part of the acquisition, Bombardier Inc. agreed to transfer a proportionate share of assets to fund the liabilities assumed by the Company under its new plans. As a result there were no unfunded accumulated benefit obligations as of April 30, 2004 and therefore no differences between Canadian GAAP and US GAAP.

April 30, 2003

Under Canadian GAAP, effective February 1, 2000, the predecessor adopted the new method of accounting for employee future benefits. In reporting the impact of the adoption of this method, the transitional obligation was accounted for as a charge to Bombardier Inc.’s net investment. Under US GAAP, the transitional pension obligation that arose on February 1, 1989, upon the adoption of Financial Accounting Standards Board Statement No. 87 is being amortized over 16 years.

Under US GAAP, an additional minimum pension liability is recorded for any excess of the unfunded accumulated benefit obligation over the recorded employee future benefits liability. An offsetting intangible asset is recorded equal to unrecognized prior service costs and transitional obligation, with any difference recorded in accumulated other comprehensive income.

(d)    Foreign exchange contracts

April 30, 2004

Under US GAAP, unrealized gain/loss on derivative financial instruments designated as hedges are recorded in comprehensive income.

April 30, 2003

Under Canadian GAAP, foreign exchange contracts entered into by the predecessor, to hedge foreign currency exposure met the criteria for hedge accounting. Under US GAAP, hedging activities and practices did not meet the documentation criteria necessary to apply hedge accounting under FAS 133 or firm commitment criteria under SFAS 52. Accordingly, changes in the fair value of forward exchange contracts are recorded in income under US GAAP.

(e)    Software costs

Under Canadian GAAP, costs incurred to enhance the service potential of computer software that extend its useful life may be capitalized. Under US GAAP, costs that extend the useful life absent any additional functionality are charged to expense as incurred.

F-20

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

20. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

(f)    Income taxes

The income taxes adjustment is reflecting the income tax effect on the adjustments between Canadian GAAP and US GAAP.

(g)    FAS 130 “Comprehensive Income”

U.S. GAAP establishes standards for reporting and display of comprehensive income (loss) and its components. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Under U.S. GAAP, all components of comprehensive income must be reported in the financial statements in the period in which they are recognized. A total amount for comprehensive income shall be displayed in the financial statements where the components of other comprehensive income are reported.

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On December 18, 2003, the Company entered into a senior secured credit facility, and issued senior subordinated notes. The senior secured credit facility and the senior subordinated notes (the “Guaranteed Debt”) are fully and unconditionally guaranteed on a joint and several basis by certain of the Company’s subsidiaries (“Guarantor Subsidiaries”). The Guaranteed Debt is not guaranteed by Austrian Subsidiaries which produce Rotax^TM engines, the Finland Subsidiaries which produce Lynx^TM and certain models of Ski-Doo^TM snowmobiles, all other non-domestic subsidiaries and certain immaterial domestic subsidiaries which are either intended to be used for foreign tax planning purposes or are prohibited by law from guaranteeing the Guaranteed Debt (collectively the “Non-Guarantor Subsidiaries”). The following supplemental condensed consolidating financial information sets forth, on an unconsolidated basis, the balance sheet as at April 30 and January 31, 2004 and the statements of operations and cash flows for the three-month period ended April 30, 2004 for Bombardier Recreational Products Inc. (the “Parent Company”) and on a combined basis for the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. Comparative information for the results of operations and cash flows of the predecessor business is presented for the three-month period ended April 30, 2003 [see note 2]. The supplemental condensed consolidating financial information reflects the investments of the Parent Company in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method. The Parent Company’s fair value increments, including applicable intangible assets, arising from the acquisition of Bombardier’s recreational products business have been pushed down to the applicable subsidiary columns.

On March 12, 2004, Bombardier (Mexico) S.A. de C.V., and Bombardier Recreational Products Japan Co. Ltd., both of which were Non-Guarantor Subsidiaries as at January 31, 2004, guaranteed the senior subordinated notes through supplemental indentures.

F-21

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Balance Sheet as at April 30, 2004

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets
Cash	$	20.2		$	53.3		$	79.0		$	—		$	152.5
Receivables		54.9			26.8			58.3						140.0
Inventories		165.9			119.9			106.7			(14.1	)		378.4
Prepaid expenses		6.8			2.2			5.1			—			14.1
Deferred income taxes		18.0			48.6			4.6			5.3			76.5
Intercompany accounts		27.9			290.1			21.9			(339.9	)		—
Other current assets		31.2			14.9			29.7			—			75.8
Total current assets		324.9			555.8			305.3			(348.7	)		837.3
Property, plant and equipment		162.7			181.1			141.2			—			485.0
Goodwill		107.6			(96.3	)		295.5			(216.0	)		90.8
Trademarks		151.1			—			—			—			151.1
Other intangible assets		53.4			34.1			—			—			87.5
Deferred income taxes		20.4			0.4			1.9			—			22.7
Investments in affiliates		344.8			22.5			—			(367.3	)		—
Other long-term assets		34.2			7.7			19.8			—			61.7
	$	1,199.1		$	705.3		$	763.7		$	(932.0	)	$	1,736.1
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	233.3		$	201.2		$	153.2		$	0.2		$	587.9
Income taxes payable		—			3.0			7.6			—			10.6
Current portion of long-term debt		2.7			1.2			1.3			—			5.2
Intercompany accounts		53.1			—			460.7			(513.8	)		—
Other current liabilities		—			1.2			1.4			—			2.6
Deferred income taxes		—			—			—			—			—
Total current liabilities		289.1			206.6			624.2			(513.6	)		606.3
Long-term debt		540.1			116.1			—			—			656.2
Deferred income taxes		—			15.8			0.2			—			16.0
Employee future benefits liability		51.8			1.6			71.3			—			124.7
Other long-term liabilities		15.4			7.5			5.5			—			28.4
Redeemable preferred shares		44.2			—			—			—			44.2
Total liabilities		940.6			347.6			701.2			(513.6	)		1,475.8
Shareholder’s equity
Share capital		311.0			352.5			59.7			(412.2	)		311.0
Contributed surplus		0.7			—			—			—			0.7
Deficit		(53.2	)		3.6			2.9			(6.5	)		(53.2	)
Currency translation adjustment		—			1.6			(0.1	)		0.3			1.8
	$	1,199.1		$	705.3		$	763.7		$	(932.0	)	$	1,736.1

F-22

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Balance Sheet as at January 31, 2004

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets
Cash	$	56.9		$	44.8		$	94.5	$	—		$	196.2
Receivables		58.6			37.7			57.5		(0.4	)		153.4
Inventories		153.4			115.3			89.9		(6.8	)		351.8
Prepaid expenses		13.8			2.7			2.7		—			19.2
Deferred income taxes		16.9			47.9			2.2		2.7			69.7
Intercompany accounts		181.9			399.2			98.7		(679.8	)		—
Other current assets		36.3			16.7			42.3		(2.2	)		93.1
Total current assets		517.8			664.3			387.8		(686.5	)		883.4
Property, plant and equipment		170.5			174.0			153.4		—			497.9
Goodwill		107.8			(96.6	)		295.8		(214.5	)		92.5
Trademarks		151.1			—			—		—			151.1
Other intangible assets		56.0			34.7			—		—			90.7
Deferred income taxes		12.5			0.6			2.4		—			15.5
Investments in affiliates		343.7			22.5			—		(366.2	)		—
Other long-term assets		35.6			8.1			20.8		—			64.5
	$	1,395.0		$	807.6		$	860.2	$	(1,267.2	)	$	1,795.6
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	263.1		$	199.0		$	180.9	$	(2.7	)	$	640.3
Income taxes payable		1.7			2.2			5.1		—			9.0
Current portion of long-term debt		2.6			1.1			1.3		—			5.0
Intercompany accounts		206.1			120.4			524.9		(851.4	)		—
Other current liabilities		0.2			1.0			2.3		—			3.5
Deferred income taxes		—			—			0.3		—			0.3
Total current liabilities		473.7			323.7			714.8		(854.1	)		658.1
Long-term debt		522.7			112.3			—		—			635.0
Deferred income taxes		—			17.3			0.2		—			17.5
Employee future benefits liability		50.2			1.0			70.7		—			121.9
Other long-term liabilities		18.2			7.2			5.5		—			30.9
Redeemable preferred shares		43.2			—			—		—			43.2
Total liabilities		1,108.0			461.5			791.2		(854.1	)		1,506.6
Shareholder’s equity
Share capital		304.5			345.8			66.4		(412.2	)		304.5
Deficit		(17.5	)		(1.7	)		2.3		(0.6	)		(17.5	)
Currency translation adjustment		—			2.0			0.3		(0.3	)		2.0
	$	1,395.0		$	807.6		$	860.2	$	(1,267.2	)	$	1,795.6

F-23

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Operations

	For the three-month period ended April 30, 2004
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Revenues	$	371.2		$	460.2		$	234.6	$	(435.1	)	$	630.9
Cost of sales		343.7			420.1			204.6		(427.6	)		540.8
Gross profit		27.5			40.1			30.0		(7.5	)		90.1
Operating expenses
Selling and marketing		10.5			26.3			3.7		—			40.5
Research and development		12.3			8.8			9.3		—			30.4
General and administrative		20.7			0.6			10.0		—			31.3
Total operating expenses		43.5			35.7			23.0		—			102.2
Operating profit (loss)		(16.0	)		4.4			7.0		(7.5	)		(12.1	)
Interest expense and other		10.8			(4.7	)		6.1		—			12.2
Accretion in carrying value of redeemable preferred shares		1.0			—			—		—			1.0
Unrealized foreign exchange loss on long-term debt		17.5			3.7			—		—			21.2
Share in earnings of equity accounted investees		1.2			—			—		(1.2	)		—
Income (loss) before income taxes		(46.5	)		5.4			0.9		(6.3	)		(46.5	)
Income tax expense (recovery)		(10.8	)		0.1			0.3		(0.4	)		(10.8	)
Net income (loss)	$	(35.7	)	$	5.3		$	0.6	$	(5.9	)	$	(35.7	)
	For the three-month period ended April 30, 2003 [see note 2]
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Revenues	$	291.7		$	366.0		$	187.9	$	(329.8	)	$	515.8
Cost of sales		246.8			341.6			168.8		(324.0	)		433.2
Gross profit		44.9			24.4			19.1		(5.8	)		82.6
Operating expenses
Selling and marketing		14.4			27.9			3.1		—			45.4
Research and development		13.1			8.9			7.4		—			29.4
General and administrative		16.3			10.0			5.8		—			32.1
Total operating expenses		43.8			46.8			16.3		—			106.9
Operating profit (loss)		1.1			(22.4	)		2.8		(5.8	)		(24.3	)
Interest expense and other		—			0.4			0.6		—			1.0
Income (loss) before income taxes		1.1			(22.8	)		2.2		(5.8	)		(25.3	)
Income tax expense (recovery)		0.8			(9.0	)		1.4		(2.0	)		(8.8	)
Net income (loss)	$	0.3		$	(13.8	)	$	0.8	$	(3.8	)	$	(16.5	)

F-24

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Cash Flows

	For the three-month period ended April 30, 2004
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
OPERATING ACTIVITIES
Net income (loss)	$	(35.7	)	$	5.3		$	0.6		$	(5.9	)	$	(35.7	)
Non-cash items:
Depreciation and amortization		13.5			6.9			9.9			—			30.3
Amortization of deferred financing costs		1.3			0.3			—			—			1.6
Employee stock compensation		0.7			—			—			—			0.7
Deferred income taxes		(8.8	)		(1.0	)		(2.4	)		(2.9	)		(15.1	)
Accretion in carrying value of redeemable preferred shares		1.0			—			—			—			1.0
Unrealized gains on derivative financial instruments		17.5			3.7			—			—			21.2
Net changes in non-cash working capital balances related to operations		(27.1	)		(9.0	)		(6.0	)		8.9			(33.2	)
Cash flows from operating activities		(37.6	)		6.2			2.1			0.1			(29.2	)
INVESTING ACTIVITIES
Additions to property, plant and equipment		(2.8	)		(2.3	)		(3.6	)		—			(8.7	)
Business acquisition		(6.4	)		—			—			—			(6.4	)
Cash flows from investing activities		(9.2	)		(2.3	)		(3.6	)		—			(15.1	)
FINANCING ACTIVITIES
Intercompany account		6.5			10.1			(16.2	)		(0.4	)		—
Increase in stated capital		6.5			—			—			—			6.5
Other liabilities		(2.7	)		—			—			—			(2.7	)
Cash flows from financing activities		10.3			10.1			(16.2	)		(0.4	)		3.8
Effect of exchange rate changes on cash		(0.2	)		(5.5	)		2.2			0.3			(3.2	)
Net increase (decrease) in cash		(36.7	)		8.5			(15.5	)		—			(43.7	)
Cash at beginning of period		56.9			44.8			94.5			—			196.2
Cash at end of period	$	20.2		$	53.3		$	79.0		$	—		$	152.5
Supplemental information
Cash paid for:
Interest		1.8			0.2			—			—			2.0
Income taxes		3.8			0.2			1.2			—			5.2

F-25

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION [continued]

Condensed Consolidating Statement of Cash Flows

	For the three-month period ended April 30, 2003 [see note 2]
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
OPERATING ACTIVITIES
Net income (loss)	$	0.3		$	(13.8	)	$	0.8		$	(3.8	)	$	(16.5	)
Non-cash items:
Depreciation and amortization		11.2			7.4			7.9			—			26.5
Deferred income taxes		4.3			(0.8	)		—			(2.0	)		1.5
Gain on disposal of other assets		—			(2.6	)		—			—			(2.6	)
Net changes in non-cash working capital balances related to operations		(138.9	)		(31.3	)		5.5			5.8			(158.9	)
Cash flows from operating activities		(123.1	)		(41.1	)		14.2			—			(150.0	)
INVESTING ACTIVITIES
Additions to property, plant and equipment		(4.9	)		(3.4	)		(8.7	)		—			(17.0	)
Proceeds on disposal of other assets		—			4.5			—			—			4.5
Other long-term assets		—			—			(1.5	)		—			(1.5	)
Cash flows from investing activities		(4.9	)		1.1			(10.2	)		—			(14.0	)
FINANCING ACTIVITIES
Net variation in advances (to) from related parties		—			41.1			(17.3	)		—			23.8
Net contribution by Bombardier Inc.		129.0			—			—			—			129.0
Other liabilities		(2.8	)		—			—			—			(2.8	)
Cash flows from financing activities		126.2			41.1			(17.3	)		—			150.0
Effect of exchange rate changes on cash		—			0.1			4.4			—			4.5
Net increase (decrease) in cash		(1.8	)		1.2			(8.9	)		—			(9.5	)
Cash at beginning of period		(0.4	)		2.4			26.7			—			28.7
Cash at end of period	$	(2.2	)	$	3.6		$	17.8		$	—		$	19.2
Supplemental information
Cash paid for:
Interest		—			0.4			0.6			—			1.0
Income taxes		—			0.5			0.5			—			1.0

F-26

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Summary of Differences Between Canadian and U.S. GAAP

As disclosed in note 20, the Consolidated Financial Statements have been prepared in accordance with Canadian GAAP. As well, the supplemental condensed consolidating financial information has been prepared in accordance with Canadian GAAP which differs in certain respects from U.S. GAAP and related rules and regulations by the SEC. Such differences are summarized below.

Reconciliation of Condensed Balance Sheet Captions as at April 30, 2004

		Parent									Non-Guarantor Subsidiaries
	Note	Canadian GAAP			Adjustments			U.S. GAAP			Canadian GAAP			Adjustments			U.S. GAAP
Other current assets	20 (d)	$	31.2		$	(10.9	)	$	20.3		$	29.7		$	—		$	29.7
Long-term deferred income tax assets			20.4			0.1			20.5			1.9			1.9			3.8
Other long-term assets	20 (a)		34.2			(0.7	)		33.5			19.8			(7.2	)		12.6
Accounts payable and accrued liabilities	20 (d)		233.3			13.5			246.8			153.2			—			153.2
Deficit	20 (b)		(53.2	)		0.4 (1.0	)		(53.8	)		2.9			(5.3 —	)		(2.4	)
Currency translation adjustment			—			—			—			(0.1	)		0.1			—
Accumulated other comprehensive income:	20 (g)
Currency translation adjustment			—			—			—			—			(0.1	)		(0.1	)
Unrealized losses on derivative financial instruments	20 (d)		—			(24.4	)		(24.4	)		—			—			—
Redeemable preferred shares	20 (b)		44.2			(44.2	)		—			—			—			—
Mezzanine preferred shares	20 (b)		—			44.2			44.2			—			—			—
Total assets		$	1,199.1			(11.5	)	$	1,187.6		$	763.7		$	(5.3	)	$	758.4

F-27

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Reconciliation of Condensed Balance Sheet Captions as at January 31, 2004

			Parent									Non-Guarantor Subsidiaries
	Note		Canadian GAAP			Adjustments			U.S. GAAP			Canadian GAAP		Adjustments			U.S. GAAP
Long-term deferred income tax assets			$	12.5		$	0.1		$	12.6		$	2.4	$	2.2		$	4.6
Other long-term assets	20	(a)		35.6			(0.8	)		34.8			20.8		(8.2	)		12.6
Deficit	20	(b)		(17.5	)		(0.2	)(0.5)		(18.2	)		2.3		(6.0	)		(3.7	)
Currency translation adjustment				—			—			—			0.3		(0.3	)		—
Accumulated other comprehensive income:	20	(g)
Currency translation adjustment				—			—			—			—		0.3			0.3
Redeemable preferred shares	20	(b)		43.2			(43.2	)		—			—		—			—
Mezzanine preferred shares	20	(b)		—			43.2			43.2			—		—			—
Total assets			$	1,395.0		$	(0.7	)	$	1,394.3		$	860.2	$	(6.0	)	$	854.2

F-28

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited]

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.  SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Reconciliation of Condensed Statement of Operations and Other Comprehensive Income (loss)

		For the three-month period ended April 30, 2004
	Note	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss) under Canadian GAAP		$	(35.7	)	$	5.3		$	0.6		$	(5.9	)	$	(35.7	)
Development costs	20 (a)		0.1			—			1.0			—			1.1
Accretion in carrying value of redeemable Preferred shares	20 (b)		1.0			—			—			—			1.0
Total adjustments before the following:			1.1			—			1.0			—			2.1
Income tax expense	20 (f)		—			—			0.3			—			0.3
Total adjustments			1.1			—			0.7						1.8
Net income (loss) under US GAAP			(34.6	)		5.3			1.3			(5.9	)		(33.9	)
Change in currency translation adjustment			—			(0.4	)		(0.4	)		0.6			(0.2	)
Unrealized losses on derivative financial instruments	20 (d)		(24.4	)		—			—						(24.4	)
Comprehensive income (loss) under US GAAP	20 (g)	$	(59.0	)	$	4.9		$	0.9		$	(5.3	)	$	(58.5	)
		For the three-month period ended April 30, 2003 [see note2]
	Note	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss) under Canadian GAAP		$	0.3		$	(13.8	)	$	0.8		$	(3.8	)	$	(16.5	)
Development costs	20 (a)		0.1			—			(1.1	)		—			(1.0	)
Employee future benefits	20 (c)		(0.1	)		—			—			—			(0.1	)
Foreign exchange contracts	20 (d)		26.0			—			(0.1	)					25.9
Software costs	20 (e)		0.3			—			—			—			0.3
Total adjustments before the following:			26.3			—			(1.2	)		—			25.1
Income tax expense	20 (f)		8.4			—			(0.3	)		—			8.1
Total adjustments			17.9			—			(0.9	)		—			17.0
Net income (loss) under US GAAP			18.2			(13.8	)		(0.1	)		(3.8	)		0.5
Change in currency translation adjustment			—			(0.7	)		(1.7	)		—			(2.4	)
Minimum pension liability adjustments			(5.9	)		0.1			0.7			—			(5.1	)
Comprehensive income (loss) under US GAAP	20 (g)	$	12.3		$	(14.4	)	$	(1.1	)	$	(3.8	)	$	(7.0	)

F-29

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

[Unaudited}

For the three-month periods ended April 30, 2004 and 2003

[Tabular figures in millions of Canadian dollars, except for share amounts

21.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION [continued]

Reconciliation of Condensed Statement of Cash Flows for the Parent and Non-Guarantor subsidiaries

		For the three-month period ended April 30, 2004												For the three-month period ended April 30, 2003
		Parent						Non-Guarantor Subsidiaries						Parent						Non-Guarantor Subsidiaries
	Note	Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP
Cash flows from operating activities	20 (a)	$	(37.6	)	$	(37.6	)	$	2.1		$	2.1		$	(123.1	)	$	(123.1	)	$	14.2		$	12.5
Cash flows from investing activities	20 (a)		(9.2	)		(9.2	)		(3.6	)		(3.6	)		(4.9	)		(4.9	)		(10.2	)		(8.5	)

22.    SUBSEQUENT EVENT

On July 23, 2004, BRP made the decision to sell the Utility Vehicles segment. The results of operations, cash flows and financial position of the Utility Vehicles segment have not been segregated and reported as discontinued operations in the unaudited interim consolidated financial statements as at April 30, 2004 and for the three-month period then ended as this decision occurred subsequent to the date of such statements.

On August 30, 2004, BRP sold its Utility Vehicles segment for a net cash consideration of approximately $40 million. The net assets sold are subject to a purchase price adjustment based on initial working capital amounts at closing as defined in the agreement. As part of the acquisition on December 18, 2003, the assets acquired and liabilities assumed in connection with the Utility Vehicles segment were accounted for at their estimated fair values.

F-30

AUDITORS’ REPORT

To the Directors of

Bombardier Recreational Products Inc.

We have audited the consolidated balance sheet of Bombardier Recreational Products Inc. [the “Company”] as at January 31, 2004 and the consolidated statements of operations, shareholder’s equity and cash flows for the 44-day period ended January 31, 2004. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at January 31, 2004 and the results of its operations and its cash flows for the 44-day period ended January 31, 2004 in accordance with Canadian generally accepted accounting principles.

Montréal, Canada,
May 21, 2004.	Chartered Accountants

F-31

Bombardier Recreational Products Inc.

CONSOLIDATED BALANCE SHEET

As at January 31,

[millions of Canadian dollars]

	Notes	2004
ASSETS	12, 13
Current assets
Cash		$	196.2
Receivables, net of allowance for doubtful accounts of $4.3	4, 5		153.4
Inventories	6		351.8
Prepaid expenses			19.2
Deferred income taxes	19		69.7
Other current assets	7		93.1
Total current assets			883.4
Property, plant and equipment	8		497.9
Goodwill	2		92.5
Trademarks			151.1
Other intangible assets	9		90.7
Deferred income taxes	19		15.5
Other long-term assets, including restricted investments of $12.6	10		64.5
		$	1,795.6
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	4, 11	$	640.3
Income taxes payable			9.0
Current portion of long-term debt	13		5.0
Other short-term liabilities			3.5
Deferred income taxes			0.3
Total current liabilities			658.1
Long-term debt	13		635.0
Deferred income taxes	19		17.5
Employee future benefits liability	22		121.9
Redeemable preferred shares	14		43.2
Other long-term liabilities	15		30.9
Total liabilities			1,506.6
Shareholder’s equity
Share capital	16		304.5
Deficit			(17.5	)
Currency translation adjustment	24		2.0
		$	1,795.6
Commitments and contingencies	23

The accompanying notes are an integral part of these Consolidated Financial Statements.

On behalf of the Board:

Director                                 Director

F-32

Bombardier Recreational Products Inc.

CONSOLIDATED STATEMENT OF OPERATIONS

For the

[millions of Canadian dollars]

	Notes	44-day period ended January 31, 2004
		[see note 3]
Revenues	4	$	345.0
Cost of sales	4		318.5
Gross profit			26.5
Operating expenses
Selling and marketing			18.6
Research and development			13.3
General and administrative	4		7.9
Total operating expenses			39.8
Operating loss			(13.3	)
Interest expense and other	18		6.4
Accretion in carrying value of redeemable preferred shares	14		0.5
Net loss on derivative financial instruments			4.5
Unrealized gain on foreign exchange			(1.3	)
Loss before income taxes			(23.4	)
Income tax recovery	19		(5.9	)
Net loss		$	(17.5	)

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-33

Bombardier Recreational Products Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the

[millions of Canadian dollars]

	Notes	44-day period ended January 31, 2004
		[see note 3]
OPERATING ACTIVITIES
Net loss		$	(17.5	)
Non-cash items:
Depreciation and amortization			14.1
Amortization of deferred financing costs			0.8
Deferred income taxes			(9.2	)
Accretion in carrying value of redeemable preferred shares	14		0.5
Unrealized gains on derivative financial instruments			(3.2	)
Employee future liabilities	22		1.7
Net changes in non-cash working capital balances related to operations	20		92.4
Cash flows from operating activities			79.6
INVESTING ACTIVITIES
Business acquisition, net of cash acquired	2		(757.2	)
Additions to property, plant and equipment			(21.0	)
Cash flows from investing activities			(778.2	)
FINANCING ACTIVITIES	20
Issuance of common share	16		304.5
Issuance of long-term debt			638.0
Repayment of long-term debt			(0.5	)
Debt issuance costs			(46.1	)
Cash flows from financing activities			895.9
Effect of exchange rate changes on cash			(1.1	)
Net increase in cash			196.2
Cash at beginning of period			—
Cash at end of period		$	196.2
Supplemental information
Cash paid for:
Interest		$	2.6
Income taxes		$	1.6

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-34

Bombardier Recreational Products Inc.

CONSOLIDATED STATEMENT OF DEFICIT

For the

[millions of Canadian dollars]

	44-day period ended January 31, 2004
	[see note 3]
Balance at beginning of period	$	—
Net loss		(17.5	)
Balance at end of period	$	(17.5	)

The accompanying notes are an integral part of these Consolidated Financial Statements.

F-35

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

1.    NATURE OF OPERATIONS

Bombardier Recreational Products Inc. (“BRP”), is a wholly owned subsidiary of J. A. Bombardier Inc. (“J.A.B.”) and was incorporated under the laws of Canada. BRP is owned through J.A.B. by Bain Capital Luxembourg Investments S. ar. L (50%), La Caisse de Dépôt et Placement du Québec (15%) and Beaudier Inc., Jadier International Inc., Gestion J.I.C.A. Inc., Fonds Achbée Inc. collectively (“Beaudier group”) (35%), collectively (the “Sponsors”). BRP and its subsidiaries, collectively (the “Company”), through its Power Sports, Marine Engines and Utility Vehicles Segments, develops, manufactures and sells snowmobiles, watercrafts, all-terrain vehicles, outboard engines, sport boats, recreational and small aircraft engines, snow-grooming equipment and multi-purpose tracked vehicles (the “recreational products business”). The Company’s products are sold mainly through an international network of independent dealers, distributors and original equipment manufacturers. The Company manufactures its products, primarily in North America and certain European countries.

As further described in note 2, on December 18, 2003, the Company acquired the recreational products business from Bombardier Inc. Prior to December 18, 2003, the recreational products business consisted primarily of a division within the Bombardier Inc. group of companies (“Bombardier”).

BRP, formally 4186516 Canada Inc., was incorporated on November 3, 2003, for the purpose of the acquisition of Bombardier’s recreational products business. During December 2003, substantially all assets and liabilities of Bombardier’s Canadian recreational products business were transferred to 4145321 Canada Inc., a company under control of Bombardier. On December 18, 2003, BRP acquired the shares of 4145321 Canada Inc., certain patents and trademarks from Bombardier, as well as the shares of the subsidiaries of Bombardier’s recreational products business. On the same date, 4145321 Canada Inc. was amalgamated with 4186516 Canada Inc. to form BRP.

2.    BUSINESS ACQUISITION

Acquisition of the recreational products business

Pursuant to a purchase agreement dated December 2, 2003, the Company purchased Bombardier’s recreational products business for a total consideration of $806.3 million. The net assets acquired are subject to a purchase price adjustment based on initial working capital amounts at closing and indemnification amounts related to income taxes due to Bombardier, which are included in other long-term liabilities. Any subsequent adjustment will result in an adjustment to the purchase price for accounting purposes. The total cost of the purchase was allocated to the assets acquired and liabilities assumed on the basis of their estimated fair values, as determined by preliminary independent valuations, using the purchase method of accounting. The initial valuation of the acquired assets and assumed liabilities could change by material amounts as a result of finalizing the valuations. The significant elements for which the fair values could be modified include intangible assets, goodwill, deferred income taxes, and other liabilities.

The results of operations of the recreational products business have been included in the consolidated financial statements from the date of acquisition on December 18, 2003.

F-36

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

2.    BUSINESS ACQUISITIONS (continued)

The following table summarizes the estimated aggregate fair values of the assets acquired and liabilities assumed at the acquisition date, as well as total amounts given as consideration for the acquisition:

	$
Receivables	183.1
Inventories	436.3
Prepaid expenses	6.1
Current deferred income tax assets	61.1
Current derivative financial assets	53.8
Property, plant and equipment[1]	503.3
Other long-term assets	21.9
Long-term deferred income tax assets	12.7
Intangibles assets [see note 9]:
Trademarks	151.1
Dealer network	46.3
Patents	32.1
License agreement	13.8
Accounts payable and accrued liabilities[2]	(623.8	)
Income taxes payable	(6.6	)
Current portion of long-term debt	(1.4	)
Other short-term liabilities	(3.5	)
Current deferred income tax liabilities	(0.6	)
Long-term debt	(2.5	)
Long-term deferred income tax liabilities	(17.4	)
Employee future liabilities	(120.0	)
Other long-term liabilities	(30.9	)
Net assets acquired	714.9
Goodwill	91.4
Purchase price	806.3
Consideration given
Cash, net of cash acquired of $196.7[3]	713.3
50,000 Redeemable Class A Preferred Shares [see note 14]	42.7
	756.0
Transaction costs[4]	50.3
Total consideration	806.3

[1] Includes $14.5 million of assets held for sale, which consists primarily of land and buildings.

[2] Includes $24.8 million and $3.0 million of costs associated with restructuring activities related to the acquisition [see note 11] and acquired derivative financial liabilities, respectively.

[3] Includes an amount of $49.0 of cash received from Bombardier related to the working capital purchase price adjustment, in accordance with the terms of the purchase agreement.

[4] Transaction costs are principally comprised of sponsors fees [see note 4] and professional fees.

F-37

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

2.    BUSINESS ACQUISITIONS (continued)

In connection with the acquisition, the Company and Bombardier entered into a trademark license agreement, at no cost to the Company, expiring on December 31, 2008, with automatic consecutive five year renewal terms, conditional on the Beaudier Group continuing to be a direct or indirect shareholder of the Company, under which the Company licensed from Bombardier certain trademarks owned by Bombardier.

The goodwill recorded as a result of the acquisition is not deductible for tax purposes. For the Trademarks and other intangible assets of $243.3 million recorded on the acquisition, $74.0 million is deductible for tax purposes.

3.    SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying consolidated financial statements include the accounts of BRP and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated on consolidation. Although the Company was incorporated in November 2003, since there were no operations prior to the business acquisition described in note 2, these consolidated financial statements present the results of operations and cash flows of the Company for the 44-day period from December 19, 2003 to January 31, 2004.

The consolidated financial statements as at and for the 44-day period ended January 31, 2004 have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). As further described in note 26, these accounting principles differ in certain respects from those that would have been followed had these consolidated financial statements been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and the related rules and regulations adopted by the United States Securities and Exchange Commission (“SEC”).

Use of estimates

The preparation of consolidated financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related amounts of revenues and expenses and disclosure of contingent assets and liabilities. Significant areas requiring the use of management estimates relate to the determination of fair value of assets acquired and liabilities assumed in the acquisition of the recreational products business, provisions for the restructuring of the acquired business, determination of pension and other employee benefits, net realizable value of inventory, promotion and incentive program accruals, provision for product warranty, reserves for environmental matters, the useful life of assets subject to amortization and evaluation of net recoverable amounts, fair value of goodwill and intangibles, provisions for income taxes, estimated redemption date of redeemable preferred shares, and the determination of the fair value of financial instruments. Actual results could differ from these estimates, and such differences could be material.

Translation of foreign currencies

Foreign operations are classified as self-sustaining or integrated.

F-38

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

a)    Self-sustaining foreign operations

All assets and liabilities are translated at exchange rates in effect at year end. Revenues and expenses are translated at the average exchange rates for the period. Translation gains and losses are deferred and shown separately in shareholder’s equity.

b)    Accounts in foreign currencies and integrated foreign investees

Accounts in foreign currencies, including integrated foreign investees, are translated using the temporal method. Under this method, monetary balance sheet items are translated at the exchange rates in effect at year end and non-monetary items are translated at historical exchange rates. Revenues and expenses (other than depreciation and amortization, which are translated at the same exchange rates as the related assets) are translated at the exchange rates in effect on the transaction dates or at the average exchange rates of the period. Translation gains or losses are included in the consolidated statement of operations.

Allowance for doubtful accounts

The Company provides a reserve for doubtful accounts based on historical rates and trends. This reserve is adjusted periodically as information about specific accounts becomes available.

Sales of receivables

The Company sells receivables to third parties and related parties. Transfers of accounts receivables are recognized as sales when the Company is deemed to have surrendered control over these assets and consideration other than beneficial interest in the transferred assets was received. When the transfer is considered a sale, the Company derecognizes all assets sold, recognizes at fair value the assets received and the liabilities incurred and records a gain or loss on the sale. Such gain or loss depends in part on the previous carrying amount of the financial assets involved in the transfer, allocated between the assets sold and the retained interests based on their relative fair values at the date of transfer. The retained interests presented in notes 4 (c) and 7 represent the difference between the carrying value of the receivables transferred and the proceeds received.

Retained interests are accounted for as investments in accordance with their substance and are included with other current assets on the consolidated balance sheet. When the carrying value exceeds the fair value of the retained interests accounted for as investments, and the decline in value is other than temporary, the retained interest is written down to the fair value in the same period. The excess of all cash flows attributable to the retained interest estimated at the date of transfer of the receivables over the initial investment is recognized as interest income over the life of the retained interest using the effective yield method.

Inventory valuation

Raw materials and work in process, finished products and parts and accessories are valued at the lower of cost (average cost or first-in, first-out) and replacement cost (raw materials) or net realizable value. The cost of work in process and finished products includes the cost of raw materials, direct labor and related manufacturing overhead.

F-39

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes

Income taxes are provided for using the liability method. Under this method, deferred income tax assets and liabilities are determined based on all significant differences between the carrying amounts and tax bases of assets and liabilities using substantively enacted tax rates and laws expected to be in effect when the differences reverse.

Property, plant and equipment

Property, plant and equipment are recorded at cost and are depreciated on a straight line basis over the following estimated useful lives:

Equipment	2 to 15 years
Tooling	2 to 7 years
Buildings	10 to 40 years

Depreciation of assets under construction begins when they are ready for their intended use.

Pre-operating costs

Pre-operating costs are expensed as incurred.

Development costs

The Company capitalizes development costs on certain projects when specific criteria are met and their recovery is reasonably assured. Development costs are amortized from the beginning of commercial production based on the number of units to be delivered over a maximum period of five years. When the criteria which previously justified the deferral of costs is no longer met, the unamortized balance is reduced to its net recoverable amount by way of an additional current period amortization charge. Net recoverable amount is defined as each project’s estimated related future revenues, less estimated production, selling and administrative costs and any additional development costs to be incurred. Research costs are expensed as incurred.

Investments-restricted

Investments-restricted are recorded at cost and consist of securities with various maturities. Reductions in value, other than temporary, are recorded as a charge in the period in which they occur.

Deferred financing costs

Deferred financing costs are amortized on the effective yield basis over the duration of the related loans and are presented with interest expense and other on the consolidated statement of operations. The unamortized portion is presented in other long-term assets.

Goodwill and other intangible assets

Goodwill represents the difference between the purchase price, including acquisition costs, of businesses acquired and the fair value of the identifiable net assets acquired. Goodwill is tested for impairment

F-40

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

annually on the basis of its fair value, or more frequently if events or circumstances indicate that the asset might be impaired. If the carrying value of a reporting unit, including the allocated goodwill, exceeds its fair value, goodwill impairment is measured as the excess of the carrying amount of the reporting unit’s allocated goodwill over the implied fair value of the goodwill, based on the fair value of the assets and liabilities of the reporting unit. Fair value is determined using discounted expected future net cash flows.

Trademarks and the license agreement have an indefinite life and are not amortized to earnings but are assessed for impairment on an annual basis, or more frequently if events or circumstances indicate that the asset might be impaired by comparing carrying value to fair value, using discounted expected future net cash flows to determine fair value.

Patents and dealer networks, acquired as part of the business acquisition, are amortized on a straight-line basis over a period of 3 and 25 years respectively. Any potential impairment is calculated in the same manner as that disclosed under impairment of long-lived assets.

Employee future benefits

The cost of pension and other post-retirement benefits earned by employees under the Company’s defined benefit plans is actuarially determined using the projected benefit method and Management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and health care costs. Plan obligations are determined based on expected future benefit payments discounted using current market interest rates and plan assets are presented at fair value. The net actuarial gains and losses over 10% of the greater of the benefit obligation and the fair value of plan assets is amortized to income over the estimated average remaining service life of participants of approximately 20 years.

Redeemable preferred shares

Upon occurrence of certain future events, which the Company has determined to be likely to occur, redemption of the Company’s Class A Preferred Shares for cash would be mandatory [see note 14]. As a result, the estimated fair value of the Company’s obligation to redeem the Class A Preferred Shares (“Redeemable Preferred Shares”) is recorded as a liability on the date of issue. The carrying value of the redeemable preferred shares is accreted to its redemption value through charges to operations over the period up to their estimated redemption date based on the effective yield method.

The estimated redemption date is based on expectations as to when events triggering mandatory redemption are most likely to occur. Timing of the events could differ from estimates or may never occur. If the triggering events do not occur within a specified future period, the shares would never become mandatorily redeemable, and would accordingly be reclassified to equity on a prospective basis.

Revenue recognition

Revenues are recognized when title passes upon delivery of products to customers and collection is reasonably assured. Based on the historical experience of the recreational products operations, product returns, within the normal course of business or resulting from repossession under customer financing programs, have not

F-41

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

been material. The Company provides for estimated cash sales promotions and incentive program expenses, which are recognized as a reduction of revenues at the later of delivery of products to customers or the announcement of the sales promotion and incentive programs.

Sales promotions and incentive programs

Sales promotion and incentive programs include dealer and distributor rebates, volume discounts and retail financing programs. The Company generally provides for estimated sales promotion and incentive expenses at the later of revenue recognition or the announcement of sales promotion and incentive programs. Sales promotion and incentive expenses are estimated based on current programs and historical rates of the recreational products operations for each product line. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the customer usage rate varies from historical trends. Based on the historical experience of the Company’s predecessor, sales promotion and incentive expenses have been within expectations and differences have not been material.

Cash sales promotions and incentive programs are recorded as reduction of revenues and promotions and incentive programs consisting of free products or services are recorded as cost of sales.

Shipping and handling costs

The Company records shipping and handling costs as a component of cost of sales at the time the product is shipped.

Advertising costs

The Company expenses advertising costs as incurred. Total advertising expense amounted to $6.2 million for the 44-day period ended January 31, 2004.

Dealer holdback programs

The Company provides dealer incentive programs whereby at the time of shipment, the Company invoices an amount to the dealer that is reimbursable upon ultimate sale of the product. The Company records these amounts as a liability on the consolidated balance sheet.

Product warranties

The Company provides limited product warranties covering periods from six months to three years for primarily all product lines. However, in certain geographical markets, the Company provides longer warranties as determined by local regulations and market conditions. In addition, the Company provides certain extended product warranties. The Company’s standard warranties allows its customers to repair or replace defective products at the expense of the Company during such warranty period at no cost to the consumer. The warranty provision is established at the time of sale based on Management’s best estimate, using historical rates and trends. Adjustments to the warranty provision are made from time to time as actual claims materialize. Factors that could have an impact on the warranty accrual in any given year include the following: manufacturing

F-42

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

quality, shifts in product mix, changes in warranty coverage periods, snowfall and its impact on snowmobile usage, product recalls and any significant changes in sales volume.

Research and development credits

Research and development (R&D) tax credits are deducted from R&D expense for items of an operating nature and are deducted from the related assets for items of a capital nature.

Impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets, to be held and used, including property, plant and equipment and intangibles subject to amortization, when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability test is performed using undiscounted future net cash flows that are directly associated with the asset’s use and eventual disposition. The amount of the impairment, if any, is measured as the difference between the carrying value and the fair value of the impaired assets and presented as an additional current period depreciation and amortization charge.

Environmental obligations

Liabilities are recorded when environmental claims or remedial efforts are probable, and the costs can be reasonably estimated. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to future revenue generation, are expensed.

Derivative financial instruments

The Company uses foreign exchange contracts to mitigate foreign currency risks and exposures.

The Company does not use derivative financial instruments for trading or speculative purposes. Forecasted foreign currency cash flows can only be hedged when significant characteristics and the expected terms of the forecasted foreign currency cash flows are identified and it is probable that these cash flows will occur. There is no recognition in the Consolidated Financial Statements of unrealized gains or losses on foreign exchange contracts designated as hedges of forecasted foreign currency cash flows until the anticipated transactions occur.

Gains or losses related to the derivative financial instruments designated as hedges are recorded in the same category as the hedged item.

Gains and losses associated with derivative financial instruments designated as hedges, which have been settled prior to maturity, are deferred on the consolidated balance sheet and recognized to income in the period in which the underlying hedged transaction is recognized to income, if the underlying transaction is still probable of occurring. Otherwise, these gains and losses are recognized immediately to income. In the event that a hedged item is settled prior to the termination of the corresponding derivative financial instrument or is no longer probable of occurring, any gain or loss on such derivative financial instrument is recognized to income immediately.

F-43

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Derivative financial instruments that give rise to a financial asset or financial liability, and are not designated as hedges, are recognized on the consolidated balance sheet at fair value as a derivative financial assets within other current assets, or as derivative financial liabilities within accounts payable and accrued liabilities with changes in fair value recognized in current income as gains or losses on derivative financial instruments.

Stock based compensation

The Company records compensation expense for grants of stock options issued by J.A.B. to directors, officers and employees of the Company using the fair value method over the vesting period of the option, with a corresponding amount as contributed surplus [see note 28].

4.    RELATED PARTY TRANSACTIONS

The Company is a party to various related party transactions carried out in the normal course of business. In addition to other related party transactions disclosed elsewhere in the Consolidated Financial Statements, related party transactions are described below. All transactions are measured at their exchange amount.

a)    Transactions with sponsors

Upon completion of the business acquisition, the Company and J.A.B. entered into a management agreement with affiliates of the sponsors to provide management services. Pursuant to such agreement, affiliates of the Sponsors receive an aggregate annual management fee of U.S.$2.25 million. An amount of $0.4 million was incurred and paid during this period related to this agreement.

Fees and expenses of $24.5 million were incurred in connection with the business acquisition [see note 2] and the related financing [see notes 12 and 13], of which $6.4 million were transactions costs and $18.1 million were deferred financing costs. As at January 31, 2004 all of these amounts were paid.

b)    Floorplan financing

Bombardier Capital Ltd. and Bombardier Capital Inc. (collectively “BC”), wholly owned subsidiaries of Bombardier, which has significant shareholders in common with the Company, have entered into a retail floorplan inventory financing agreement for retailers of the Company’s products.

The current maximum assets under management related to the inventory financing agreement is U.S.$750.0 million ($994.8 million) subject to increase as necessary or by agreement. The agreement is for a renewable period of five years. Under the agreement, BC acts as the exclusive provider of floorplan financing for the Company’s products in North America excluding outboard engine products.

In addition, the Company has a separate agreement with BC providing for the Company to repurchase floorplan inventory repossessed from defaulting dealers, which is capped at an amount equal to the greater of U.S.$25.0 million ($33.2 million) and 10% of the 12 month average amount of financing outstanding under the

F-44

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

4.    RELATED PARTY TRANSACTIONS (continued)

floorplan agreement. Any loss on the resale of repurchased products is the responsibility of the Company. No material losses have been incurred under this agreement during the period presented. The total amount of floorplan financing provided by BC for the 44-day period ended January 31, 2004 was $176.7 million. Outstanding floorplan financing between the Company’s dealers, including amounts outstanding prior to the transaction, and BC as at January 31, 2004 was $740.8 million.

Furthermore, as a sales incentive, the Company generally provides a free floorplanning period to the dealers during which the Company pays interest to BC for a limited period of time. The Company’s portion of the financing charges under the floorplan agreement for the 44-day period ended January 31, 2004 was $3.5 million which is classified as a reduction in revenues.

c)    Sales of receivables

BRP and certain of its subsidiaries (collectively “the transferors”), entered into a receivable transfer arrangement (“the arrangement”) with Bombardier Capital Inc. (“BCI”) for a maximum of U.S.$115.0 million ($152.5 million), which expires in June 2005. Under this arrangement, BCI funds receivables subject to certain eligibility criteria for the Company’s U.S. and European subsidiaries. Pursuant to the arrangement, receivables are first transferred without recourse to BRP Receivables Funding, LLC (“BRFL”), a special purpose entity (“SPE”), controlled and consolidated by the Company but legally separate and distinct from it. Receivables transferred to BRFL are owned by it and not owned by the transferors of such receivables.

Pursuant to the arrangement, the transferors transfer receivables subject to certain criteria to the SPE for the purpose of legally isolating them from the Company and its creditors. Following the transfer of each receivable to BRFL, this latter will transfer and assign to BC, with recourse, an undivided interest in all of its right, title and interest in the transferred receivables in exchange for consideration comprising cash equal to 85% of the amount of eligible receivables, an undivided 15% ownership interest in eligible receivables and an undivided 100% ownership interest in ineligible receivables transferred. Carrying values of receivables transferred approximate their fair values due to their short-term nature. In accordance with the arrangement, the transferors will assume certain servicing obligations as well as administration of collection with respect to all receivables transferred.

Certain of the Company’s subsidiaries, not party to the arrangement, transfer receivables directly to BC.

Total receivable transfers to BC during the 44-day period ended January 31, 2004 were $213.9 million, of which $130.1 million were outstanding at January 31, 2004. The loss incurred by the Company in connection with all transfers of receivables for the 44-day period ended January 31, 2004 amounted to $0.7 million and was classified with cost of sales. The receivables not party to the arrangement and sold are subject to the repurchase of new and unused products at the total unpaid principal balance due, in the event of dealer default. The amount outstanding subject to repurchase as at January 31, 2004 was $9.4 million, including amounts prior to the transaction.

The balance outstanding of all receivables held by the SPE amounted to $18.3 million as at January 31, 2004. As at January 31, 2004, an amount of $40.5 million, representing the SPE’s retained interest in receivables transferred to BCI pursuant to the arrangement, was accounted for as investments on the Company’s balance

F-45

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

4.    RELATED PARTY TRANSACTIONS (continued)

sheet and included with other current assets [see note 7], net of provision for loss of $0.8 million. Also, an amount of $22.0 million is owed to BCI with respect to collections on receivables transferred to BCI pursuant to the arrangement.

d)    Other

The Company sells snow-grooming equipment to BC, who in turn leases it to the ultimate customer [see note 23]. Total sales of snow-grooming equipment to BC for the period between December 19, 2003 and January 31, 2004 was $1.0 million.

The Company is also renting equipment from BC. Rental expense of $0.7 million is included in cost of sales on the consolidated statement of operations.

5.    RECEIVABLES

a)    Sales of receivables

In addition to the related party transactions disclosed in note 4 (c), the Company also sells receivables to third parties. The fair value of the receivables sold approximates their carrying value at the time of sale. The total amount of receivables sold to third parties for the 44-day period ended January 31, 2004 was $51.7 million. A portion of the amount of receivables sold are subject to the repurchase of new and unused products, in the event of dealer default, at the total unpaid principal balance due. The amount outstanding subject to repurchase as at January 31, 2004, including amounts outstanding prior to the transaction, totalled $48.2 million.

b)    Allowance for doubtful accounts

The change in the Company’s allowance for doubtful accounts for the 44-day period ended January 31, 2004 is as follows:

Balance at beginning of period	$	4.0
Bad debt expense		0.4
Uncollectible accounts written-off, net of recovery		(0.1	)
Balance at end of period	$	4.3

6.    INVENTORIES

	January 31, 2004
Raw materials and work in process	$	123.9
Finished products		135.1
Parts and accessories		92.8
	$	351.8

Included in inventories is an amount of $9.3 million, principally in parts and accessories, related to fair value increments recorded as part of the acquisition.

F-46

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

7.    OTHER CURRENT ASSETS

	January 31, 2004
Investment in retained interests of transferred receivables [see note 4 (c)]	$	40.5
Derivative financial assets [see note 21]		35.6
Assets held for sale		14.5
Other		2.5
	$	93.1

8.    PROPERTY, PLANT AND EQUIPMENT

	January 31, 2004
	Cost		Accumulated depreciation		Net book value
Equipment	$	175.8	$	5.4	$	170.4
Tooling		109.5		5.4		104.1
Buildings		181.1		1.5		179.6
Land		43.8		—		43.8
	$	510.2	$	12.3	$	497.9

Included in the above are assets under construction amounting to $6.7 million as at January 31, 2004. Depreciation of property, plant and equipment for the 44-day period ended January 31, 2004 was $12.3 million. Depreciation included in cost of sales and operating expenses are respectively $10.9 million and $1.4 million.

9.    OTHER INTANGIBLE ASSETS

	January 31, 2004
	Weighted average amortization period (years)	Cost		Accumulated amortization		Net book value
Intangible assets subject to amortization
Patents	3	$	32.1	$	1.3	$	30.8
Dealer network	25		46.3		0.2		46.1
	16		78.4		1.5		76.9
Intangible assets not subject to amortization
License agreement	N/A		13.8		—		13.8
		$	92.2	$	1.5	$	90.7

Amortization of patents and dealer network was $1.5 million for the 44-day period ended January 31, 2004.

F-47

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

9.    OTHER INTANGIBLE ASSETS (continued)

The estimated aggregate amortization expenses for each of the next five successive fiscal years:

2005	$	12.6
2006		12.6
2007		11.3
2008		1.9
2009		1.9

10.    OTHER LONG-TERM ASSETS

	January 31, 2004
Development costs	$	9.0
Investments – restricted [1]		12.6
Deferred financing costs		42.9
	$	64.5

[1] Investments-restricted can only be used for severance payments and pension costs associated with Bombardier-Rotax GmbH & Co. KG pension plans, and are not available for general corporate use and are, therefore, classified as restricted long-term assets which are designated as held to maturity.

Amortization of development costs and deferred financing costs for the 44-day period ended January 31, 2004 were $0.3 million, and $0.8 million respectively.

11.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	January 31, 2004
Accounts payable	$	272.5
Accrued liabilities		81.5
Payroll related liabilities		59.7
Warranty provision		78.3
Sales promotions and incentive programs		56.9
Dealer holdback programs		30.6
Due to related parties [see notes 2 and 4]		22.6
Restructuring provision		24.6
Acquisition costs		6.4
Derivative financial liabilities		7.2
	$	640.3

F-48

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

11.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (continued)

The change in the Company’s accrued warranty provision for the 44-day period ended January 31, 2004 is as follows:

Balance at beginning of period	$	78.0
Expensed during the period		5.2
Change in estimate		0.3
Claims paid during the period		(5.4	)
Effect of foreign currency exchange rate changes		0.2
Balance at end of period	$	78.3

Restructuring Provision

Costs associated with certain restructuring activities related to the business acquisition [see note 2] are recorded as a liability assumed as of the consummation date of the business acquisition and are included in the cost of the acquired business. Below is a summary of the activity related to these restructuring costs recorded for the 44-day period ended January 31, 2004:

	Employee severance and relocation expenses			Facilities shutdown costs		Total
Restructuring accrual in connection with business acquisition	$	17.8		$	7.0	$	24.8
Accrual utilized		(0.2	)		—		(0.2	)
Balance at January 31, 2004	$	17.6		$	7.0	$	24.6

In connection with the acquisition, management approved and initiated a plan to restructure the recreational products business, and recorded a related accrual of $24.8 million. The acquisition liabilities include incremental costs to terminate approximately 345 employees located in Canada, the U.S. and Austria, and costs to shut down manufacturing facilities, primarily in the Marine Engines segment located in the U.S. and relocate the Company’s head office. While the Company has completed its preliminary assessment of restructuring activities related to the business acquisition, its estimates of costs may be different from those actually incurred. Such differences could include penalties for contract cancellations and closure costs. Any such costs identified within one year of the acquisition date will require an adjustment to the liability and therefore will be recorded as part of the purchase price. Under the current plan, restructuring activities are expected to be completed by June 30, 2005.

12.    CREDIT FACILITY

Under the senior secured credit facilities [see note 13], the Company can borrow up to $250.0 million (“available borrowings”) under a revolving credit facility (the “revolving facility”). Pursuant to the revolving facility, the Company may borrow up to $200.0 million of the available borrowings, which borrowings may be denominated, in Canadian dollars, in U.S. dollars or in Euros, and one of the Company’s wholly owned subsidiaries may borrow up to $50.0 million of the available borrowings, which borrowings will be denominated

F-49

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

12.    CREDIT FACILITY (continued)

in U.S dollars. Available borrowings can also be drawn in the form of letters of credit by the Company for an amount of $100.0 million in Canadian dollars, U.S dollars or Euros and by one of the Company’s wholly owned subsidiaries for an additional U.S. $20.0 million ($26.5 million). Interest on U.S. denominated loans is equal to either the U.S. prime rate, the U.S. base rate, or an adjusted London Interbanking Offered Rate (“LIBOR”) rate, in the case of Canadian dollar denominated loans, is equal to the Canadian prime rate and, in the case of Euro denominated loans, is equal to an adjusted EUROLIBOR rate, in each case plus an applicable margin. The revolving facility terminates on December 18, 2008. The revolving facility can be used for general corporate purposes and to fund working capital requirements.

The revolving facility is secured by all of the assets of the Company, certain of its subsidiaries and of J.A.B. and contains restrictions including the obligation to maintain certain financial ratios. The revolving facility requires that the Company comply on a quarterly basis with certain financial covenants, such as a maximum total leverage ratio test, a minimum interest coverage ratio test, and a minimum fixed charge coverage ratio test. In addition, the revolving facility restricts or limits the Company’s ability to make capital expenditures and incur additional indebtedness.

As of January 31, 2004 the Company had issued letters of credit for an amount of $54.5 million under the revolving facility, and the remaining amount available was unused.

13.    LONG-TERM DEBT

The Company’s long-term debt and average effective rates and maturities are as follows:

	Effective interest rate as at January 31, 2004	Maturity date	2004
Senior secured credit facilities (U.S. $280 million) (a)	6.0%	2010	$	371.4
Senior subordinated notes (U.S. $200 million) (b)	8 3/8%	2013		265.3
Euro-denominated debt (Euro 0.8)	5.6%	2005		1.3
U.S.-denominated debt (U.S. $1.5)	2.0%	2008		2.0
				640.0
Current portion				(5.0	)
Long-term portion			$	635.0

a)    Senior Secured Credit Facilities:

On December 18, 2003, the Company entered into a credit agreement (the “credit agreement ”) with a syndicate of banks consisting of the revolving facility [see note 12] and the following:

i. U.S. $84 million ($111.4 million), secured U.S. term loan maturing December 18, 2010

ii. U.S. $196 million ($260.0 million), secured Canadian term loan maturing December 18, 2010

F-50

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

13.    LONG-TERM DEBT (continued)

The U.S. and Canadian term loans bear interest equal to either the U.S. prime rate [4.0% as at January 31, 2004], or LIBOR [1.13% as at January 31, 2004] plus applicable margin, semi-annual principal repayments of U.S. $1.4 million ($1.9 million) beginning June 30, 2004 and final quarterly principal repayments of U.S. $65.8 million ($87.3 million) beginning March 31, 2010 and ending December 31, 2010.

The credit agreement is secured by all of the assets of the Company, certain of its subsidiaries and of J.A.B. The credit agreement contains restrictions including the obligation to maintain certain financial ratios. The credit agreement requires that the Company comply on a quarterly basis with certain financial covenants, such as a maximum total leverage ratio test, a minimum interest coverage ratio test, and a minimum fixed charge coverage ratio test. In addition, the credit agreement facility restricts or limits the Company’s ability to make capital expenditures and incur additional indebtedness.

Subject to customary exceptions, any outstanding amount under the credit agreement may be subject to prepayments if certain secured assets or if any equity or debt is issued for net cash proceeds or 50% of the excess cash flow in any fiscal year (as defined in the credit agreement).

b)    Senior Subordinated Notes

On December 18, 2003 the Company issued U.S.$200 million ($265.3 million) of unsecured senior subordinated notes (the “notes”), maturing on December 15, 2013. Interest on the notes accrue at a rate of 8 ³/8% per annum and is payable semi-annually beginning June 15, 2004. The notes rank junior, in right of payment, to all of the Company’s existing and future senior indebtedness, including indebtedness under the credit agreement, pari passu, in right of payment, with all existing and future senior subordinated indebtedness and senior, in right of payment, to all existing or future subordinated indebtedness. Pursuant to a registration rights agreement entered into on the date of issuance of the notes (the “registration rights agreement”), if (i) the Company fails to file a registration statement with the SEC with respect to the offer and exchange of the notes for replacement notes with terms substantially identical to, and evidencing the same continuing debt as, the notes on or prior to 195 days after the date of issuance of the notes, (ii) such registration statement is not declared effective on or prior to 270 days after of the date of issuance of the notes, (iii) such exchange offer is not consummated on or prior to 300 days after the date of issuance of the notes, or (iv) certain other events set forth in the registration rights agreement (each of (i), (ii), (iii) and (iv) being a “registration default”), the interest on the notes will increase by 0.25% per annum of the principal amount of the notes. Such additional interest may increase by an additional 0.25% per annum of the principal amount, up to a maximum of 1% per annum of the principal amount, for each 90-day period that a registration default is continuing until all such registration defaults have been cured.

On or after December 15, 2008, subject to certain terms of the indenture governing the notes, the notes are redeemable, in whole or in part, at the redemption prices set forth below (expressed as a percentage of the principal amount of the notes plus accrued and unpaid interest and additional interest thereon, if any, to the applicable redemption date), if during the 12 month period beginning on December 15 of the years as follows:

	Redemption Price
2008	104.188	%
2009	102.792	%
2010	101.396	%
2011 and thereafter	100.000	%

F-51

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

13.    LONG-TERM DEBT (continued)

Before December 15, 2006, the Company may redeem, on one or more occasions, 35% of the aggregate principal amount of the notes at a redemption price of 108.375% of the principal amount, conditional on the occurrence of an equity offering and that at least 65% of the aggregate principal amount of the notes remains outstanding, and otherwise subject to the terms and conditions of the indenture governing the notes.

Before December 15, 2008, the Company may redeem the notes, as a whole, but not in part, upon the occurrence of a change of control (as defined in the indenture governing the notes) at a redemption price equal to 100% of the principal amount thereof plus an applicable premium as of, and accrued and unpaid interest and additional interest thereon, if any, to the date of redemption, and otherwise subject to the terms of the indenture governing the notes.

The repayment requirements on the long-term debt for the five years ended January 31 and thereafter, are as follows:

2005	$	5.0
2006		3.7
2007		3.7
2008		3.7
2009		5.7
Thereafter		618.2
	$	640.0

14.    REDEEMABLE PREFERRED SHARES

On December 18, 2003, as part of the consideration given for the purchase of Bombardier’s recreational products business [see note 2], the Company issued 50,000 Class A Preferred Shares at $1,000 per share [see note 16]. Redemption of the Class A Preferred Shares is mandatory upon occurrence of certain future events that the Company considers likely to occur and as a result, the shares were initially recorded at their fair value of $42.7 as a long-term liability on the Company’s consolidated balance sheet. The carrying value of the liability is being accreted to its redemption value of $50 million plus unpaid dividends, at its estimated redemption date, through charges to income using an effective interest rate of 9 ³/8%. Since an exact redemption date cannot be determined due to uncertainties regarding the timing of future redemption triggering events, management of the Company has estimated the accretion period to be five years from the date the redeemable preferred shares were issued. In addition, the carrying value of the preferred shares is increased for unpaid dividends through charges to income included with the accretion in carrying value of redeemable preferred shares in the consolidated statement of operations.

For the 44-day period ended January 31, 2004, the carrying value of the redeemable preferred shares was increased by $0.5 million relating to accretion charges.

The redemption value of the redeemable preferred shares as at January 31, 2004 was $50.3 million, including unpaid dividends.

F-52

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

15.    OTHER LONG-TERM LIABILITIES

	January 31, 2004
Due to related parties [see note 2]	$	22.7
Other		8.2
	$	30.9

16.    CAPITAL STOCK

The authorized capital stock of the Company is as follows:

Classified as redeemable preferred shares in long-term liabilities

Unlimited number of Class A Preferred Shares, cumulative dividend per share of 6% per annum calculated on the redemption price of $1,000 per share plus any unpaid dividends for prior years, redeemable at the option of the Company or mandatory redemption on a direct or indirect change of control to a party other than the sponsors, sale of all or substantially all of the assets of the Company, or on the Company’s or J.A.B.’s initial public offering, at a price of $1,000 plus accrued dividends

Classified as equity

Unlimited number of Common Shares

Unlimited number of Class B Preferred Shares, rights and privileges to be determined by the board of directors of the Company prior to the issuance of any Class B Preferred Shares, provided that all Class B Preferred Shares will in all instances rank junior as to liquidation rights, dividend rights and redemption rights to the Class A Preferred Shares for so long as any Class A Preferred Shares are outstanding

Issued and outstanding	2004
1 Common Share	$	304.5

On December 18, 2003, the Company issued 1 common share to its parent company for a total cash consideration of $304.5 million.

17.    RESEARCH AND DEVELOPMENT EXPENSES

R&D expenses of $13.3 million are presented net of R&D tax credits and other government assistance of $1.4 million for the 44-day period ended January 31, 2004.

18.    INTEREST EXPENSE AND OTHER

	44-day period ended January 31, 2004
Interest on long-term debt	$	5.4
Amortization of deferred financing costs		0.8
Other		0.2
	$	6.4

F-53

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

19.    INCOME TAXES

The reconciliation of income taxes computed at the Canadian statutory rates to income tax expense was as follows:

				44-day period ended January 31, 2004
Income taxes calculated at statutory rates	$	(7.4	)	31.8	%
Increase (decrease) resulting from:
Manufacturing and processing credit		0.2		(0.7	)
Income tax rate differential of foreign subsidiaries		0.6		(2.6	)
Effect of income tax rate changes		0.1		(0.4	)
Recognition of previously unrecorded tax benefit		(0.1	)	0.2
Tax-exempt items		0.4		(1.7	)
Large corporation tax		0.2		(0.8	)
Other		0.1		(0.5	)
Income tax recovery	$	(5.9	)	25.3	%

Details of income tax recovery are as follows:

	44-day period ended January 31, 2004
Current income tax expense	$	3.3
Deferred income tax recovery
Temporary differences		(9.2	)
Effect of income tax rate changes		0.1
Recognition of previously unrecorded tax benefits		(0.1	)
		(9.2	)
Income tax recovery	$	(5.9	)

F-54

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

19.    INCOME TAXES (continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax asset (liability) as at January 31, 2004 are as follows:

	January 31, 2004
Accounts payable and accrued liabilities	$	68.2
Loss carry-forwards		14.7
Accrued benefit liability		22.7
Inventories		8.8
Property, plant and equipment		(42.7	)
Other current assets		(11.2	)
Other long-term assets		11.9
Other intangible assets		(7.7	)
Other current liabilities		2.2
Other long-term liabilities		0.6
Other		0.1
Prepaid expenses		1.3
		68.9
Valuation allowance		(1.5	)
Net amount	$	67.4

Losses carried forward and other temporary differences, which are available to reduce future taxable income for which no related income tax benefits have been recognized, amounted to $4.5 million as at January 31, 2004 and have no specified expiry dates.

Deferred income taxes have not been provided for the undistributed earnings of foreign subsidiaries of approximately $28.9 million as of January 31, 2004. Management intends to reinvest those earnings for an indefinite period, except for distribution having an immaterial tax effect. If foreign subsidiaries earnings were distributed, taxes for the 44-day period ended January 31, 2004 would be increased by approximately $0.3 million.

F-55

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

20.    SUPPLEMENTAL DISCLOSURE RELATED TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

The net changes in non-cash working capital balances related to operations were as follows:

	44-day period ended January 31, 2004
Receivables	$	(23.0	)
Inventories		88.3
Prepaid expenses		(13.2	)
Other current assets		35.6
Accounts payable and accrued liabilities		1.9
Income taxes payable		2.4
Other		0.4
	$	92.4

Non-cash transactions

Issuance of redeemable preferred shares in conjunction with the business acquisition at a fair value of $42.7 [see note 2].

Transfer of receivables in exchange of investment in retained interests of transferred receivables of $40.5 [see notes 4 (c) and 7].

21.    FINANCIAL INSTRUMENTS

Foreign exchange risks

The Company uses derivative financial instruments to manage foreign currency risks and exposures. The Company does not trade in derivatives for speculative purposes.

Foreign exchange contracts

None of the Company’s foreign exchange contracts were designated as hedges for accounting purposes. As a result, all such contracts were accounted for at fair value, with changes in fair value recognized in current income.

F-56

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    FINANCIAL INSTRUMENTS (continued)

The following table sets out the significant notional amounts outstanding under foreign exchange contracts, the average contractual exchange rates and the settlement periods of these contracts.

	January 31, 2004
	Average rate	Notional amount		Canadian equivalent notional amount		Fair value favourable/ (unfavourable)
Sell contracts (sell currency / buy currency):
USD / CDN $
Less than 1 year	0.7108	USD	417.7	$	588.0	$	30.9
Between 1 and 2 years	0.7525	USD	194.0		257.4		(3.3	)
USD / JPY
Less than 1 year	0.0095	USD	1.8		2.4		—
AUD / USD
Less than 1 year	1.4580	AUD	46.5		42.2		(3.7	)
Buy contracts (buy currency / sell currency):
EURO / CDN $
Less than 1 year	0.6120	EURO	148.0		241.8		3.0
Between 1 and 2 years	0.6123	EURO	66.0		107.8		1.5

Fair value of financial instruments

Cash, receivables, investment in retained interest of transferred receivables, accounts payable and accrued liabilities

The carrying amounts reported on the consolidated balance sheet approximates their fair values of these items due to their short-term nature.

Restricted investments

The carrying amount of restricted investments approximates its fair value, which are estimated using public quotations, when available, or discounted cash flow analyses, using interest rates applicable for assets with similar terms.

Long-term debt and redeemable preferred shares

The fair values of long-term debt and redeemable preferred shares are determined by discounting the future contractual cash flows anticipated pursuant to the financial contracts in force using discount rates which represent the interest rates on loans of which the Company could avail itself for loans having similar terms and conditions. Long-term debt and redeemable preferred shares with a carrying value different than their fair value are as follows:

	Carrying Value		Fair Value
Senior subordinated notes	$	265.3	$	273.3
Redeemable preferred shares		43.2		44.5

F-57

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

21.    FINANCIAL INSTRUMENTS (continued)

Foreign exchange contracts

The fair values generally reflect the estimated amounts that the Company would receive upon the settlement of favourable contracts or be required to pay to terminate unfavourable contracts at the reporting dates. Investment dealers’ quotes or quotes from the Company’s bankers are available for all of the foreign exchange contracts. The fair values of the Company’s foreign exchange contracts as at January 31, 2004, were recognized on the consolidated balance sheet at fair value, with outstanding contracts in a favourable position classified as derivative financial assets, and the outstanding contracts in an unfavourable position classified as derivative financial liabilities.

Credit risk

In addition to the credit risk described elsewhere in these Consolidated Financial Statements, the Company is subject to risk related to derivative financial instruments, whereby counterparty failure would result in economic losses on favourable contracts. However, the counterparties to these derivative financial instruments are major financial institutions which the Company anticipates will satisfy their obligations under the contracts.

The Company considers that its credit risk associated with its receivables did not represent a significant concentration of credit risk at January 31, 2004, due to the large number of customers and their dispersion across many geographic areas.

22.    EMPLOYEE FUTURE BENEFITS

The Company maintains non-contributory defined benefits plans that provide for pensions, other post-retirement and post-employment benefits, and also makes contributions to defined contribution retirement plans.

Defined benefit plans

Before the acquisition, Bombardier was sponsoring several registered and non-registered defined benefit pension plans and other post-retirement and post-employment benefits plans for its employees. Certain BRP employees were part of Bombardier plans covering employees of multiple segments (“common plans”).

a)    Canadian employee future benefits

Effective December 18, 2003, the Company put in place defined benefit pension plans and other post-retirement benefit plans for its Canadian employees providing benefits that are substantially the same than the ones provided by Bombardier before the acquisition.

Since Canadian employees were part of Bombardier common plans, as part of the acquisition, an agreement was reached with Bombardier. The purpose of this agreement is to transfer a proportionate share of assets to fund the liabilities assumed by the Company under its new plans. The liabilities assumed by the Company relate only to the active Canadian employees (not the retirees) as of December 18, 2003 and cover past services with Bombardier for eligibility and determination of benefits. As part of the acquisition, Bombardier agreed to make a special one time contribution to these new plans in order to ensure that the contribution of Bombardier will provide accumulation of sufficient funds over the active Canadian employees’ remaining working careers for the new plans to be in position to pay pension benefits as they become due.

F-58

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

22.    EMPLOYEE FUTURE BENEFITS (continued)

The one time contribution from Bombardier to the new plans is still pending, subject to approval by the Company and regulatory approval, if required. The Company’s proportionate share of pension assets is still invested in the Bombardier Trust funds and is credited with interest equal to the Bombardier Trust rate of return net of plan expenses from December 18, 2003 up to the actual transfer date. The Company required contributions payable from December 18, 2003 are held separately for each plan under a custody contract with Royal Trust. The Company had not yet deposited their contributions as at January 31, 2004.

b)    United States employee future benefits

Before the acquisition, employees in United States were part of Bombardier common plans. As part of the acquisition, an agreement was reached with Bombardier. The purpose of this agreement was to ensure that the Company did not assume liabilities for the active and retirees employees as of December 18, 2003 in connection with the defined benefit plan with the exception of the non-registered supplementary executive retirement plan for its executive employees where the Company assumed the liabilities.

Effective December 18, 2003, the Company put in place the non-registered supplementary executive retirement plan for its executive employees in United States.

In order to compensate for the fact that employees after the acquisition will not be a part of a defined benefit pension plan, the Company will modify its defined contribution plan to increase the Company’s contributions. The Company had not yet modified the defined contribution plan as of January 31, 2004.

c)    Other employee future benefits

Since BRP acquired the shares of the subsidiaries of Bombardier’s recreational products business, ownership of the defined benefit plans (both pension and other benefits plans) have been transferred to the Company.

The significant actuarial assumptions adopted to determine the Company’s projected benefit obligation are as follow (weighted-average assumptions as at January 31, 2004):

	January 31, 2004
	Pension benefits		Other benefits
Actuarial assumptions
Discount rate	5.66	%	5.70	%
Expected long-term rate of return on plan assets	6.76		—
Rate of compensation increase	3.89		3.92
Health care and other benefits cost trend	—		5.5

The health care costs were assumed to start at 13.0% in fiscal year 2004 and are expected to gradually decline by 0.75% per year to be at 5.5% in fiscal year 2015, remaining at that level thereafter. Other benefit costs were assumed to increase at the same rate as price inflation.

F-59

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

22.    EMPLOYEE FUTURE BENEFITS (continued)

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One percentage point
	Increase		Decrease
Effect on total of service and interest cost	$	0.2	$	(0.2	)
Effect on postretirement benefit obligation		1.3		(1.1	)

The following tables provide a reconciliation of the changes in the Company’s plans’ projected benefit obligation and fair value of assets and a statement of the funded status as at December 31 (measurement date).

	January 31, 2004
	Pension benefits			Other benefits
Projected benefit obligation
Obligation at beginning of period	$	204.2		$	12.5
Current service cost		1.7			0.1
Interest cost		1.4			0.1
Actuarial loss		(1.7	)		(0.2	)
Benefits paid		(0.4	)		—
Effect of foreign currency exchange rate changes		(0.1	)		—
Projected benefit obligation at end of period	$	205.1		$	12.5
Plan assets [1]
Fair value at beginning of year	$	96.7		$	—
Expected return on plan assets		0.8			—
Employer contributions		1.5			—
Benefits paid		(0.4	)		—
Actuarial loss		(1.3	)		—
Fair value at end of period	$	97.3		$	—
Funded status
Plan deficit	$	(107.8	)	$	(12.5	)
Unrecognized amounts		(1.4	)(2)		(0.2	)
Net recognized amount	$	(109.2	)	$	(12.7	)

[1] Includes the transfer of the assets from Bombardier which is still pending, subject to approval by the Company and regulatory approval.

[2] Includes $1.4 million of actuarial loss for the period ended January 31, 2004 and no prior service costs for the period ended January 31, 2004.

F-60

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

22.    EMPLOYEE FUTURE BENEFITS (continued)

The following table provides the amounts recognized on the consolidated balance sheet as at:

	January 31, 2004
	Pension benefits			Other benefits
Amounts recognized
Accrued benefit asset	$	—		$	—
Accrued benefit liability		(109.2	)		(12.7	)
	$	(109.2	)	$	(12.7	)

The projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $202.0 million and $94.1 million respectively, as at January 31, 2004. The Company’s plans for post-retirement benefits other than pensions are all unfunded.

Included in the projected benefit obligation of $202.0 million is a projected benefit obligation of $70.3 million related to the Company’s subsidiary in Austria which is unfunded as required by Austrian laws. An amount of $12.6 million presented as investments [see note 10] has been restricted from use for general corporate purposes and will be used for certain future severance and pension payments.

The following table provides components of the net benefit plan cost for the 44-day period ended January 31, 2004:

	44-day period ended January 31, 2004
	Pension benefits			Other benefits
Net benefit plan cost
Current service cost	$	1.7		$	0.1
Interest cost		1.4			0.1
Expected return on plan assets		(0.8	)		—
Amortization of prior service costs		—			—
Amortization of net actuarial loss		—			—
Net benefit plan cost	$	2.3		$	0.2

Defined contribution plans

Company contributions under defined contribution plans totaled $0.1 million for the 44-day period ended January 31, 2004.

F-61

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

23.    COMMITMENTS AND CONTINGENCIES

In addition to the commitments and contingencies described elsewhere in these Consolidated Financial Statements, the Company is subject to the following (all amounts presented are undiscounted):

a)    Operating leases

The Company leases buildings and equipment under operating leases. The rent expense under all lease agreements, was $1.9 million for the 44-day period ended January 31, 2004. The related minimum lease payments and residual value guarantees (including $8.5 million to related parties) for the next five years are as follows:

	Buildings and equipment		Residual value guarantees		Total
2005	$	12.4	$	1.7	$	14.1
2006		5.9		1.3		7.2
2007		2.8		0.2		3.0
2008		1.8		—		1.8
2009		1.7		—		1.7
	$	24.6	$	3.2	$	27.8

b)    Floorplan financing

Under its dealer financing agreements with BC [see note 4] and certain third party financing companies, the Company may be required to repurchase new and unused products at the dealer’s total unpaid principal balance to the financing company, subject to preset limits, in the event of dealer default. Any loss on the resale of the repurchased products is the responsibility of the Company. No material losses have been incurred under these agreements by the Company or its predecessors. Outstanding floorplan financing between the Company’s dealers and the respective financing companies as at January 31, 2004, including amounts outstanding prior to the transaction, was $760.4 million.

c)    Sale of receivables

As disclosed in notes 4 and 5, the Company sells certain of its receivables. A portion of the receivables sold are subject to the repurchase of new and unused products at the total unpaid principal balance due, in the event of dealer default. Any loss on the resale of the repurchased products is the responsibility of the Company. No material losses have been incurred under these agreements by the Company or its predecessors. The amount outstanding subject to repurchase as at January 31, 2004 was $57.6 million, including amounts outstanding prior to the transaction.

d)    Purchase agreement

In the normal course of its business, the Company entered into a purchase agreement with a Japanese marine engine manufacturer whereby it must buy a certain number of units of marine engines with an annual minimum purchase requirement for each year through August 31, 2006. Using the purchase price paid during the period ended January 31, 2004, the minimum purchase commitment would be $7.6 million for each year for the next two years.

e)    Other guarantees

In connection with the sale of certain products, the Company provides credit and residual value guarantees on sales to related parties. The maximum risk as at January 31, 2004 from these guarantees, maturing in different periods up to 2009, totalled $5.3 million. In addition, in connection with a lease agreement, the Company provided a residual value guarantee totalling $2.4 million. The residual value guarantee is exercisable until January 2006.

F-62

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

23.    COMMITMENTS AND CONTINGENCIES (continued)

f)    Litigation

The Company is subject to product liability claims in the normal course of business. With respect to product liability claims which arose prior to the business acquisition described in note 2, Bombardier has agreed to indemnify the Company for certain amounts. On any product liability claim relating to injuries or damages occurring prior to December 18, 2003, Bombardier shares equally with the Company the first $250,000 per claim in case of expenses (fees, settlements and judgments) and indemnifies the Company for any expenses in excess of $125,000 on such claims.

In addition, the Company has two patent infringement cases outstanding as well as one complaint for alleged infringement of a trademark. The Company also has various other cases outstanding mainly for commercial disputes with terminated dealers and minor disputes with customers.

The Company intends to vigorously defend its position in these matters. Management believes the Company has recorded adequate provisions to cover potential losses and amounts not recoverable under insurance coverage, if any, in relation to these legal actions. While the final outcome with respect to actions outstanding or pending as at January 31, 2004 cannot be predicted with certainty, it is management’s opinion that their resolution will not have material adverse effects on the Company’s financial position, results of operations, or cash flows.

24.    CURRENCY TRANSLATION ADJUSTMENT

Unrealized currency translation adjustments, which arise on the translation to Canadian dollars of assets and liabilities of the Company’s self-sustaining foreign operations, resulted in a net change in the currency translation adjustment of $2.0 million for the 44-day period ended January 31, 2004. The currency translation adjustment is presented as part of shareholder’s equity.

The 44-day period ended January 31, 2004 net change resulted primarily from the strengthening of the Euro against the Canadian dollar.

25.    SEGMENT DISCLOSURE

The Company operates in the three reportable segments described below. Each reportable segment offers different products and services and requires different technology and marketing strategies.

The Power Sports segment designs, develops, manufactures and sells snowmobiles, watercraft, all-terrain vehicles, sport boats and Rotax engines. Power Sports products are sold mainly through an international network of independent dealers and distributors. The manufacturing plants are located primarily in Canada, the United States, Austria and Finland.

The Marine Engine segment designs, develops, manufactures and sells outboard engines available across three technologies: 2-stroke carburated, 2-stroke direct injection and 4-stroke technology. Marine Engine products are sold directly to boat builders or through an international network of independent dealers and distributors. The Marine Engine manufacturing plants are located primarily in the United States and Mexico.

F-63

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

25.    SEGMENT DISCLOSURE (continued)

The Utility Vehicles segment designs, develops, manufactures and sells tracked vehicles for alpine and nordic grooming, snowmobile trail grooming, sidewalk snow removal and rough terrain transport. Such vehicles are sold directly to ski hill operators, governments and through an independent distributor network. The Utility Vehicles manufacturing plant is located in Canada.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies. Management evaluates performance based on operating profit. Operating profit does not include allocated Corporate office charges for administrative functions as well as interest and income taxes. Intersegment services are accounted for at the exchange amount which management believes reflects current market prices as if the services were provided to third parties.

Net segment assets exclude cash, deferred income taxes, goodwill, dealer network and license agreement and are net of accounts payable and accrued liabilities.

	44-day period ended January 31, 2004
	Consolidated		Power Sports		Marine Engine		Utility Vehicles
	$		$		$		$
External revenues	345.0		273.7		59.8		11.5
Intersegment revenues	—		3.7		2.0		—
Segment revenues	345.0		277.4		61.8		11.5
Cost of sales and operating expenses	341.0		273.7		60.9		12.1
Depreciation and amortization	13.9		10.8		3.1		—
	354.9		284.5		64.0		12.1
Segment operating loss	(9.9	)	(7.1	)	(2.2	)	(0.6	)
Corporate and other	3.2
Depreciation dealer network	0.2
Operating loss	(13.3	)
Interest expense and other	6.4
Accretion in carrying value of redeemable preferred share	0.5
Net loss on derivative financial instruments	4.5
Unrealized gain on foreign exchange	(1.3	)
Income before income taxes	(23.4	)
Net segment assets	648.4		421.9		204.1		22.4
Net corporate office and other	73.1
Goodwill	92.5
Dealer network	46.1
License agreement	13.8
Accounts payable and accrued liabilities	640.3
Deferred income taxes	85.2
Cash	196.2
Total assets	1,795.6

F-64

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

25.    SEGMENT DISCLOSURE (continued)

	44-day period ended January 31, 2004
	Additions to property, plant and equipment
Power Sports	$	19.3
Marine Engine		1.6
Utility Vehicles		0.1
Corporate and other		—
	$	21.0

Geographic information:

	44-day period ended January 31, 2004		As at January 31, 2004
	Revenues		Property, plant and equipment and intangible assets
United States	$	183.9	$	207.1
Canada		49.3		470.3
Italy		17.3		—
Germany		12.5		—
Australia		12.1		0.3
Sweden		7.7		0.1
Spain		9.1		—
France		13.0		—
Finland		3.8		7.7
Norway		7.0		—
Japan		1.8		0.2
Austria		1.0		137.9
Other – Americas		7.9		6.2
Other		18.6		2.4
	$	345.0	$	832.2

26.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The Consolidated Financial Statements have been prepared in accordance with Canadian GAAP which differs in certain respects from US GAAP. The following tables present a summary of the material adjustments and additional disclosures to the Company’s financial statements that would be required in order to conform with US GAAP and the related rules and regulations adopted by the SEC.

F-65

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

26.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

Reconciliation of consolidated net loss and comprehensive loss

	For the 44-day period ended January 31, 2004
Net loss under Canadian GAAP	$	(17.5	)
Acquired development costs (a)		(9.3	)
Reversal of amortization of development costs		0.3
Accretion in carrying value of redeemable Preferred shares (b)		0.5
Total adjustments before the following:		(8.5	)
Income tax recovery (c)		2.3
Total adjustments		(6.2	)
Net loss under US GAAP		(23.7	)
Change in currency translation adjustment		(2.0	)
Comprehensive loss under US GAAP (d)	$	(25.7	)

Reconciliation of consolidated balance sheet captions

	As at January 31, 2004
	Canadian GAAP			Adjustments			US GAAP
Long-term deferred income tax assets	$	15.5		$	2.3		$	17.8
Other long-term assets (a)		64.5			(9.0	)		55.5
Deficit (b)		(17.5	)		(6.2 (0.5	) )		(24.2	)
Currency translation adjustment		2.0			(2.0	)		—
Accumulated other comprehensive income : (d)
Currency translation adjustment		—			2.0			2.0
Redeemable preferred shares (b)		43.2			(43.2	)		—
Mezzanine preferred shares (b)		—			43.2			43.2
Total assets		1,795.6			(6.7	)		1,788.9

(a)    Development costs and in process research and development

Under Canadian GAAP, certain development costs are deferred and amortized if they meet certain criteria. Under US GAAP, these costs are expensed as incurred.

Upon acquisition of the recreational products business, as described in note 2, development costs were recorded on the balance sheet at their fair market value. Under U.S. GAAP, the acquired development costs are recorded at their fair market value on the balance sheet as of the acquisition date and are expensed immediately following the acquisition. The Company’s appraisal valued in-process research at an immaterial amount, and therefore the acquisition of the recreational products business did not require the write-off of any in process research.

F-66

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

26.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

(b)    Redeemable preferred shares

Under Canadian GAAP preferred shares which are mandatorily redeemable by the Company upon the occurrence of certain future events that management considers to be likely are recorded as liabilities and are accreted to the redemption value at the estimated redemption date. Accretion of carrying value and unpaid dividends are included in net loss.

Under US GAAP, the redeemable preferred shares are recorded at fair value outside of equity, and the accretion of the carrying value and unpaid dividends are recorded as a capital transaction.

(c)    Income taxes

The income taxes adjustment is reflecting the income tax effect on the adjustments between Canadian GAAP and US GAAP.

(d)    FAS 130 “Comprehensive Income”

U.S. GAAP establishes standards for reporting and display of comprehensive income (loss) and its components. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Under U.S. GAAP, all components of comprehensive income must be reported in the financial statements in the period in which they are recognized. A total amount for comprehensive income shall be displayed in the financial statements where the components of other comprehensive income are reported.

27.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

As described in note 13, on December 18, 2003, the Company entered into a senior secured credit facility, and issued senior subordinated notes. The senior secured credit facility and the senior subordinated notes (the “Guaranteed Debt”) are fully and unconditionally guaranteed on a joint and several basis by certain of the Company’s subsidiaries (“Guarantor Subsidiaries”). The Guaranteed Debt is not guaranteed by Austrian Subsidiaries which produce Rotax^TM engines, the Finland Subsidiaries which produce Lynx^TM and certain models of Ski-Doo^TM snowmobiles, all other non-domestic subsidiaries and certain immaterial domestic subsidiaries which are either intended to be used for foreign tax planning purposes or are prohibited by law from guaranteeing the Guaranteed Debt (collectively the “Non-Guarantor Subsidiaries”). The following supplemental condensed consolidating financial information sets forth, on an unconsolidated basis, the balance sheet as at January 31, 2004 and the statements of operations and cash flows for the 44-day period then ended for Bombardier Recreational Products Inc. (the “Parent Company”), and on a combined basis for the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. The supplemental condensed consolidating financial information reflects the investments of the Parent Company in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method. The Parent Company’s fair value increments, including applicable intangible assets, arising from the business acquisition in note 2 have been pushed down to the applicable subsidiary columns.

F-67

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

27.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Balance Sheet as at January 31, 2004

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets
Cash	$	56.9		$	44.8		$	94.5	$	—		$	196.2
Receivables		58.6			37.7			57.5		(0.4	)		153.4
Inventories		153.4			115.3			89.9		(6.8	)		351.8
Prepaid expenses		13.8			2.7			2.7		—			19.2
Deferred income taxes		16.9			47.9			2.2		2.7			69.7
Intercompany accounts		181.9			399.2			98.7		(679.8	)		—
Other current assets		36.3			16.7			42.3		(2.2	)		93.1
Total current assets		517.8			664.3			387.8		(686.5	)		883.4
Property, plant and equipment		170.5			174.0			153.4		—			497.9
Goodwill		107.8			(96.6	)		295.8		(214.5	)		92.5
Trademarks		151.1			—			—		—			151.1
Other intangible assets		56.0			34.7			—		—			90.7
Deferred income taxes		12.5			0.6			2.4		—			15.5
Investments in affiliates		343.7			22.5			—		(366.2	)		—
Other long-term assets		35.6			8.1			20.8		—			64.5
	$	1,395.0		$	807.6		$	860.2	$	(1,267.2	)	$	1,795.6
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	263.1		$	199.0		$	180.9	$	(2.7	)	$	640.3
Income taxes payable		1.7			2.2			5.1		—			9.0
Current portion of long-term debt		2.6			1.1			1.3		—			5.0
Intercompany accounts		206.1			120.4			524.9		(851.4	)		—
Other current liabilities		0.2			1.0			2.3		—			3.5
Deferred income taxes		—			—			0.3		—			0.3
Total current liabilities		473.7			323.7			714.8		(854.1	)		658.1
Long-term debt		522.7			112.3			—		—			635.0
Deferred income taxes		—			17.3			0.2		—			17.5
Employee future benefits liability		50.2			1.0			70.7		—			121.9
Redeemable preferred shares		43.2			—			—		—			43.2
Other long-term liabilities		18.2			7.2			5.5		—			30.9
Total liabilities		1,108.0			461.5			791.2		(854.1	)		1,506.6
Shareholder’s equity
Share capital		304.5			345.8			66.4		(412.2	)		304.5
Deficit		(17.5	)		(1.7	)		2.3		(0.6	)		(17.5	)
Currency translation adjustment		—			2.0			0.3		(0.3	)		2.0
	$	1,395.0		$	807.6		$	860.2	$	(1,267.2	)	$	1,795.6

F-68

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

27.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Operations

	For the 44-day period January 31, 2004
	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues	$	214.6		$	209.8		$	97.7		$	(177.1	)	$	345.0
Cost of sales		214.5			183.0			88.8			(167.8	)		318.5
Gross profit		0.1			26.8			8.9			(9.3	)		26.5
Operating expenses
Selling and marketing		6.4			9.7			2.5			—			18.6
Research and development		8.7			0.5			4.1			—			13.3
General and administrative		3.5			7.5			(5.9	)		2.8			7.9
Total operating expenses		18.6			17.7			0.7			2.8			39.8
Operating profit (loss)		(18.5	)		9.1			8.2			(12.1	)		(13.3	)
Interest expense and other		5.2			(1.7	)		2.9			—			6.4
Accretion in carrying value of redeemable preferred shares		0.5			—			—			—			0.5
Net loss on derivative financial instruments		3.3			1.2			—			—			4.5
Unrealized gain on foreign exchange		(1.1	)		(0.2	)		—			—			(1.3	)
Share in earnings of equity accounted investees		(3.0	)		—			—			3.0			—
Loss before income taxes		(23.4	)		9.8			5.3			(15.1	)		(23.4	)
Income tax expense (recovery)		(5.9	)		3.2			—			(3.2	)		(5.9	)
Net loss	$	(17.5	)	$	6.6		$	5.3		$	(11.9	)	$	(17.5	)

F-69

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

27.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Cash Flows

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
OPERATING ACTIVITIES
Net income	$	(17.5	)	$	6.6		$	5.3		$	(11.9	)	$	(17.5	)
Non-cash items:
Depreciation and amortization		6.1			3.7			4.3			—			14.1
Amortization of deferred financing costs		0.7			0.1			—			—			0.8
Deferred income taxes		(9.2	)		2.7			(1.1	)		(1.6	)		(9.2	)
Accretion in carrying value of redeemable preferred shares		0.5			—			—			—			0.5
Unrealized gains on derivative financial instruments		(3.2	)		—			—			—			(3.2	)
Employee future liabilities		1.4			—			0.3			—			1.7
Net changes in non-cash working capital balances related to operations		82.7			18.0			(23.6	)		15.3			92.4
Cash flows from operating activities		61.5			31.1			(14.8	)		1.8			79.6
INVESTING ACTIVITIES
Business acquisition, net of cash acquired		(592.6	)		(138.5	)		(26.1	)		—			(757.2	)
Additions to property, plant and equipment		(11.6	)		(1.7	)		(7.7	)		—			(21.0	)
Investments in affiliates		(320.5	)		(20.0	)		—			340.5			—
Cash flows from investing activities		(924.7	)		(160.2	)		(33.8	)		340.5			(778.2	)
FINANCING ACTIVITIES
Intercompany account		128.6			(251.8	)		125.0			(1.8	)		—
Issuance of common share		304.5			320.5			20.0			(340.5	)		304.5
Issuance of long-term debt		526.4			111.6			—			—			638.0
Repayment of long-term debt		—			—			(0.5	)		—			(0.5	)
Debt issuance costs		(38.0	)		(8.1	)		—			—			(46.1	)
Cash flows from financing activities		921.5			172.2			144.5			(342.3	)		895.9
Effect of exchange rate changes on cash		(1.3	)		1.8			(1.6	)		—			(1.1	)
Net increase in cash		57.0			44.9			94.3			—			196.2
Cash at beginning of period		—			—			—			—			—
Cash at end of period	$	57.0		$	44.9		$	94.3		$	—		$	196.2
Supplemental information
Cash paid for:
Interest	$	1.7		$	0.8		$	0.1		$	—		$	2.6
Income taxes	$	—		$	—		$	1.6		$	—		$	1.6

F-70

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

27.    SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Summary of Differences Between Canadian and U.S. GAAP

As disclosed in note 26, the Consolidated Financial Statements have been prepared in accordance with Canadian GAAP. As well, the supplemental condensed consolidating financial information has been prepared in accordance with Canadian GAAP which differs in certain respects from U.S. GAAP and related rules and regulations by the SEC. Such differences are summarized below.

Reconciliation of Condensed Balance Sheet Captions as at January 31, 2004

	Note		Parent									Non-Guarantor Subsidiaries
			Canadian GAAP			Adjustments			U.S. GAAP			Canadian GAAP		Adjustments			U.S. GAAP
Long-term deferred income tax assets			$	12.5		$	0.1		$	12.6		$	2.4	$	2.2		$	4.6
Other long-term assets	26	(a)		35.6			(0.8	)		34.8			20.8		(8.2	)		12.6
Deficit	26	(b)		(17.5	)		(0.2	)
							(0.5	)		(18.2	)		2.3		(6.0	)		(3.7	)
Currency translation adjustment	26	(b)		—			—			—			0.3		(0.3	)		—
Accumulated other comprehensive income:	26	(c)
Currency translation adjustment				—			—			—			—		0.3			0.3
Redeemable preferred shares	26	(b)		43.2			(43.2	)		—			—		—			—
Mezzanine preferred shares	26	(b)		—			43.2			43.2			—		—			—
Total assets				1,395.0			(0.7	)		1,394.3			860.2		(6.0	)		854.2

Reconciliation of Condensed Statement of Operations and Other Comprehensive Income (loss)

	Note		For the 44-day period January 31, 2004
			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss) under Canadian GAAP			$	(17.5	)	$	6.6		$	5.3		$	(11.9	)	$	(17.5	)
Acquired development costs	26	(a)		(0.9	)		—			(8.4	)		—			(9.3	)
Reversal of amortization of development costs	26	(a)		0.1			—			0.2			—			0.3
Accretion in carrying value of redeemable Preferred shares	26	(b)		0.5			—			—			—			0.5
Total adjustments before the following:				(0.3	)		—			(8.2	)		—			(8.5	)
Income tax recovery				0.1			—			2.2			—			2.3
Total adjustments				(0.2	)		—			(6.0	)		—			(6.2	)
Net income (loss) under US GAAP				(17.7	)		6.6			(0.7	)		(11.9	)		(23.7	)
Change in currency translation adjustment				—			(2.0	)		(0.3	)		0.3			(2.0	)
Comprehensive income (loss) under US GAAP	26	(c)	$	(17.7	)	$	4.6		$	(1.0	)	$	(11.6	)	$	(25.7	)

F-71

BOMBARDIER RECREATIONAL PRODUCTS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the 44-day period ended January 31, 2004

[Tabular figures in millions of Canadian dollars, except for share amounts]

28.    SUBSEQUENT EVENT

a)    Subsidiary Guarantees

At the time of issuance, the senior subordinated notes (the “Notes”) were guaranteed by the Guarantor Subsidiaries. Subsequent to year-end, Bombardier (Mexico) S.A. de C.V., and Bombardier Recreational Products Japan Co. Ltd., both of which were Non-Guarantor Subsidiaries as at January 31, 2004, guaranteed the Notes through supplemental indentures dated as of March 12, 2004.

b)    Management Share Subscription Agreement and Stock Option Plan

On March 31, 2004, the board of directors of J.A.B. approved a management share subscription agreement for directors, officers and certain employees of the Company (the “subscribers”) and a stock option plan for directors, officers and employees (“participants”) of the Company. Under the management share subscription agreement, the subscribers purchased 6,595,180 Class B common shares (the “subscription shares”) of J.A.B. for an amount equal to their fair value. The net proceeds of $6.6 million were then transferred by J.A.B. to the Company, and were accounted for by the Company as an increase in shareholder’s equity. The terms of the management subscription agreement provide J.A.B. with the right to repurchase all or a portion of the subscription shares (a ”call option”), and provide the subscribers with a right to sell to J.A.B. all or a portion of their subscription shares (a “put option”), under certain circumstances. The call option and put option expires on the occurrence of an Initial Public Offering (“IPO”) by the Company or upon a change in control.

Also on March 31, 2004, the board of directors of J.A.B. approved a grant of 19,785,540 options. The options are exercisable into Class B common shares of J.A.B. at an exercise price equal to the fair market value of the Class B shares on the date of grant, and are exercisable for a period of up to 10 years. One-third of the options granted vest in equal annual installments on each of the five anniversary dates of December 18, 2003. The remaining two-thirds become eligible to vest in equal annual installments on each of the five anniversary dates of December 18, 2003, and shall only vest upon certain performance measures being achieved upon either a change in control or an IPO.

The Company will record compensation expense using the fair value method, for these grants of stock options by J.A.B. that are expected to vest, over the expected vesting period of the option with a corresponding amount recorded as contributed surplus.

The estimated fair value of these options granted on March 31, 2004, which assumes that all performance measures will likely be achieved, is approximately $10.4 million. Fair value is estimated at the grant date based on a Black-Scholes option-pricing model using the following assumptions:

Risk-free interest rate	3.98	%
Expected life	10 years
Expected volatility	35	%
Dividend yield	0	%

c)    Interest rate swap

On February 19, 2004, in order to manage its exposure to interest rate risk, the Company entered into an interest rate swap on its term loan for a notional amount of U.S.$70 million in order to fix the interest rate. The swap involves the exchange of floating LIBOR rate for a fixed rate of 2.525%. Including the applicable margin on the U.S. terms loans of 3.0%, the effective interest rate on U.S.$70 million of the term loan will be 5.525%. The swap expires on February 9, 2007.

F-72

AUDITORS’ REPORT

To the Directors of

Bombardier Recreational Products Inc.

We have audited the balance sheets of Bombardier Recreational Products (a reportable segment of Bombardier Inc.) [“BRP”] as at December 18, 2003 and January 31, 2003 and the statements of operations, changes in Bombardier Inc.’s net investment and cash flows for the 321-day period ended December 18, 2003 and for each of the years in the two-year period ended January 31, 2003. These financial statements are the responsibility of BRP’s Management. Our responsibility is to express an opinion on these Financial Statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation.

In our opinion, these Financial Statements present fairly, in all material respects, the financial position of BRP as at December 18, 2003 and January 31, 2003 and the results of its operations and its cash flows for the 321-day period ended December 18, 2003 and for each of the years in the two-year period ended January 31, 2003 in accordance with Canadian generally accepted accounting principles.

As discussed in note 3, BRP changed its method of accounting for sales promotions and incentive programs. These Financial Statements include the effect of this change in accounting policy as well as additional disclosures.

BRP includes a division of Bombardier Inc. that has no separate legal status or existence.

Montréal, Canada

May 21, 2004. Chartered Accountants

F-73

Bombardier Recreational Products

[see basis of presentation]

BALANCE SHEETS

As at

[millions of Canadian dollars]

	Notes	December 18, 2003		January 31, 2003
ASSETS
Current Assets
Cash		$	140.2	$	28.7
Receivables, net of allowance for doubtful accounts of $4.0 and $7.6 as at December 18, 2003 and January 31, 2003 respectively	4, 6		152.8		60.1
Due from and advances to related parties	4		34.9		73.3
Inventories	7		406.7		340.9
Prepaid expenses			12.8		13.3
Derivative financial assets	17		4.1		—
Deferred income taxes	15		70.3		69.7
Total current assets			821.8		586.0
Property, plant and equipment	8		424.4		464.2
Deferred income taxes	15		17.8		18.7
Other long-term assets, including restricted investments of $12.6 as at December 18, 2003 and January 31, 2003	9		64.5		66.0
		$	1,328.5	$	1,134.9
LIABILITIES AND BOMBARDIER INC.’S NET INVESTMENT
Current Liabilities
Accounts payable and accrued liabilities	10	$	579.9	$	613.8
Income taxes payable			3.8		3.7
Due to and advances from related parties	4		66.9		251.1
Current portion of long-term debt	11		1.4		1.7
Other short-term liabilities			2.9		3.0
Total current liabilities			654.9		873.3
Long-term debt	11		2.5		1.8
Deferred income taxes	15		14.6		7.3
Employee future benefits liability	18		71.1		72.1
Other long-term liabilities			7.6		10.2
Total liabilities			750.7		964.7
Bombardier Inc.’s net investment			577.8		170.2
		$	1,328.5	$	1,134.9
Commitments and contingencies	19

The accompanying notes are an integral part of these Financial Statements.

On behalf of the Board:

Director Director

F-74

Bombardier Recreational Products

[see basis of presentation]

STATEMENTS OF OPERATIONS

For the

[millions of Canadian dollars]

	Notes	321-day period ended December 18, 2003		Year ended January 31, 2003		Year ended January 31, 2002
Revenues	4	$	2,147.1	$	2,476.3	$	2,020.0
Cost of sales	4		1,738.3		1,913.3		1,560.5
Gross profit			408.8		563.0		459.5
Operating expenses
Selling and marketing			147.2		166.3		136.4
Research and development	13		97.2		106.3		100.4
General and administrative	4		115.7		120.6		128.3
Total operating expenses			360.1		393.2		365.1
Operating profit			48.7		169.8		94.4
Net interest expense and other	14		3.2		4.9		4.1
Income before income taxes			45.5		164.9		90.3
Income tax expense	15		15.3		50.1		23.7
Net income		$	30.2	$	114.8	$	66.6

The accompanying notes are an integral part of these Financial Statement.

F-75

Bombardier Recreational Products

[see basis of presentation]

STATEMENTS OF CASH FLOWS

For the

[millions of Canadian dollars]

	Notes	321-day period ended December 18, 2003			Year ended January 31, 2003			Year ended January 31, 2002
OPERATING ACTIVITIES
Net income		$	30.2		$	114.8		$	66.6
Non-cash items:
Depreciation and amortization			91.6			97.4			69.8
Deferred income taxes	15		0.4			41.4			(54.4	)
Loss (gain) on disposal of property, plant and equipment			1.0			(4.7	)		(2.1	)
Gain on disposal of other assets			(2.4	)		—			—
Reduction in value of other assets			—			—			9.8
Unrealized gains on derivative financial instruments	17		(4.1	)		—			—
Deferred foreign exchange gain on forward contracts	17		7.4			—			—
Net changes in non-cash working capital balances related to operations	16		(205.2	)		(33.5	)		88.2
Cash flows from operating activities			(81.1	)		215.4			177.9
INVESTING ACTIVITIES
Additions to property, plant and equipment			(73.8	)		(97.7	)		(194.7	)
Proceeds on disposal of property, plant and equipment			1.4			12.6			2.3
Proceeds on disposal of other assets			4.1			—			—
Business acquisition, net of cash acquired	5		—			—			(136.8	)
Other long-term assets			(7.1	)		(11.3	)		(30.2	)
Cash flows from investing activities			(75.4	)		(96.4	)		(359.4	)
FINANCING ACTIVITIES
Net variation in advances (to) from related parties	4		(118.0	)		16.0			228.0
Net distribution from (to) Bombardier Inc.			367.8			(140.7	)		(32.4	)
Issuance of long-term debt	11		2.0			—			—
Repayment of long-term debt			(1.6	)		(3.3	)		(3.0	)
Other liabilities			(2.6	)		9.8			0.1
Cash flows from financing activities			247.6			(118.2	)		192.7
Effect of exchange rate changes on cash			20.4			10.9			(5.3	)
Net increase in cash			111.5			11.7			5.9
Cash at beginning of period			28.7			17.0			11.1
Cash at end of period		$	140.2		$	28.7		$	17.0
Supplemental information
Cash paid for:
Interest		$	3.2		$	4.9		$	4.1
Income taxes		$	5.4		$	4.6		$	22.1

The accompanying notes are an integral part of these Financial Statements.

F-76

Bombardier Recreational Products

[see basis of presentation]

STATEMENTS OF CHANGES IN BOMBARDIER INC.’S NET INVESTMENT

For the

[millions of Canadian dollars]

	Notes	321-day period ended December 18, 2003		Year ended January 31, 2003			Year ended January 31, 2002
Balance at beginning of period		$	170.2	$	178.1		$	142.3
Net income			30.2		114.8			66.6
Net change in currency translation adjustment	20		9.6		18.0			1.6
Net distribution from (to) Bombardier Inc.			367.8		(140.7	)		(32.4	)
Balance at end of period		$	577.8	$	170.2		$	178.1

The accompanying notes are an integral part of these Financial Statements.

F-77

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

1.    NATURE OF OPERATIONS

Bombardier Inc. (“Bombardier”) is a publicly traded company conducting business in the aerospace, transportation, recreational products and financing segments.

Bombardier Recreational Products (“BRP”) was a reportable segment of Bombardier. BRP through its Power Sports, Marine Engines and Utility Vehicles Segments, develops manufactures and sells snowmobiles, watercraft, all-terrain vehicles, outboard engines, sport boats, recreational and small aircraft engines, snow-grooming equipment and multi-purpose tracked vehicles. BRP’s products are sold mainly through an international network of independent dealers, distributors and original equipment manufacturers. BRP manufactures its products, primarily in North America and certain European countries.

2.    BASIS OF PRESENTATION

These Financial Statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). The Financial Statements as at and for the 321-day period ended December 18, 2003 have been prepared in accordance with Canadian GAAP applicable to interim financial statements and follow the same accounting policies and methods in their application as the most recent annual Financial Statements except for the following:

Deferred production costs:

Manufacturing costs variances that are planned and are expected to be absorbed by the end of the annual period are deferred at interim reporting dates and included in inventory. The amount as at December 18, 2003 is $8.2 million, reducing the finished products.

All disclosures required for annual financial statements have been included in these Financial Statements as at and for the 321-day period ended December 18, 2003.

As further described in note 22, these accounting principles differ in certain respects from those that would have been followed had these Financial Statements been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and the related rules and regulations adopted by the United States Securities and Exchange Commission (“SEC”). The Financial Statements present the historical financial position, results of operations and cash flows of BRP on a carve out basis from Bombardier. BRP’s operations include the recreational products activities carried out as a division of Bombardier as well as those carried out by the following wholly-owned subsidiaries of Bombardier:

Bombardier Recreational Products Australia Pty Limited	Australia
Bombardier-Rotax GmbH & Co. KG (partnership)	Austria
Bombardier Recreational Products Europe N.V.	Belgium
Bombardier Recreational Products Motores Da Amazonia Ltda.	Brazil
Bombardier Recreational Products Brazil Ltda.	Brazil
Bombardier Nordtrac Oy	Finland
Bombardier Recreational Products Asia Limited	Hong Kong
Bombardier Recreational Products Japan Co., Limited	Japan
Bombardier Mexico, S.A. de C.V.	Mexico
Bombardier Nordtrac AS	Norway
Bombardier Nordtrac Aktiebolag	Sweden
Bombardier Direct Corporation	United States
Bombardier Motor Corporation of America	United States

F-78

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

2.    BASIS OF PRESENTATION (continued)

All intercompany transactions and balances within BRP have been eliminated on consolidation. Debt or receivables with Bombardier that are evidenced by separate legal contracts or invoices are presented separately in due from and advances to related parties or due to and advances from related parties. Bombardier’s net investment comprises all other intercompany transactions including the accumulated earnings of BRP, contributions by, less distributions to Bombardier and currency translation adjustments. The assets of BRP are available for the debts, contingent liabilities and commitments of Bombardier, and not just for those liabilities presented in the accompanying balance sheets.

In the opinion of Management, these Financial Statements present fairly BRP’s financial position, results of operations and cash flows, including an allocated portion of Bombardier’s corporate office, employee benefit and income tax charges. However, they are not necessarily indicative of the financial position, results of operations and cash flows that might have occurred had BRP operated and been financed as a stand alone business or of the future financial position, results of operations and cash flows of BRP.

For purposes of preparing these Financial Statements, Management has made the following cost allocations:

Corporate office charges

Bombardier corporate office charges and other costs, including the costs of its human resource, legal, treasury, insurance, finance, internal audit, strategy and public affairs departments are allocated to its segments mainly based on each segment’s revenues. Management believes that this method provides a reasonable allocation of the costs attributable to BRP.

Employee future benefits

Bombardier sponsors several defined benefit registered and non-registered pension plans and other post-retirement benefit plans for its employees. Certain BRP employees are part of Bombardier plans covering employees of multiple segments (common plans). A portion of the costs of Bombardier’s common plans were allocated to BRP based on a pro-rata share of the plan obligations as at December 31, 2002, except for the amounts related to prior plan improvements specific to BRP employees, which were allocated entirely to BRP. Management believes that this method provides a reasonable allocation of the employee future benefits costs attributable to BRP operations.

Interest

Most of Bombardier’s capitalization requirements have historically been centralized through Bombardier’s head office treasury functions. Given that Bombardier did not specifically borrow to finance BRP’s operations, it is impracticable to distinguish the debt component of BRP’s capital structure. Additionally, as a result of this, no interest was allocated to property, plant and equipment. These Financial Statements assume BRP’s capitalization in the form of equity, and consequently do not include an allocation of Bombardier’s common interest costs.

F-79

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

2.    BASIS OF PRESENTATION (continued)

Income taxes

Income taxes are calculated as if all of BRP operations had been separate tax paying legal entities, each filing a separate tax return in its local tax jurisdiction and giving effect to any tax sharing agreements with Bombardier.

3.    SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

The preparation of financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related amounts of revenues and expenses and, disclosure of contingent assets and liabilities. Significant areas requiring the use of management estimates relate to the determination of fair value of assets acquired and liabilities assumed in business combinations, determination of pension and other employee benefits, net realizable value of inventory, promotion and incentive program accruals, provision for product warranty, reserves for environmental matters, the useful life of assets subject to amortization and evaluation of net recoverable amounts, provisions for income taxes, and the determination of the fair value of financial instruments. Actual results could differ from these estimates, and such differences could be material.

Translation of foreign currencies

Foreign operations are classified as self-sustaining or integrated.

a)    Self-sustaining foreign operations

All assets and liabilities are translated at exchange rates in effect at year end. Revenues and expenses are translated at the average exchange rates for the period. The resulting net gains or losses are part of “Net change in currency translation adjustment” included in Bombardier Inc.’s net investment.

b)    Accounts in foreign currencies

Accounts in foreign currencies, including integrated foreign investees, are translated using the temporal method. Under this method, monetary balance sheet items are translated at the exchange rates in effect at year end and non-monetary items are translated at historical exchange rates. Revenues and expenses (other than depreciation and amortization, which are translated at the same exchange rates as the related assets) are translated at the exchange rates in effect on the transaction dates or at the average exchange rates of the period. Translation gains or losses are included in the statements of operations.

Allowance for doubtful accounts

BRP provides a reserve for doubtful accounts based on historical rates and trends. This reserve is adjusted periodically as information about specific accounts becomes available.

F-80

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Sales of account receivables

BRP sells receivables to third parties and affiliated companies. Transfers of accounts receivables are recognized as sales when BRP is deemed to have surrendered control over these assets and consideration other than beneficial interest in the transferred assets was received by BRP. When the transfer is considered a sale, BRP derecognizes all assets sold, recognizes at fair value the assets received and the liabilities incurred and records a gain or loss on the sale. Such gain or loss depends in part on the previous carrying amount of the financial assets involved in the transfer, allocated between the assets sold and the retained interests based on their relative fair values at the date of transfer. The retained interest presented in note 4 (c) represents the difference between the carrying value of the receivables transferred to an affiliated company and the proceeds received.

Retained interests are accounted for as investments in accordance with their substance and are included with due from and advances to related parties on the balance sheets. When the carrying value exceeds the fair value of the retained interests accounted for as investments, and the decline in value is other than temporary, the retained interest is written down to the fair value in the same period. The excess of all cash flows attributable to the retained interest estimated at the date of transfer of the receivables over the initial investment is recognized as interest income over the life of the retained interest using the effective yield method.

Inventory valuation

Raw materials and work in process, finished products and parts and accessories are valued at the lower of cost (specific cost, average cost or first-in, first-out) and replacement cost (raw materials) or net realizable value. The cost of work in process and finished products includes the cost of raw materials, direct labor and related manufacturing overhead.

Income taxes

Income taxes are provided for using the liability method. Under this method, deferred income tax assets and liabilities are determined based on all significant differences between the carrying amounts and tax bases of assets and liabilities using substantively enacted tax rates and laws expected to be in effect when the differences reverse.

Property, plant and equipment

Property, plant and equipment are recorded at cost and are depreciated on a straight-line basis over the following estimated useful lives:

Equipment	2 to 15 years
Buildings	10 to 40 years
Tooling	2 to 7 years

Depreciation of assets under construction begins when they are ready for their intended use.

Pre-operating costs

Pre-operating costs are expensed as incurred.

F-81

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Development costs

BRP capitalizes development costs on certain projects, mainly for the development of engines, when specific criteria are met and their recovery is reasonably assured. Development costs are amortized from the beginning of commercial production based on the number of units to be delivered over a maximum period of five years. When the criteria which previously justified the deferral of costs is no longer met, the unamortized balance is reduced to its net recoverable amount by way of an additional current period amortization charge. Net recoverable amount is defined as each project’s estimated related future revenues, less estimated production, selling and administrative costs and any additional development costs to be incurred. Research costs are expensed as incurred.

Investments-restricted

Investments-restricted are recorded at cost and consist of securities with various maturities. Reductions in value, other than temporary, are recorded as a charge in the period in which they occur.

Employee future benefits

The cost of pension and other post-retirement benefits earned by employees under Bombardier common plans and separate BRP plans is actuarially determined using the projected benefit method and Management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and health care costs. Plan obligations are determined based on expected future benefit payments discounted using current market interest rates and plan assets are presented at fair value. The net actuarial gains and losses over 10% of the greater of the benefit obligation and the fair value of plan assets is amortized to income over the estimated average remaining service life of participants of approximately 16 years.

Patent rights

Patent rights are recorded at cost and are amortized over their estimated useful lives on a straight-line basis over four years. Management assesses the fair value of the patent rights on an annual basis for impairment, in the same manner as disclosed under impairment of long-lived assets.

Revenue recognition

Revenues are recognized when title passes upon delivery of products to customers and collection is reasonably assured. Product returns, within the normal course of business or resulting from repossession under BRP’s customer financing programs, have not been material. BRP provides for estimated cash sales promotions and incentive program expenses, which are recognized as a reduction of revenues at the latter of delivery of products to customers or the announcement of sales promotion and incentive programs.

Sales promotions and incentive programs

BRP prospectively adopted, for sales promotions and incentive programs initiated after February 1, 2002, the requirements of Emerging Issues Task Force (EITF) Issue 01-09 published in November 2001 by the Financial Accounting Standards Board in the United States.

F-82

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

Sales promotion and incentive programs include dealer and distributor rebates, volume discounts and retail financing programs. Under the new method, BRP generally provides for estimated sales promotion and incentive expenses at the later of revenue recognition or the announcement of sales promotion and incentive programs. Sales promotion and incentive expenses are estimated based on current programs and historical rates for each product line. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the customer usage rate varies from historical trends. Based on the historical experience of BRP, sales promotion and incentive expenses have been within expectations and differences have not been material.

Prior to fiscal year 2003, these sales promotions and incentive programs were provided for at the time that Management determined that the sales promotions and incentive programs were necessary, which was generally before the announcement to customers. Had BRP provided for its sales promotion and incentive programs under its current method, the impact on fiscal years 2003 and 2002 results of operations would have been a decrease in net income of $13.6 million and an increase in net income of $0.8 million respectively. The impact on Bombardier Inc.’s net investment as at February 1, 2001 would have been an increase of $12.8 million.

Cash sales promotions and incentive programs are recorded as reduction of revenues and promotions and incentive programs consisting of free products or services are recorded as cost of sales.

Shipping and handling costs

BRP records shipping and handling costs as a component of cost of sales at the time the product is shipped.

Advertising costs

BRP expenses advertising costs as incurred. Total advertising expense amounted to $69.7 million, $82.7 million, and $70.2 million for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002, respectively.

Dealer holdback programs

BRP provides dealer incentive programs whereby at the time of shipment, BRP invoices an amount to the dealer that is reimbursable upon ultimate sale of the product. BRP records these amounts as a liability on the balance sheets.

Product warranties

BRP provides limited product warranties covering periods from six months to three years for primarily all product lines. However, in certain geographical markets, BRP provides longer warranties as determined by local regulations and market conditions. In addition, BRP provides certain extended product warranties. BRP’s standard warranties allows its customers to repair or replace defective products at the expense of BRP during such warranty period at no cost to the consumer. The warranty provision is established at the time of sale based on Management’s best estimate, using historical rates and trends. Adjustments to the warranty provision are

F-83

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

3.    SIGNIFICANT ACCOUNTING POLICIES (continued)

made from time to time as actual claims materialize. Factors that could have an impact on the warranty accrual in any given year include the following: manufacturing quality, shifts in product mix, changes in warranty coverage periods, snowfall and its impact on snowmobile usage, product recalls and any significant changes in sales volume.

Research and development credits

Research and development (R&D) tax credits are deducted from R&D expense for items of an operating nature and are deducted from the related assets for items of a capital nature.

Stock-based compensation and other stock-based payments

Effective February 1, 2002, BRP prospectively adopted the new accounting recommendations published by the Accounting Standards Board relating to stock-based compensation and other stock-based compensation made in exchange for goods and services. The adoption of the new recommendations had no effect on the statements of operations, financial position and cash flows of BRP.

Under Bombardier share option plans, options are granted to key employees and directors to purchase Class B Shares (Subordinate Voting). BRP employees participate in the share option plan for key employees. The issuance of options to BRP employees does not give rise to compensation expense in BRP’s statements of operations. BRP discloses pro forma net income using the fair value based method (see note 12).

BRP’s contributions to the employee share purchase plan of Bombardier are accounted for in the same manner as the related employee payroll costs.

Impairment of long-lived assets

BRP periodically evaluates the carrying value of long-lived assets, to be held and used, including property, plant and equipment and patent rights subject to amortization, when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability test is performed using undiscounted future net cash flows that are directly associated with the asset’s use and eventual disposition. The amount of the impairment, if any, is measured as the difference between the carrying value and the fair value of the impaired assets and presented as an additional current period depreciation and amortization charge.

Environmental obligations

Liabilities are recorded when environmental claims or remedial efforts are probable, and the costs can be reasonably estimated. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to future revenue generation, are expensed.

Derivative financial instruments

Bombardier enters into foreign exchange contracts on behalf of BRP to mitigate foreign currency risks and exposures in connection with future transactions of BRP. These foreign exchange contracts are presented in these Financial Statements as if BRP was the counterparty. Gains and losses on foreign exchange contracts are deferred and included in the measurement of the related foreign currency transactions.

F-84

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

4.    RELATED PARTY TRANSACTIONS

BRP is a party to various related party transactions carried out in the normal course of business. In addition to other related party transactions disclosed elsewhere in the Financial Statements, related party transactions are described below. All transactions are measured at their exchange amount. The method used for parent company allocations is described in note 2.

a)     Parent company allocations

	321-day period ended December 18, 2003		Year ended January 31, 2003		Year ended January 31, 2002
Allocation of corporate office charges	$	12.6	$	11.3	$	12.1
Allocation of employee future benefits costs		21.1		16.3		11.2
	$	33.7	$	27.6	$	23.3

Corporate office charges are included in general and administrative expenses. Employee future benefits costs are allocated to the same line items as the respective salary expense.

b)    Intercompany transactions

	321-day period ended December 18, 2003		Year ended January 31, 2003		Year ended January 31, 2002
Insurance charges	$	6.8	$	6.5	$	6.3
Fees in connection with floorplan financing		23.6		25.8		25.5
Loss in connection with sales of receivables		2.4		5.3		5.9
Rental expense		2.5		4.1		2.8
Other		0.9		0.9		0.6
	$	36.2	$	42.6	$	41.1

• Bombardier negotiates and enters into insurance contracts with insurers with respect to various risks. It then charges BRP for its portion of these costs. These amounts are mainly included in general and administrative expenses.

• Bombardier Capital (BC) provides floorplan financing in connection with the sale of BRP products. BRP pays financing charges as a sales incentive for a pre-determined period on behalf of some of its customers to BC. These sales incentives include interest and other costs and are presented as a reduction of revenues. In the event of dealer default, BC may require BRP to repurchase new and unused products at the total unpaid principal balance due to BC. Any loss on the resale of the repurchased products is the responsibility of BRP. No material losses have been incurred under this agreement during the periods presented. The total amount of floorplan financing provided was $1.2 billion for the 321-day period ended December 18, 2003 ($1.5 billion for the year ended January 31, 2003 and $1.3 billion for the year ended January 31, 2002). The amounts outstanding as at December 18, 2003 and at January 31, 2003 were $761.3 million and $928.1 million, respectively.

F-85

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

4.    RELATED PARTY TRANSACTIONS (continued)

• The total amount of receivables sold was $379.8 million for the 321-day period ended December 18, 2003 ($555.1 million for the year ended January 31, 2003 and $373.3 million for the year ended January 31, 2002) of which the amounts outstanding as at December 18, 2003 and January 31, 2003 were $74.1 million and $147.0 million, respectively. A portion of the amount of receivables sold are subject to the repurchase of new and unused products at the total unpaid principal balance due to BC, in the event of dealer default. The amount outstanding subject to repurchase as at December 18, 2003 and January 31, 2003 totalled $74.1 million and $87.6 million, respectively. The loss in connection with sales of receivables are included in the cost of sales.

• BRP is also renting a building from Bombardier Trust and equipment from BC. The rental expense is included in general and administrative for the building and in cost of sales for the equipment expenses on the statements of operations.

c)    Due from and advances to related parties

	December 18, 2003		January 31, 2003
Advances – Affiliated	$	—	$	37.5
Investment in retained interest in sales of transferred receivables		—		24.4
Other		34.9		11.4
	$	34.9	$	73.3

The advances include only the advances provided under separate legal agreements with wholly-owned subsidiaries of Bombardier. They are repayable on demand and the weighted average interest rates was 3.2% as at January 31, 2003.

Other amounts due from and advances to related parties are generally provided in connection with normal business operations and are generally short-term in nature.

d)    Due to and advances from related parties

	December 18, 2003		January 31, 2003
Advances – Parent	$	—	$	34.5
Advances – Affiliated		59.7		195.6
Other		7.2		21.0
	$	66.9	$	251.1

Advances from parent and affiliated companies include the advances received under separate legal agreements with wholly-owned subsidiaries of Bombardier and are not representative of the total funding provided by Bombardier. While these advances were generally provided for investment and working capital purposes, they are included in current liabilities in accordance with the terms of these agreements. The variation in these advances is presented under Financing activities in the statements of cash flows.

The weighted average interest rates on the advances from parent and affiliated companies were 1.7% as at December 18, 2003 and January 31, 2003.

F-86

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

4.    RELATED PARTY TRANSACTIONS (continued)

Other amounts due to and advances from related parties are generally provided in connection with normal business operations and are generally short-term in nature.

e)    Treasury function

Bombardier performs centralized treasury functions whereby cash balances are generally transferred on a daily basis to Bombardier. Bombardier issued letters of credit on behalf of BRP totalling $54.5 as at December 18, 2003 ($35.5 million as at January 31, 2003). Bombardier’s bank and bond indebtedness is procured on an unsecured basis with negative pledge prohibitions that do not permit an encumbrance of its assets.

f)    Sales of snow grooming equipment

BRP sells snow grooming equipment to BC, who in turn leases it to the ultimate customer [see note 19]. Total sales of snow grooming equipment to BC for the 321-day period ended December 18, 2003 and for fiscal years 2003 and 2002 were $15.3 million, $19.7 million and $25.1 million, respectively.

5.    BUSINESS ACQUISITIONS

Outboard Marine Corporation

On March 9, 2001, BRP acquired most of the net assets of the U.S. operations of Outboard Marine Corporation (OMC) for a cash consideration of US$53.8 million ($83.3 million), before acquisition costs of $3.8 million. These assets included the Johnson and Evinrude outboard marine engine brands and Ficht fuel-injection technology. During fiscal year 2002, BRP also acquired, for a cash consideration of $34.3 million, certain net assets relating to a portion of the international business of OMC and net assets in relation to a research and development center for a cash consideration of $15.4 million.

These acquisitions have been recorded under the purchase method of accounting and the related operating results are combined as of the respective acquisition dates.

Total net assets acquired at fair value
Receivables	$	10.0
Inventories		88.4
Property, plant and equipment		112.0
		210.4
Accounts payable and accrued liabilities		(73.6	)
Purchase consideration	$	136.8

6.    RECEIVABLES

a)    Sales of receivables

In addition to the intercompany transactions disclosed in note 4, BRP also sells receivables to third parties. The fair value of the receivables sold approximates their carrying value at the time of sale. The total

F-87

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

6.    RECEIVABLES (continued)

amount of receivables sold to third parties was $201.0 million for the 321-day period ended December 18, 2003 ($150.0 million and $128.8 million for the years ended January 31, 2003 and January 31, 2002, respectively). The amounts outstanding as at December 18, 2003 and January 31, 2003 were $53.8 million and $63.6 million, respectively. A portion of the amount of receivables sold are subject to the repurchase of new and unused products, in the event of dealer default, at the total unpaid principal balance due. The amount outstanding subject to repurchase as at December 18, 2003 totaled $20.8 million and $33.1 million as at January 31, 2003.

b)    Allowance for doubtful accounts

The change in BRP’s allowance for doubtful accounts is as follows:

	321-day period ended December 18, 2003			Year ended January 31, 2003
Balance at beginning of period	$	7.6		$	10.1
Bad debt expense		3.2			0.1
Uncollectible accounts written-off, net of recovery		(6.2	)		(1.6	)
Change in estimate		—			(0.8	)
Effect of foreign currency exchange rate changes		(0.6	)		(0.2	)
Balance at end of period	$	4.0		$	7.6

7.    INVENTORIES

	December 18, 2003		January 31, 2003
Raw materials and work in process	$	167.0	$	141.0
Finished products		152.7		113.0
Parts and accessories		87.0		86.9
	$	406.7	$	340.9

8.    PROPERTY, PLANT AND EQUIPMENT

	December 18, 2003						January 31, 2003
	Cost		Accumulated depreciation		Net book value		Cost		Accumulated depreciation		Net book value
Equipment	$	494.7	$	320.0	$	174.7	$	528.7	$	314.2	$	214.5
Tooling		214.9		116.8		98.1		199.9		97.5		102.4
Buildings		206.8		84.5		122.3		198.6		80.0		118.6
Land		29.3		—		29.3		28.7		—		28.7
	$	945.7	$	521.3	$	424.4	$	955.9	$	491.7	$	464.2

Included in the above are assets under construction amounting to $11.6 million as at December 18, 2003 ($10.9 million as at January 31, 2003). Depreciation of property, plant and equipment for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002 was $86.4 million, $91.6 million and $66.6 million, respectively.

F-88

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

9.    OTHER LONG-TERM ASSETS

	December 18, 2003		January 31, 2003
Development costs	$	40.3	$	37.9
Investments – restricted [1]		12.6		12.6
Patent rights		6.2		8.9
Accrued benefit asset		1.2		2.8
Other		4.2		3.8
	$	64.5	$	66.0

[1] Investments can only be used for severance payments and pension costs associated with Bombardier-Rotax GmbH & Co. KG pension plans, and are not available for general corporate use and are, therefore, classified as restricted long-term assets which are designated as held to maturity.

Amortization of development costs for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002 was $2.5 million, $2.7 million and $2.2 million, respectively. Amortization of patent rights for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002 was $2.7 million, $3.1 million and nil, respectively.

10.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	December 18, 2003		January 31, 2003
Accounts payable	$	295.2	$	338.7
Accrued liabilities		67.0		61.7
Payroll related liabilities		54.3		58.5
Warranty provision		78.0		72.1
Sales promotions and incentive programs		51.8		48.8
Dealer holdback programs		26.2		34.0
Deferred foreign exchange gain on forward contracts [note 17]		7.4		—
	$	579.9	$	613.8

The change in BRP’s accrued warranty provision is as follows:

	321-day period ended December 18, 2003			Year ended January 31, 2003
Balance at beginning of period	$	72.1		$	104.2
Expensed during the period		36.1			41.6
Change in estimate		15.2			(31.3	)
Claims paid during the period		(41.1	)		(46.6	)
Effect of foreign currency exchange rate changes		(4.3	)		4.2
Provision at end of period	$	78.0		$	72.1

F-89

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

11.    LONG-TERM DEBT

BRP’s long-term debt and average rates and maturities are as follows:

	December 18, 2003				January 31, 2003
	$		Average Rate		$		Average Rate
Euro-denominated debt	1.9		5.2	%	3.5		5.0	%
U.S. denominated debt	2.0		2.0	%	—		—
	3.9				3.5
Current portion	(1.4	)			(1.7	)
Long-term portion	2.5				1.8

The repayment requirements on the long-term debt for the next five years ended January 31, are as follows:

	$
2004 (from December 19, 2003 to January 31, 2005)	1.4
Thereafter 2008	2.5
	3.9

12.    SHARE-BASED PLANS

Employee share purchase plan

Under the Employee Share Purchase Plan of Bombardier, employees of BRP may set aside funds through payroll deductions up to a maximum of 20% of their base salary to a yearly maximum of $30,000 per employee. BRP’s contributions to the plan are paid to Bombardier at an amount equal to 20% of the employees’ contributions and are expensed as incurred in the same manner as the related employee payroll costs. The contributions are used to purchase Bombardier’s Class B Shares (Subordinate Voting) in the open market. BRP’s contributions to the plan for the 321-day period ended December 18, 2003 amounted to $0.9 million ($1.4 million for the year ended January 31, 2003 and $1.5 million for the year ended January 31, 2002).

Share option plans

Under Bombardier share option plans, options were granted to key employees and directors to purchase Class B Shares (Subordinate Voting) of Bombardier. The exercise price is equal to the average of the closing prices on the stock exchange during the five trading days preceding the date on which the option was granted. These options vest at 25% per year during a period commencing two years following the grant date. The options terminate no later than 10 years after the grant date.

F-90

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

12.    SHARE-BASED PLANS (continued)

The summarized information on options issued and outstanding and exercisable with respect to BRP employees as at December 18, 2003 is as follows:

Issued and outstanding				Exercisable
Exercise price range	Number of options	Average remaining life (years)	Average exercise price	Number of options	Average exercise price
$0 to $5	366,666	2.01	4.75	366,666	4.75
$6 to $10	1,266,000	4.75	9.48	856,125	9.01
$11 to $15	367,500	8.14	14.38	10,000	11.00
$16 to $20	848,000	6.82	19.31	136,750	18.84
$21 to $25	269,250	7.17	23.02	9,813	24.84
	3,117,416			1,379,354

The number of options has varied as follows:

	December 18, 2003				January 31, 2003
	Number of options		Average exercise price		Number of options		Average exercise price
Balance at beginning of period	3,336,416		$	13.22	3,152,666		$	12.75
Granted	—			—	395,000			14.58
Transferred from (to) another reportable segment of Bombardier	—			—	(78,750	)		13.37
Exercised	—			—	(80,000	)		2.64
Cancelled	(219,000	)		14.24	(52,500	)		14.83
Balance at end of period	3,117,416			13.15	3,336,416		$	13.22
Options exercisable at end of period	1,379,354			8.98	1,531,604		$	8.86

There were no options granted during the 321-day period ended December 18, 2003.

The weighted average grant date fair value of options granted during the year ended January 31, 2003, amounted to $5.13 per option. The fair value of each option granted was determined using the Black-Scholes option pricing model and the following weighted average assumptions:

Risk-free interest rate	5.43	%
Expected life	6 years
Expected volatility in the market price of the shares	28.3	%
Expected dividend yield	0.90	%

If the share options granted in the year January 31, 2003 under the plan had been accounted for based on the fair value method using the Black-Scholes option pricing model, net income for the 321-day period ended December 18, 2003 would have decreased by $0.6 million. The pro forma figures do not give effect to the stock options granted prior to February 1, 2003.

F-91

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

13.    RESEARCH AND DEVELOPMENT EXPENSES

R&D expenses are presented net of R&D tax credits and other government assistance of $13.7 million, $16.8 million and $12.7 million for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002, respectively.

14.    NET INTEREST EXPENSE AND OTHER

	321-day period ended December 18, 2003		Year ended January 31, 2003		Year ended January 31, 2002
Interest on long-term debt	$	0.2	$	0.1	$	0.3
Advances from related parties		2.7		4.4		4.7
Other		0.3		0.4		(0.9	)
	$	3.2	$	4.9	$	4.1

15.    INCOME TAXES

The reconciliation of income taxes computed at the Canadian statutory rates to income tax expense was as follows:

	321-day period ended December 18, 2003			Year ended January 31, 2003			Year ended January 31, 2002
	$		%	$		%	$		%
Income taxes calculated at statutory rates	15.1		33.2	58.0		35.2	33.6		37.2
Increase (decrease) resulting from:
Manufacturing and processing credit	(0.5	)		(2.9	)		(3.4	)
Income tax rates differential of foreign subsidiaries	(3.3	)		0.6			(3.6	)
Non-recognition of tax benefits related to foreign subsidiaries losses and temporary differences	0.3			0.8			1.4
Recognition of previously unrecorded tax benefits	—			(0.9	)		—
Tax-exempt items	2.1			(2.6	)		(1.0	)
Other	1.6			(2.9	)		(3.3	)
Income tax expense	15.3		33.6	50.1		30.4	23.7		26.2

Details of income tax expense are as follows:

	321-day period ended December 18, 2003		Year ended January 31, 2003			Year ended January 31, 2002
Current income tax expense	$	14.9	$	8.7		$	78.1
Deferred income tax expense (recovery)
Temporary differences		0.1		42.2			(54.8	)
Effect of income tax rate changes		0.3		0.1			0.4
Recognition of previously unrecorded tax benefits		—		(0.9	)		—
		0.4		41.4			(54.4	)
Income tax expense	$	15.3	$	50.1		$	23.7

F-92

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

15.    INCOME TAXES (continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of BRP’s deferred income tax asset (liability) as at December 18, 2003 and as at January 31, 2003 are as follows:

	December 18, 2003			January 31, 2003
Warranty and other provisions	$	55.5		$	56.6
Loss carry-forwards		22.7			28.0
Accrued benefit liability		9.7			14.6
Inventories		14.8			19.1
Property, plant and equipment		(23.4	)		(35.5	)
Other long-term assets		(3.0	)		5.0
Other		(1.2	)		(5.4	)
		75.1			82.4
Valuation allowance		(1.6	)		(1.3	)
Net amount	$	73.5		$	81.1

Income taxes payable by separate tax-paying legal entities have been presented as a liability in the balance sheets. Income taxes payable with respect to other components which were not separate tax paying legal entities have been included in Bombardier Inc.’s net investment or due to and advances from related parties.

Losses carried forward and other temporary differences, which are available to reduce future taxable income for which no related income tax benefits have been recognized, amounted to $5.4 million as at December 18, 2003 ($3.4 million as at January 31, 2003, $3.7 million as at January 31, 2002,) and have no specified expiry dates.

Undistributed earnings of BRP’s foreign operations are considered to be indefinitely reinvested and, accordingly, no provision for income taxes has been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise to Bombardier, BRP may be subject to withholding taxes.

Deferred income taxes have not been provided for the undistributed earnings of foreign subsidiaries as of December 18, 2003 and January 31, 2003 because such earnings will either not be subject to any such taxes or intended to be indefinitely reinvested in those operations. It is not practicable to estimate the amount of the unrecognized deferred tax liabilities for these undistributed earnings.

F-93

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

16.    SUPPLEMENTAL DISCLOSURE TO THE STATEMENTS OF CASH FLOWS

The net changes in non-cash working capital balances related to operations were as follows:

	321-day period ended December 18, 2003			Year ended January 31, 2003			Year ended January 31, 2002
Receivables	$	(92.0	)	$	(5.3	)	$	(19.6	)
Due (to) from related parties		(14.6	)		(59.5	)		52.2
Inventories		(76.9	)		45.4			(34.8	)
Prepaid expenses		(0.3	)		(1.4	)		(4.3	)
Accounts payable and accrued liabilities		(21.9	)		(18.4	)		114.4
Income taxes payable		0.1			2.8			(20.3	)
Employee future benefits		0.4			2.9			0.6
	$	(205.2	)	$	(33.5	)	$	88.2

Non-cash transactions

Transfer of receivables in exchange of investment in retained interests of transferred receivables of $24.4 for the year ended January 31, 2003 [see note 4 (c)].

17.    FINANCIAL INSTRUMENTS

Foreign exchange risks

BRP uses derivative financial instruments to manage foreign currency risks and exposures. BRP does not trade in derivatives for speculative purposes.

Foreign exchange contracts

Bombardier entered into foreign exchange contracts on behalf of BRP to hedge future cash flows of BRP, in various currencies whereby it sells or buys specific amounts of currencies at predetermined dates and exchange rates. These contracts are matched with anticipated operational cash flows in various currencies, the amounts of which are estimated based on orders from customers, current conditions in BRP’s markets and past experience.

F-94

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

17.    FINANCIAL INSTRUMENTS (continued)

The following table sets out the significant notional amounts outstanding under foreign exchange contracts, the average contractual exchange rates and the settlement periods of these contracts.

	December 18, 2003			January 31, 2003			January 31, 2002
	Average rate	Notional amount		Average rate	Notional amount		Average rate	Notional amount
Sell contracts (sell currency / buy currency):
USD / CDN $
Less than 1 year	1.47	$	176.5	1.58	$	334.0	1.51	$	244.0
Between 1 and 2 years	—		—	—		—	1.58		280.0
CDN $ / EURO
Less than 1 year	0.64	$	20.4	—		—	—		—
NOK / EURO
Less than 1 year	0.12	$	35.3	0.12	$	75.9	—		—
AUD / USD
Less than 1 year	0.68	$	40.5	—		—	—		—
Between 1 and 2 years	0.67	$	6.0	—		—	—		—
Buy contracts (buy currency / sell currency):
USD / CDN $
Less than 1 year	1.32	$	15.0	—		—	—		—

Bombardier, on behalf of BRP entered into “buy” forward exchange contracts following management’s decision during September 2003 to postpone from the fourth quarter of fiscal year 2004, a portion of the planned units of watercraft’s production until the first quarter of fiscal year 2005. These “buy” forward exchange contracts were taken by BRP to hedge currency risk resulting from certain “sell” forward exchange contracts outstanding as at September 30, 2003, which were originally taken by BRP to hedge the expected future operational net cash flows associated with a portion of the planned watercraft’s production of the fourth quarter of fiscal year 2004.

As at September 30, 2003, BRP terminated designating as effective certain “sell” forward exchange contracts since they were related to the decision of postponing a portion of the watercraft’s production from the fourth quarter of fiscal year 2004 to the first quarter of fiscal year 2005. In connection with the termination of this hedging relationship, the hedge accounting related to those “sell” forward exchange contracts was not applied subsequently. However, as at September 30, 2003 BRP marked-to-market those “sell” forward exchange contracts that were designated in relation with the portion of the postponed watercraft’s production on their balance sheet creating derivative financial assets of $7.4 million. As at September 30, 2003 the gain related to the derivative financial assets of $7.4 million was recorded as a deferred foreign exchange gain. The deferred foreign gain of $7.4 million is included in the accounts payable and accrued liabilities [note 10]. The deferred foreign exchange gain will be deferred until the expected future operational cash flows of the postponed watercraft’s production will be realized in the first quarter of fiscal year 2005.

As at December 18, 2003 the outstanding “buy” and “sell” foreign exchange contracts for which hedging accounting did not apply since September 30, 2003, were marked-to-market. The above derivative financial instruments was recorded as an asset and was included as current assets on the balance sheet.

F-95

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

17.    FINANCIAL INSTRUMENTS (continued)

Fair value of financial instruments

Cash, receivables, due from and advances to related parties, accounts payable and accrued liabilities, income taxes payable and due to and advances from related parties

The carrying amounts reported on the balance sheets approximate the fair values of these items due to their short-term nature.

Restricted investments

The carrying amount of restricted investments approximates its fair value, which are estimated using public quotations, when available, or discounted cash flow analyses, using interest rates applicable for assets with similar terms.

Long-term debt

The fair values of long-term debt are determined by discounting the future contractual cash flows anticipated pursuant to the financial contracts in force using discount rates which represent the interest rates on loans of which BRP could avail itself for loans having similar terms and conditions. The carrying amount of long-term debt approximates their fair value.

Foreign exchange contracts

The fair values generally reflect the estimated amounts that BRP would receive upon the settlement of favourable contracts or be required to pay to terminate unfavourable contracts at the reporting dates. Investment dealers’ quotes or quotes from BRP’s bankers are available for all of the foreign exchange contracts.

	December 18, 2003		January 31, 2003		January 31, 2002
Fair values of foreign exchange contracts
Favourable	$	25.9	$	11.2	$	0.9
Unfavourable	$	3.0	$	0.1	$	21.5

An amount of $4.6 million is included in accounts payable and accrued liabilities as at December 18, 2003, resulting from the operational cash flows in various currencies being hedged [nil as at January 31, 2003 and 2002].

An amount of $4.1 million is included in current assets on the balance sheet as at December 18, 2003, representing the fair value of the derivative financial asset not designated as hedges.

Credit risk

In addition to the credit risk described elsewhere in these Financial Statements, Bombardier is subject to risk related to the off-balance sheet nature of derivative financial instruments, whereby counterparty failure would result in economic losses on favourable contracts. However, the counterparties to these derivative financial instruments are major financial institutions which Bombardier anticipates will satisfy their obligations under the contracts.

F-96

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

17.    FINANCIAL INSTRUMENTS (continued)

BRP considers that its credit risk associated with its receivables did not represent a significant concentration of credit risk at December 18, 2003 and January31, 2003, due to the large number of customers and their dispersion across many geographic areas.

18.    EMPLOYEE FUTURE BENEFITS

BRP maintains non-contributory defined benefits plans that provide for pension, other post-retirement and post-employment benefits, and also makes contributions to defined contribution retirement plans.

Defined benefits plans

The significant actuarial assumptions adopted to determine BRP’s projected benefit obligation are as follow (weighted-average assumptions as at the December 18, 2003 and December 31, 2002 for the year ended January 31 2003):

	December 18, 2003				January 31, 2003				January 31, 2002
	Pension benefits		Other benefits		Pension benefits		Other benefits		Pension benefits		Other benefits
Actuarial assumptions
Discount rate	5.84	%	6.00	%	6.25	%	6.50	%	6.39	%	6.50	%
Expected long-term rate of return on plan assets	7.36	%	—		7.85	%	—		7.92	%	—
Rate of compensation increase	3.89	%	4.00	%	4.07	%	4.25	%	4.12	%	4.25	%
Health care and other benefits cost trend	—		5.50	%	—		5.50	%	—		5.50	%

The health care costs were assumed to increase to 9.5% in fiscal year 2005 and are expected to gradually decline to 5.5% in fiscal year 2007, remaining at that level thereafter. Other benefit costs were assumed to increase at the same rate as price inflation.

F-97

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

18.    EMPLOYEE FUTURE BENEFITS (continued)

The following tables provide a reconciliation of the changes in BRP’s plans’ projected benefit obligation and fair value of assets and a statement of the funded status as at December 31 (measurement date). The information for Bombardier common plans has been allocated to BRP based on a pro-rata of the plan obligation as at December 31, 2002, except for the amounts related to prior plan improvements specific to BRP employees which were allocated entirely to BRP:

	December 18, 2003						January 31, 2003
	Pension benefits			Other benefits			Pension benefits			Other benefits
Projected benefit obligation
Obligation at beginning of period	$	268.0		$	7.8		$	202.6		$	5.4
Current service cost		17.5			0.5			13.2			0.4
Interest cost		16.5			0.6			15.4			0.5
Plan amendments		—			—			16.2			—
Actuarial loss		12.7			3.3			17.8			1.7
Benefits paid		(11.0	)		(0.2	)		(6.7	)		(0.2	)
Effect of foreign currency exchange rate changes		(2.1	)		—			9.5			—
Projected benefit obligation at end of period	$	301.6		$	12.0		$	268.0		$	7.8
Plan assets
Fair value at beginning of period	$	104.0		$	—		$	104.2		$	—
Actual return on plan assets		5.7			—			(11.8	)		—
Employer contributions		26.9			—			18.6			—
Benefits paid		(11.0	)		—			(6.7	)		—
Effect of foreign currency exchange rate changes		(0.9	)		—			(0.3	)		—
Fair value at end of period	$	124.7		$	—		$	104.0		$	—
Funded status
Plan deficit	$	(176.9	)	$	(12.0	)	$	(164.0	)	$	(7.8	)
Unrecognized amounts		112.9	[1]		6.1			99.6	[1]		2.9
Net recognized amount	$	(64.0	)	$	(5.9	)	$	(64.4	)	$	(4.9	)

[1] Includes $96.6 million of actuarial loss for the 321-day period ended December 18, 2003 ($82.2 million for fiscal year 2003) and $16.3 million of prior service costs for the 321-day period ended December 18, 2003 ($17.4 million for fiscal year 2003).

F-98

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

18.    EMPLOYEE FUTURE BENEFITS (continued)

The following table provides the amounts recognized on the balance sheets as at:

	December 18, 2003						January 31, 2003
	Pension benefits			Other benefits			Pension benefits			Other benefits
Amounts recognized
Accrued benefit asset	$	1.2		$	—		$	2.8		$	—
Accrued benefit liability		(65.2	)		(5.9	)		(67.2	)		(4.9	)
		(64.0	)		(5.9	)	$	(64.4	)	$	(4.9	)

The projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets were $301.6 million and $124.7 million respectively, as at December 18, 2003 ($267.9 million and $103.9 million as at January 31, 2003 respectively). BRP’s plans for post-retirement benefits other than pensions are all unfunded.

The following table provides components of the net benefit plan cost for the 321-day period ended December 18, 2003 and for the years ended January 31:

	321-day period ended December 18, 2003					Year ended January 31, 2003					Year ended January 31, 2002
	Pension benefits			Other benefits		Pension benefits			Other benefits		Pension benefits			Other benefits
Net benefit plan cost
Current service cost	$	15.9		$	0.4	$	13.2		$	0.4	$	10.8		$	0.3
Interest cost		15.1			0.6		15.4			0.5		12.4			0.4
Expected return on plan assets		(8.8	)		—		(9.7	)		—		(8.9	)		—
Amortization of prior service costs		1.0			—		1.2			—		0.2			—
Amortization of net actuarial loss		1.8			0.2		0.9			0.1		—			—
Net benefit plan cost	$	25.0		$	1.2	$	21.0		$	1.0	$	14.5		$	0.7

Defined contribution plans

BRP’s contributions under defined contribution plans totaled $2.0 million, $2.7 million and $2.0 million for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002, respectively.

19.    COMMITMENTS AND CONTINGENCIES

In addition to the commitments and contingencies described elsewhere in these Financial Statements, BRP is subject to the following (all amounts presented are undiscounted):

a)    Operating leases

BRP leases buildings and equipment under operating leases. The rent expense under all lease agreements, including intercompany transactions disclosed in note 4 (b), was $17.3 million, $19.7 million and

F-99

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

19.    COMMITMENTS AND CONTINGENCIES (continued)

$18.5 million for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002, respectively. The related minimum lease payments and residual value guarantees (including $8.9 million to related parties) for the next five years are as follows:

	Buildings and equipment		Residual value guarantees		Total
2005 (from December 19, 2003 to January 31, 2005)	$	15.0	$	2.0	$	17.0
2006		5.9		1.3		7.2
2007		2.8		0.2		3.0
2008		1.8		—		1.8
2009		1.7		—		1.7
	$	27.2	$	3.5	$	30.7

b)    Floor Financing

In addition to the floorplan financing described in note 4 (b), BRP has other floorplan financing agreements with third parties. Similar conditions of repurchase for new and unused products at the dealer’s total unpaid principal balance to the financing company, in the event of dealer default, apply to these agreements. Any loss on the resale of the repurchased products is the responsibility of BRP. No material losses have been incurred under these agreements by BRP. Outstanding floorplan financing between BRP’s dealers and the respective financing companies as at December 18, 2003 and as at January 31, 2003 totaled $35.8 million and $31.0 million, respectively.

c)    Sale of receivables

As disclosed in notes 4 and 5, BRP sells certain of its receivables. A portion of the receivables sold are subject to the repurchase of new and unused products at the total unpaid principal balance due, in the event of dealer default. Any loss on the resale of the repurchased products is the responsibility of BRP. No material losses have been incurred under these agreements by BRP. The amounts outstanding subject to repurchase as at December 18, 2003 and January 31, 2003 were $94.9 million and $120.7 million, respectively.

d)    Purchase agreement

In the normal course of its business, the Company entered into a purchase agreement with a Japanese marine engine manufacturer whereby it must buy a certain number of units of marine engines with an annual minimum purchase requirement for each year through August 31, 2006. Using the purchase price paid during the period ended December 18, 2003, the minimum purchase commitment would be $7.6 million for each year for the next two years.

e)    Other guarantees

In connection with the sale of certain products, BRP provides credit and residual value guarantees on sales to affiliated companies. The maximum risk as at December 18, 2003 from these guarantees, maturing in different periods up to 2009, totalled $5.3 million. In addition, in connection with a lease agreement, BRP provided a residual value guarantee totalling $2.4 million. The residual value guarantee is exercisable between December 2003 and January 2006.

F-100

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

19.    COMMITMENTS AND CONTINGENCIES (continued)

f)    Litigation

BRP is subject to product liability claims in the normal course of business. Any potential BRP liability regarding product liability claims is limited to a maximum of $250,000 per claim [$100,000 prior to June 30, 2000], and any excess liability is covered by Bombardier up to a certain amount and insurance companies under Bombardier policies for the rest, excluding punitive damages, which are generally not insurable.

In addition, BRP has two patent infringement cases outstanding as well as one complaint for alleged infringement of a trademark. BRP also has various other cases outstanding mainly for commercial disputes with terminated dealers and minor disputes with customers.

BRP intends to vigorously defend its position in these matters. Management believes BRP has recorded adequate provisions to cover potential losses and amounts not recoverable under insurance coverage, if any, in relation to these legal actions. While the final outcome with respect to actions outstanding or pending as at December 18, 2003 cannot be predicted with certainty, it is Management’s opinion that their resolution will not have material adverse effects on BRP’s financial position, results of operations, or cash flows.

20.    CURRENCY TRANSLATION ADJUSTMENT

Unrealized currency translation adjustments, which arise on the translation to Canadian dollars of assets and liabilities of BRP’s self-sustaining foreign operations, resulted in a net change in the currency translation adjustment of $9.6 million, $18.0 million and $1.6 million for the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and January 31, 2002, respectively. The currency translation adjustment is presented as part of Bombardier Inc.’s net investment.

The 321-day period ended December 18, 2003 and the year ended January 31, 2003 net change resulted primarily from the strengthening of the Euro against the Canadian dollar and the year ended January 2002 net change resulted primarily from the strengthening of the U.S. dollar against the Canadian dollar.

21.    SEGMENT DISCLOSURE

BRP operates in the three reportable segments described below. Each reportable segment offers different products and services and requires different technology and marketing strategies.

The Power Sports segment designs, develops, manufactures and sells snowmobiles, watercraft, all-terrain vehicles, sport boats and Rotax engines. Power Sports products are sold mainly through an international network of independent dealers and distributors. The manufacturing plants are located primarily in Canada, the United States, Austria and Finland.

The Marine Engine segment designs, develops, manufactures and sells outboard engines available across three technologies: 2-stroke carburated, 2-stroke direct injection and 4-stroke technology. Marine Engine products are sold directly to boat builders or through an international network of independent dealers and distributors. The Marine Engine manufacturing plants are located primarily in the United States and Mexico.

F-101

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

21.    SEGMENT DISCLOSURE (continued)

The Utility Vehicles segment designs, develops, manufactures and sells tracked vehicles for alpine and nordic grooming, snowmobile trail grooming, sidewalk snow removal and rough terrain transport. Such vehicles are sold directly to ski hill operators, governments and through an independent distributor network. The Utility Vehicles manufacturing plant is located in Canada.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies, except for employee future benefits. The cost of employee future benefits allocated to each reportable segment is based on a percentage of payroll which approximates the current service cost component. Management evaluates performance based on operating profit. Operating profit does not include allocated Corporate office charges for administrative functions as well as interest and income taxes. Intersegment services are accounted for at the exchange amount which management believes reflects current market prices as if the services were provided to third parties.

F-102

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

21.    SEGMENT DISCLOSURE (continued)

Net segment assets exclude cash, due from and advances to related parties related to financing activities, deferred income taxes and accrued benefit asset, and are net of accounts payable and accrued liabilities and other accrued benefit liability.

	Combined			Power Sports			Marine Engine					Utility Vehicles
	321-day period ended December 18, 2003	Year ended January 31, 2003	Year ended January 31, 2002	321-day period ended December 18, 2003	Year ended January 31, 2003	Year ended January 31, 2002	321-day period ended December 18, 2003		Year ended January 31, 2003	Year ended January 31, 2002		321-day period ended December 18, 2003	Year ended January 31, 2003	Year ended January 31, 2002
	$	$	$	$	$	$	$		$	$		$	$	$
External revenues	2,147.1	2,476.3	2,020.0	1,593.1	1,819.9	1,638.8	482.5		563.5	289.4		71.5	92.9	91.8
Intersegment revenues	—	—	—	18.0	14.1	6.8	15.5		16.4	3.9		0.2		—
Segment revenues	2,147.1	2,476.3	2,020.0	1,611.1	1,834.0	1,645.6	498.0		579.9	293.3		71.7	92.9	91.8
Cost of sales and operating expenses	1,976.7	2,180.1	1,838.9	1,450.1	1,579.5	1,477.4	493.3		541.0	285.5		67.0	90.1	86.7
Depreciation and amortization	91.6	97.4	69.8	71.1	71.5	57.4	19.6		24.8	11.2		0.9	1.1	1.2
	2,068.3	2,277.5	1,908.7	1,521.2	1,651.0	1,534.8	512.9		565.8	296.7		67.9	91.2	87.9
Segment operating profit (loss)	78.8	198.8	111.3	89.9	183.0	110.8	(14.9	)	14.1	(3.4	)	3.8	1.7	3.9
Corporate and other	30.1	29.0	16.9
Operating profit	48.7	169.8	94.4
Net interest expense and other	3.2	4.9	4.1
Income before income taxes	45.5	164.9	90.3
Net segment assets	488.3	321.2	326.9	280.3	107.7	163.4	190.2		193.4	134.4		17.8	20.1	29.1
Net corporate office assets and other	21.0	25.4	17.0
Due from and advances to related parties	11.0	57.4	28.0
Accounts payable and accrued liabilities	579.9	613.8	605.7
Deferred income taxes	88.1	88.4	133.1
Cash	140.2	28.7	17.0
Total assets	1,328.5	1,134.9	1,127.7

F-103

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

21.    SEGMENT DISCLOSURE (continued)

	Additions to property, plant and equipment
	321-day period ended December 18, 2003	Year ended January 31, 2003	Year ended January 31, 2002
	$	$	$
Power Sports	61.6	75.7	97.5
Marine Engine	11.5	20.9	94.9
Utility Vehicles	0.6	0.4	0.5
Corporate and other	0.1	0.7	1.8
	73.8	97.7	194.7

Geographic information:

	321-day period ended December 18, 2003		Year ended January 31, 2003		Year ended January 31, 2002		321-day period ended December 18, 2003		Year ended January 31, 2003		Year ended January 31, 2002
			Revenues				Property, plant and equipment and patent rights
United States	$	1,228.8	$	1,449.9	$	1,219.9	$	165.1	$	200.2	$	223.7
Canada		385.0		431.4		324.3		130.8		132.8		125.6
Italy		92.1		114.2		110.8		—		—		—
Germany		44.4		69.9		60.0		—		—		—
Australia		44.5		48.6		23.4		0.3		0.3		0.3
Sweden		42.3		45.9		31.1		0.1		—		—
Spain		33.2		42.9		24.6		—		—		—
France		35.4		37.4		23.5		—		—		—
Finland		35.6		33.0		21.0		7.7		6.4		5.9
Norway		25.8		32.6		23.9		—		—		—
Japan		20.6		19.6		23.0		0.3		0.3		0.3
Austria		15.0		19.2		13.4		118.9		123.6		88.4
Other – Americas		42.8		47.7		38.9		6.1		7.0		9.0
Other		101.6		84.0		82.2		1.3		2.5		3.1
	$	2,147.1	$	2,476.3	$	2,020.0	$	430.6	$	473.1	$	456.3

F-104

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

22.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The Financial Statements have been prepared in accordance with Canadian GAAP which differs in certain respects from US GAAP. The following tables present a summary of the material adjustments and additional disclosures to BRP’s financial statements that would be required in order to conform with US GAAP and the related rules regulations adopted by the SEC.

Statements of income and comprehensive income	321-day period ended December 18, 2003			January 31, 2003			January 31, 2002
Net income in accordance with Canadian GAAP	$	30.2		$	114.8		$	66.6
Development costs (a)		(2.2	)		(5.9	)		(7.3	)
Employee future benefits (b)		(0.4	)		(0.9	)		(0.5	)
Foreign exchange contracts (c)		12.3			31.7			(13.1	)
Software costs (d)		1.2			1.4			1.5
Total adjustments before the following:		10.9			26.3			(19.4	)
Income tax expense (recovery) (f)		3.3			8.3			(6.2	)
Total adjustments		7.6			18.0			(13.2	)
Net income in accordance with US GAAP		37.8			132.8			53.4
Minimum pension liability adjustment, net of tax of $6.1 million (2003-$6.1 million, 2002-$6.1 million) (b)		(14.2	)		(12.5	)		(13.0	)
Change in currency translation adjustment		9.3			14.5			1.6
Comprehensive income in accordance with US GAAP	$	32.9		$	134.8		$	42.0

	December 18, 2003					January 31, 2003
Balance sheets	CDN GAAP		US GAAP			CDN GAAP		US GAAP
Property, plant and equipment (d) (e)	$	424.4	$	433.0		$	464.2	$	472.0
Derivative financial assets (c)		4.1		27.5			—		11.2
Long-term deferred income tax assets (f)		17.8		28.4			18.7		31.8
Other long-term assets (a)(b)		64.5		50.0			66.0		51.3
Long-term debt (e)		2.5		11.1			1.8		10.8
Employee future benefits liability (b)		71.1		149.6			72.1		127.4
Other long-term liabilities (c)		7.6		7.6			10.2		10.3
Long-term deferred income tax liabilities (f)		14.6		2.2			7.3		—
Bombardier Inc.’s net investment		577.8		546.4			170.2		140.8
Accumulated Other Comprehensive Income :
Minimum pension liability		—		(39.9	)		—		(25.7	)
Currency translation adjustment		—		24.7			—		15.4

Total assets under US GAAP amounted to $1,357 million and $1,152 million as at December 18, 2003 and as at January 31, 2003, respectively.

F-105

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

22.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

The following table provides the details of the adjustments on the balance sheets for which more than one adjustment was required in order to conform with US GAAP:

	Increase (decrease)
Adjustments under US GAAP on the balance sheets	December 18, 2003			January 31, 2003
Property, plant and equipment
Software costs (d)	$	—		$	(1.0	)
Sale of property, plant and equipment (e)		8.6			8.8
	$	8.6		$	7.8
Other long-term assets
Development costs (a)	$	(40.3	)	$	(37.9	)
Employee future benefits (b)		25.8			23.2
	$	(14.5	)	$	(14.7	)

	December 18, 2003						January 31, 2003						January 31, 2002
Statements of cash flows	CDN GAAP			US GAAP			CDN GAAP			US GAAP			CDN GAAP			US GAAP
Cash flows from operating activities (a) (d)	$	(81.1	)	$	(85.8	)	$	215.4		$	206.9		$	177.9		$	168.4
Cash flows from investing activities (a) (d) (e)		(75.4	)		(70.7	)		(96.4	)		(87.9	)		(359.4	)		(357.5	)
Cash flows from financing activities (e)	$	247.6		$	247.6		$	(118.2	)	$	(118.2	)	$	192.7		$	200.3

(a)    Development costs

Under Canadian GAAP, certain development costs are deferred and amortized as they meet certain criteria. Under US GAAP, these costs are expensed as incurred. In addition, under Canadian GAAP, development costs are classified as investing activities in the statement of cash flows, whereas they are classified as operating activities in the statement of cash flows under US GAAP.

(b)    Employee future benefits

Under Canadian GAAP, effective February 1, 2000, BRP adopted the new method of accounting for employee future benefits. In reporting the impact of the adoption of this method, the transitional obligation was accounted for as a charge to Bombardier’s net investment. Under US GAAP, the transitional pension obligation that arose on February 1, 1989, upon the adoption of Financial Accounting Standards Board Statement No. 87, is being amortized over 16 years.

Under US GAAP, an additional minimum pension liability is recorded for any excess of the unfunded accumulated benefit obligation over the recorded employee future benefits liability. An offsetting intangible asset is recorded equal to the unrecognized prior service costs and transitional obligation, with any difference recorded in accumulated other comprehensive income.

F-106

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

22.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

The significant actuarial assumptions used to determine BRP’s projected benefit obligation are the same under Canadian GAAP and US GAAP. These assumptions are disclosed in note 18.

The reconciliation of the changes in BRP’s plans’ projected benefit obligation and fair value of assets are the same under Canadian GAAP and US GAAP and are disclosed in note 18.

The statement of the funded status under US GAAP as at December 31 (measurement date) is included in the following table:

	321-day period ended December 18, 2003						January 31, 2003
	Pension benefits			Other benefits			Pension benefits			Other benefits
Funded status
Plan deficit	$	(176.8	)	$	(12.0	)	$	(164.0	)	$	(7.8	)
Unrecognized amounts		118.1	[1]		6.5			105.0	[1]		3.3
Net recognized amount	$	(58.7	)	$	(5.5	)	$	(59.0	)	$	(4.5	)

[1] Includes $96.0 million of actuarial loss for the 321-day period ended December 18, 2003 ($81.3 million for fiscal year 2003), $23.3 million of prior service costs for the 321-days period ended December 18, 2003 ($25.1 million for fiscal year 2003) and $(1.2) million of unrecognized net transitional pension obligation for the 321-day period ended December 18, 2003 ($(1.4) million for fiscal year 2003).

The following table provides the amounts recognized on the interim balance sheets as at:

	December 18, 2003						January 31, 2003
	Pension benefits			Other benefits			Pension benefits			Other benefits
Amounts recognized
Accrued benefit asset	$	5.1		$	—		$	1.8		$	—
Additional minimum pension liability		(80.3	)		—			(62.2	)		—
Intangible pension asset		21.9			—			24.2			—
Accrued benefit liability		(63.8	)		(5.5	)		(60.7	)		(4.5	)
Accumulated other comprehensive income		58.4			—			37.9			—
	$	(58.7	)	$	(5.5	)	$	(59.0	)	$	(4.5	)

The accumulated benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligation in excess of plan assets were $301.6 million and $124.7 million respectively as at December 18, 2003 ($267.9 million and $103.9 million as at January 31, 2003 respectively).

F-107

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

22.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

A one-percentage-point change in assumed health care cost trend rates would have no material impact on other benefits cost.

The following table provides components of the net benefit plan cost for the 321-day period ended December 18, 2003 and for the years ended January 31:

	321-day period ended December 18, 2003					January 31, 2003					January 31, 2002
	Pension benefits			Other benefits		Pension benefits			Other benefits		Pension benefits			Other benefits
Net benefit plan cost
Current service cost	$	16.0		$	0.5	$	13.2		$	0.4	$	10.8		$	0.3
Interest cost		15.1			0.6		15.4			0.5		12.4			0.4
Expected return on plan assets		(8.8	)		—		(9.7	)		—		(8.9	)		—
Amortization of transition obligation		(0.2	)		—		(0.2	)		—		(0.2	)		—
Amortization of prior service costs		1.6			—		1.9			—		0.9			—
Amortization of net actuarial loss		1.7			0.1		1.3			0.1		—			—
Net benefit plan cost	$	25.4		$	1.2	$	21.9		$	1.0	$	15.0		$	0.7

(c)    Foreign exchange contracts

Under Canadian GAAP, BRP’s forward exchange contracts entered into to hedge foreign currency exposure meet the criteria to apply hedge accounting. Under US GAAP, BRP’s hedging activities and practices do not meet the documentation criteria necessary to apply hedge accounting under SFAS 133 or the firm commitment criteria under SFAS 52. Accordingly, changes in the fair value of forward exchange contracts are recorded in income under US GAAP.

(d)    Software costs

Under Canadian GAAP, costs incurred to enhance the service potential of computer software that extend its useful life may be capitalized. Under US GAAP, costs that extend the useful life absent any additional functionality are charged to expense as incurred.

(e)    Sale of property, plant and equipment

A transfer of property, plant and equipment accounted for as a sale under Canadian GAAP did not meet the criteria of SFAS 98 to be recognized as a sale under US GAAP, as a result of continuous involvement during the year ended January 31, 2002. This transaction was treated as a financing transaction under US GAAP and had no impact on the statement of income.

F-108

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

22.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)

(f)    Income Taxes

The income taxes adjustment is reflecting the income taxes effect on the adjustments between Canadian and US GAAP.

(g)    Share-based plans

Under US GAAP, the requirement to disclose pro-forma net income was adopted earlier and gives effect to the stock options granted prior to February 1, 2002.

If the share options granted under the plan had been accounted for based on the fair value method, net income would have been impacted as follows:

	December 18, 2003		January 31, 2003		January 31, 2002
Net income in accordance with US GAAP	$	37.8	$	132.8	$	53.4
Less: Stock-based compensation using fair value based method		2.7		2.9		2.8
Pro forma net income in accordance with US GAAP	$	35.1	$	129.9	$	50.6

There were no options granted during the 321-day period ended December 18, 2003.

The weighted average grant date fair value of options granted during the years ended January 31, 2003 and 2002 amounted to $5.13 and $6.63, respectively.

The fair value of each option granted was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

	321-day period ended December 18, 2003		January 31, 2003		January 31, 2002
Risk-free interest rates	5.43	%	5.43	%	5.25	%
Expected volatility	28.3	%	28.3	%	25.8	%
Dividend yield	0.90	%	0.90	%	0.90	%
Expected life of options (years)	6		6		6

F-109

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On December 18, 2003, our Successor [see note 24] entered into a senior secured credit facility, and issued senior subordinated notes. The senior secured credit facility and the senior subordinated notes (the “Guaranteed Debt”) are fully and unconditionally guaranteed on a joint and several basis by certain of our Successor’s subsidiaries (“Guarantor Subsidiaries”). The Guaranteed Debt is not guaranteed by our Successor’s Austrian Subsidiaries which produce Rotax^TM engines, our Successor’s Finland Subsidiaries which produce Lynx^TM and certain models of Ski-Doo^TM snowmobiles, all other non-domestic subsidiaries and certain immaterial domestic subsidiaries of our Successor which are either intended to be used for foreign tax planning purposes or are prohibited by law from guaranteeing the Guaranteed Debt (collectively the “Non-Guarantor Subsidiaries”).

The condensed consolidating financial information for the Company (the “Predecessor Business”) is presented pursuant to Article 3-10(d) of Regulation S-X, since the operations of the Company consists of substantially all of our Successor’s operations. Prior to the acquisition, as disclosed in note 24, and the issuance of the Guaranteed Debt on December 18, 2003, the parent company of our Successor, the Guaranteed Subsidiaries of our Successor and the Non-Guarantor Subsidiaries of our Successor did not legally exist, as all operations of the Company were within Bombardier. For purposes of presenting the following supplemental condensed consolidating financial information, amounts were allocated to the parent company, the Guaranteed Subsidiaries and the Non-Guarantor Subsidiaries assuming that they did exist for the periods presented and assuming that the operations of the Predecessor Business were allocated to these subsidiaries under the same assumptions as those allocations actually applied by our Successor Company.

The following condensed consolidating financial information as at December 18, 2003 and January 31, 2003 and for the 321-day period ended December 18, 2003 and for each of the years in the two-year period ended January 31, 2003, show the balance sheets and the statements of operations and cash flows for the parent company and on a combined basis for the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. The supplemental condensed consolidating financial information reflects the investments of the parent company in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method.

F-110

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

The following condensed consolidating financial information as at December 18, 2003 and January 31, 2003 and for the 321-day period ended December 18, 2003 and for each of the years in the two-year period ended January 31, 2003, show the balance sheets and the statements of operations and cash flows for the parent company and on a combined basis for the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. The supplemental condensed consolidating financial information reflects the investments of the parent company in the Guarantor Subsidiaries and Non-Guarantor Subsidiaries using the equity method.

Condensed Consolidating Balance Sheet

	December 18, 2003											January 31, 2003
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets
Cash	$	61.6	$	12.0	$	66.6	$	—		$	140.2	$	(0.4	)	$	2.4	$	26.7	$	—		$	28.7
Receivables		43.3		54.3		55.2		—			152.8		10.2			20.6		29.3		—			60.1
Due from and advances to related parties		—		0.5		46.0		(11.6	)		34.9		—			12.1		92.5		(31.3	)		73.3
Inventories		210.0		117.0		101.2		(21.5	)		406.7		142.7			129.2		85.5		(16.5	)		340.9
Prepaid expenses		4.1		5.7		3.0		—			12.8		2.7			7.9		2.7		—			13.3
Derivative financial assets		4.1		—		—		—			4.1		—			—		—		—			—
Deferred income taxes		18.5		42.2		2.6		7.0			70.3		21.5			38.6		3.2		6.4			69.7
Total current assets		341.6		231.7		274.6		(26.1	)		821.8		176.7			210.8		239.9		(41.4	)		586.0
Property, plant and equipment		124.6		165.4		134.4		—			424.4		124.0			199.9		140.3		—			464.2
Deferred income taxes		—		14.0		3.8		—			17.8		—			11.0		7.7		—			18.7
Other long-term assets		7.7		4.8		52.0		—			64.5		11.4			5.5		49.1		—			66.0
	$	473.9	$	415.9	$	464.8	$	(26.1	)	$	1,328.5	$	312.1		$	427.2	$	437.0	$	(41.4	)	$	1,134.9

F-111

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Balance Sheet

	December 18, 2003											January 31, 2003
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated		Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts payable and accrued liabilities	$	247.7	$	186.8	$	145.4	$	—		$	579.9	$	266.7		$	206.7	$	140.4	$	—		$	613.8
Income taxes payable		—		1.3		2.5		—			3.8		—			0.2		3.5		—			3.7
Due to and advances from related parties		18.8		47.9		11.8		(11.6	)		66.9		51.3			197.1		34.0		(31.3	)		251.1
Current portion of long-term debt		—		—		1.4		—			1.4		—			—		1.7		—			1.7
Other short-term liabilities		2.9		—		—		—			2.9		3.0			—		—		—			3.0
Total current liabilities		269.4		236.0		161.1		(11.6	)		654.9		321.0			404.0		179.6		(31.3	)		873.3
Long-term debt		—		2.0		0.5		—			2.5		—			—		1.8		—			1.8
Deferred income taxes		3.1		1.5		10.0		—			14.6		0.2			—		7.1		—			7.3
Employee future benefits liability		11.3		3.3		56.5		—			71.1		18.3			0.8		53.0		—			72.1
Other long-term liabilities		2.9		—		4.7		—			7.6		5.9			—		4.3		—			10.2
Total liabilities		286.7		242.8		232.8		(11.6	)		750.7		345.4			404.8		245.8		(31.3	)		964.7
Bombardier Inc.’s net investment		187.2		173.1		232.0		(14.5	)		577.8		(33.3	)		22.4		191.2		(10.1	)		170.2
	$	473.9	$	415.9	$	464.8	$	(26.1	)	$	1,328.5	$	312.1		$	427.2	$	437.0	$	(41.4	)	$	1,134.9

F-112

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Operations

	321-day period ended December 18, 2003													Year Ended January 31, 2003											Year Ended January 31, 2002
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Elimi- nations			Consoli- dated		Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Elimi- nations			Consoli- dated		Parent		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Elimi- nations			Consoli- dated
Revenues	$	1,308.4		$	1,374.5		$	700.8	$	(1,236.6	)	$	2,147.1	$	1,421.2	$	1,696.5	$	758.6	$	(1,400.0	)	$	2,476.3	$	1,286.9	$	1,361.2		$	552.1	$	(1,180.2	)	$	2,020.0
Cost of sales		1,125.1			1,241.0			602.8		(1,230.6	)		1,738.3		1,156.3		1,508.4		651.7		(1,403.1	)		1,913.3		1,071.5		1,212.6			451.0		(1,174.6	)		1,560.5
Gross profit		183.3			133.5			98.0		(6.0	)		408.8		264.9		188.1		106.9		3.1			563.0		215.4		148.6			101.1		(5.6	)		459.5
Operating expenses
Selling and marketing		40.2			95.8			11.2		—			147.2		71.5		80.9		13.9		—			166.3		34.7		92.0			9.7		—			136.4
Research and development		44.2			29.8			23.2		—			97.2		40.3		38.3		27.7		—			106.3		42.3		30.1			28.0		—			100.4
General and administrative		58.0			38.9			18.8		—			115.7		64.2		36.0		20.4		—			120.6		69.4		25.8			33.1		—			128.3
Total operating expenses		142.4			164.5			53.2		—			360.1		176.0		155.2		62.0		—			393.2		146.4		147.9			70.8		—			365.1
Operating profit		40.9			(31.0	)		44.8		(6.0	)		48.7		88.9		32.9		44.9		3.1			169.8		69.0		0.7			30.3		(5.6	)		94.4
Net interest expense and other		(0.5	)		1.0			2.7		—			3.2		0.1		2.9		1.9		—			4.9		—		3.3			0.8		—			4.1
Income (loss) before income taxes		41.4			(32.0	)		42.1		(6.0	)		45.5		88.8		30.0		43.0		3.1			164.9		69.0		(2.6	)		29.5		(5.6	)		90.3
Income tax expense (recovery)		12.8			(9.7	)		13.3		(1.1	)		15.3		28.5		9.1		11.3		1.2			50.1		22.6		(4.3	)		8.5		(3.1	)		23.7
Net income (loss)	$	28.6		$	(22.3	)	$	28.8	$	(4.9	)	$	30.2	$	60.3	$	20.9	$	31.7	$	1.9		$	114.8	$	46.4	$	1.7		$	21.0	$	(2.5	)	$	66.6

F-113

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Cash Flows

	321-day period ended December 18, 2003															Year Ended January 31, 2003															Year Ended January 31, 2002
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations			Consoli- dated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations			Consoli- dated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations			Consoli- dated
OPERATING ACTIVITIES
Net income (loss)	$	28.6		$	(22.3	)	$	28.8		$	(4.9	)	$	30.2		$	60.3		$	20.9		$	31.7		$	1.9		$	114.8		$	46.4		$	1.7		$	21.0		$	(2.5	)	$	66.6
Non-cash items:
Depreciation and amortization		38.5			22.8			30.3			—			91.6			37.8			29.1			30.5			—			97.4			33.6			16.5			19.7			—			69.8
Deferred income taxes		6.1			(10.1	)		5.5			(1.1	)		0.4			12.0			27.3			1.6			0.5			41.4			(0.9	)		(48.3	)		(2.1	)		(3.1	)		(54.4	)
Loss (gain) on disposal of property, plant and equipment		0.8			0.1			0.1			—			1.0			0.1			(4.8	)		—			—			(4.7	)		—			(0.8	)		(1.3	)		—			(2.1	)
Gain on disposal of other assets		—			(2.4	)		—			—			(2.4	)		—			—			—			—			—			—			—			—			—			—
Reduction in value of other assets		—			—			—			—			—			—			—			—			—			—			—						9.8			—			9.8
Unrealized gains on derivative financial instruments		(4.1	)		—			—			—			(4.1	)		—			—			—			—			—			—			—			—			—			—
Deferred foreign exchange gain on forward contracts		7.4			—			—			—			7.4			—			—			—			—			—			—			—			—			—			—
Net changes in non-cash working capital balances related to operations		(165.0	)		(70.9	)		24.7			6.0			(205.2	)		54.1			(101.8	)		16.6			(2.4	)		(33.5	)		(7.3	)		111.8			(21.9	)		5.6			88.2
Cash flows from operating activities		(87.7	)		(82.8	)		89.4			—			(81.1	)		164.3			(29.3	)		80.4			—			215.4			71.8			80.9			25.2			—			177.9
INVESTING ACTIVITIES
Additions to property, plant and equipment		(37.3	)		(12.0	)		(24.5	)		—			(73.8	)		(33.4	)		(21.7	)		(42.6	)		—			(97.7	)		(50.1	)		(96.6	)		(48.0	)		—			(194.7	)
Proceeds on disposal of property, plant and equipment		0.2			0.3			0.9			—			1.4			1.7			10.7			0.2			—			12.6			—			0.8			1.5			—			2.3
Proceeds on disposal of other assets		—			4.1			—			—			4.1			—			—			—			—			—			—			—			—			—			—
Business acquisition, net of cash acquired		—			—			—			—			—			—			—			—			—			—			—			(136.8	)		—			—			(136.8	)
Other long-term assets		(2.4	)		—			(4.7	)		—			(7.1	)		(12.5	)		9.1			(7.9	)		—			(11.3	)		(1.1	)		—			(29.1	)		—			(30.2	)
Cash flows from investing activities		(39.5	)		(7.6	)		(28.3	)		—			(75.4	)		(44.2	)		(1.9	)		(50.3	)		—			(96.4	)		(51.2	)		(232.6	)		(75.6	)		—			(359.4	)

F-114

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Condensed Consolidating Statement of Cash Flows

	321-day period ended December 18, 2003														Year Ended January 31, 2003														Year Ended January 31, 2002
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations		Consoli- dated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations		Consoli- dated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations		Consoli- dated
FINANCING ACTIVITIES
Net variation in advances (to) from related parties	$	—		$	(73.2	)	$	(44.8	)	$	—	$	(118.0	)	$	—		$	21.9		$	(5.9	)	$	—	$	16.0		$	—		$	155.2		$	72.8		$	—	$	228.0
Net distribution from (to) Bombardier Inc.		191.9			167.3			8.6			—		367.8			(125.1	)		2.8			(18.4	)		—		(140.7	)		(23.6	)		—			(8.8	)		—		(32.4	)
Issuance of long-term debt		—			2.0			—			—		2.0			—			—			—			—		—			—			—			—			—		—
Repayment of long-term debt		—			—			(1.6	)		—		(1.6	)		—			—			(3.3	)		—		(3.3	)		—			—			(3.0	)		—		(3.0	)
Other liabilities		(3.0	)		—			0.4			—		(2.6	)		8.9			—			0.9			—		9.8			—			—			0.1			—		0.1
Cash flows from financing activities		188.9			96.1			(37.4	)		—		247.6			(116.2	)		24.7			(26.7	)		—		(118.2	)		(23.6	)		155.2			61.1			—		192.7
Effect of exchange rate changes on cash		0.3			3.9			16.2			—		20.4			—			2.7			8.2			—		10.9			—			(1.3	)		(4.0	)		—		(5.3	)
Net increase in cash		62.0			9.6			39.9			—		111.5			3.9			(3.8	)		11.6			—		11.7			(3.0	)		2.2			6.7			—		5.9
Cash at beginning of period		(0.4	)		2.4			26.7			—		28.7			(4.3	)		6.2			15.1			—		17.0			(1.3	)		4.0			8.4			—		11.1
Cash at end of period	$	61.6		$	12.0		$	66.6		$	—	$	140.2		$	(0.4	)	$	2.4		$	26.7		$	—	$	28.7		$	(4.3	)	$	6.2		$	15.1		$	—	$	17.0
Supplemental information
Cash paid for:
Interest	$	(0.5	)	$	1.0		$	2.7		$	—	$	3.2		$	0.1		$	2.9		$	1.9		$	—	$	4.9		$	—		$	3.3		$	0.8		$	—	$	4.1
Income taxes	$	—		$	0.3		$	5.1		$	—	$	5.4		$	—		$	1.8		$	2.8		$	—	$	4.6		$	—		$	0.1		$	22.0		$	—	$	22.1

F-115

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Summary of Differences Between Canadian and U.S. GAAP

As disclosed in note 22, the Financial Statements have been prepared in accordance with Canadian GAAP. As well, the supplemental condensed consolidating financial information has been prepared in accordance with Canadian GAAP which differs in certain respects from U.S. GAAP and related rules and regulations by the SEC. Such differences are summarized below.

Reconciliation of Condensed Balance Sheet Captions

			321-day period ended December 18, 2003														Year Ended January 31, 2003
			Parent					Guarantor Subsidiaries				Non-Guarantor Subsidiaries					Parent						Guarantor Subsidiaries					Non-Guarantor Subsidiaries
	Note		Canadian GAAP		U.S. GAAP			Canadian GAAP		U.S. GAAP		Canadian GAAP		U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP		U.S. GAAP			Canadian GAAP		U.S. GAAP
Property, plant and equipment	22	(d)(e)	$	124.6	$	124.6		$	165.4	$	165.4	$	134.4	$	143.0		$	124.0		$	123.0		$	199.9	$	199.9		$	140.3	$	149.1
Derivative financial assets	22	(c)		4.1		27.8			—		—		—		(0.3	)		—			11.2			—		—			—		—
Long-term deferred income tax assets	22	(f)		—		5.0			14.0		14.9		3.8		7.8			—			4.3			11.0		12.4			7.7		15.1
Other long-term assets	22	(a)(b)		7.7		32.6			4.8		4.8		52.0		12.6			11.4			33.6			5.5		5.2			49.1		12.5
Long-term debt	22	(e)		—		—			2.0		2.0		0.5		9.1			—			—			—		—			1.8		10.8
Employee future benefits liability	22	(b)		11.3		85.9			3.3		5.6		56.5		58.1			18.3			64.4			0.8		4.0			53.0		59.0
Other long-term liabilities	22	(c)		2.9		2.9			—		—		4.7		4.7			5.9			5.9			—		—			4.3		4.4
Long-term deferred income tax liabilities	22	(f)		3.1		—			1.5		2.2		10.0		—			0.2			—			—		—			7.1		—
Bombardier Inc.’s net investment				187.2		209.9			173.1		163.5		232.0		187.5			(33.3	)		(19.2	)		22.4		22.1			191.2		148.0
Accumulated other comprehensive income:
Minimum pension liability				—		(39.9	)		—		—		—		—			—			(22.3	)		—		(0.5	)		—		(2.9	)
Currency translation adjustment				—		—			—		7.6		—		17.1			—			—			—		(2.3	)		—		17.7
Total assets				473.9		527.5			415.9		416.8		464.8		437.7			312.1			348.8			427.2		428.3			437.0		416.6

F-116

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

The following table provides the details of the adjustments on the balance sheets for which more than one adjustment was required in order to conform with US GAAP:

		Increase (decrease)
		321-day period ended December 18, 2003								Year Ended January 31, 2003
	Note	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Adjustments under US GAAP on the balance sheets
Property, plant and equipment
Software costs (d)		$	—		$	—	$	—		$	(1.0	)	$	—		$	—
Sale of property, plant and equipment (e)			—			—		8.6			—			—			8.8
		$	—		$	—	$	8.6		$	(1.0	)	$	—		$	8.8
Other long-term assets
Development costs (a)		$	(0.9	)	$	—	$	(39.4	)	$	(1.3	)	$	—		$	(36.6	)
Employee future benefits (b)			25.8			—		—			23.5			(0.3	)		—
		$	24.9		$	—	$	(39.4	)	$	22.2		$	(0.3	)	$	(36.6	)

F-117

BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Reconciliation of Condensed Statement of Operations and Other Comprehensive Income (loss)

			321-day period ended December 18, 2003															Year Ended January 31, 2003														Year Ended January 31, 2002
	Note		Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations			Consoli- dated			Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Elimi- nations		Consoli- dated			Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Elimi- nations			Consoli- dated
Net income (loss) under Canadian GAAP			$	28.6		$	(22.3	)	$	28.8		$	(4.9	)	$	30.2		$	60.3		$	20.9		$	31.7		$	1.9	$	114.8		$	46.4		$	1.7	$	21.0		$	(2.5	)	$	66.6
Development costs	22	(a)		0.5			—			(2.7	)		—			(2.2	)		0.3			—			(6.2	)		—		(5.9	)		(0.1	)		—		(7.2	)		—			(7.3	)
Employee future benefits	22	(b)		(0.6	)		0.1			0.1			—			(0.4	)		(0.9	)		—			—			—		(0.9	)		(0.5	)		—		—			—			(0.5	)
Foreign exchange contracts	22	(c)		12.5			—			(0.2	)		—			12.3			31.6			—			0.1			—		31.7			(25.8	)		—		12.7			—			(13.1	)
Software costs	22	(d)		1.2			—			—			—			1.2			1.4			—			—			—		1.4			1.5			—		—			—			1.5
Total adjustments before the following:				13.6			0.1			(2.8	)		—			10.9			32.4			—			(6.1	)		—		26.3			(24.9	)		—		5.5			—			(19.4	)
Income tax expense	22	(f)		4.2			—			(0.9	)		—			3.3			10.6			—			(2.3	)		—		8.3			(8.3	)		—		2.1			—			(6.2	)
Total adjustments				9.4			0.1			(1.9	)		—			7.6			21.8			—			(3.8	)		—		18.0			(16.6	)		—		3.4			—			(13.2	)
Net income (loss) under US GAAP				38.0			(22.2	)		26.9			(4.9	)		37.8			82.1			20.9			27.9			1.9		132.8			29.8			1.7		24.4			(2.5	)		53.4
Minimum pension liability adjustment	22	(b)		(17.6	)		0.5			2.9			—			(14.2	)		(9.2	)		(0.4	)		(2.9	)		—		(12.5	)		(13.0	)		—		—			—			(13.0	)
Change in currency translation adjustment				—			9.9			(0.6	)		—			9.3			—			(3.3	)		17.8			—		14.5			—			3.6		(2.0	)		—			1.6
Comprehensive income (loss) under US GAAP			$	20.4		$	(11.8	)	$	29.2		$	(4.9	)	$	32.9		$	72.9		$	17.2		$	42.8		$	1.9	$	134.8		$	16.8		$	5.3	$	22.4		$	(2.5	)	$	42.0

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BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

23.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued)

Reconciliation of Condensed Statement of Cash Flows Categories for the Parent and Non-Guarantors Subsidiaries

			321-day period ended December 18, 2003												Year Ended January 31, 2003												Year Ended January 31, 2002
			Parent						Non-Guarantor Subsidiaries						Parent						Non-Guarantor Subsidiaries						Parent						Non-Guarantor Subsidiaries
	Note		Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP			Canadian GAAP			U.S. GAAP
Cash flow from operating activities	22	(a)(d)	$	(87.7	)	$	(87.7	)	$	89.4		$	84.7		$	164.3		$	163.8		$	80.4		$	72.4		$	71.8		$	70.8		$	25.2		$	16.7
Cash flow from investing activities	22	(a)(d)		(39.5	)		(39.5	)		(28.3	)		(23.6	)		(44.2	)		(43.7	)		(50.3	)		(42.3	)		(51.2	)		(50.2	)		(75.6	)		(74.7	)
Cash flow from financing activities	22	(e)		188.9			188.9			37.4			37.4			(116.2	)		(116.2	)		(26.7	)		(26.7	)		(23.6	)		(23.6	)		61.1			68.7

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BOMBARDIER RECREATIONAL PRODUCTS

NOTES TO FINANCIAL STATEMENTS—(Continued)

For the 321-day period ended December 18, 2003 and for the years ended January 31, 2003 and 2002

[Tabular figures in millions of Canadian dollars, except for option amounts]

24.    SUBSEQUENT EVENTS

Business acquisition

Pursuant to a purchase agreement dated December 2, 2003, on December 18, 2003, Bombardier Recreational Products Inc. (“the Successor”) acquired BRP for a total consideration of $806.3 million.

Details of the transaction have not been reflected in the Financial Statements for the 321-day period ended December 18, 2003 as this transaction occurred subsequent to the date of these.

Restructuring plan

Subsequent to December 18, 2003, in connection with the business acquisition disclosed above, Management decided to pursue certain restructuring activities for which the related plan has been preliminary assessed. The restructuring activities involve employee severance and relocation expenses, facilities shut down and consolidation costs.

25.    COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform to the presentation adopted in the current year.

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[BRP LOGO]

Bombardier Recreational Products Inc.

8 ³/8% Senior Subordinated Notes due 2013

PROSPECTUS

            , 2004

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Managers, Members, Directors and Officers

Canadian Registrants

Under the Canada Business Corporations Act, or the CBCA, a corporation may indemnify a present or former director or officer of such corporation or a person who acts or acted at the corporation’s request as a director or officer of another corporation of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been a director or officer of such corporation and provided that the director or officer acted honestly and in good faith with a view to the best interests of the corporation, and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful. Such indemnification may be made in connection with a derivative action only with court approval. A director or officer is entitled to indemnification from the corporation as a matter of right in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of a civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation if he was substantially successful on the merits in his defense of the action or proceeding and fulfilled the conditions set forth above.

Bombardier Recreational Products Inc.

In accordance with the CBCA, the company’s by-laws, a copy of which is filed as an exhibit to this registration statement, provide that the company may indemnify a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by such individual in respect of any civil, criminal or administrative, investigative or other proceeding in which the individual is involved because of that association with the company or other entity; and that the company may advance monies to such individual for the costs, charges and expenses of any such proceeding provided such individual agrees in advance, in writing, to repay monies if the individual does not (1) act honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, have reasonable grounds for believing that his or her conduct was lawful.

The company’s by-laws also provide that the company may not indemnify a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, unless the individual (1) acted honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his or her conduct was lawful; and that the company must seek the approval of a court to indemnify a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, or advance monies in respect of an action by or on behalf of the company or other entity to procure a judgment in its favor, to which such individual is made a party because of the individual’s association with the company or other entity, against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual (1) acts honestly and in good faith with a view to the best interests

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of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, has reasonable grounds for believing that his or her conduct was lawful; and that a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, is entitled to indemnity from the company in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the company or other entity, if the individual seeking indemnity (1) was not adjudged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done and acted honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be, and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his or her conduct was lawful.

The company’s by-laws further provide that the company may purchase and maintain insurance for the benefit of a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, against any liability incurred by the individual in the individual’s capacity as a director or officer of the company or in the individual’s capacity as a director or officer, or similar capacity, of another entity, if the individual acts or acted in that capacity at the request of the company.

The company’s policy of directors’ and officers’ liability insurance which insures directors and officers for losses as a result of claims based upon any error, misstatement, misleading statement, act, omission, neglect or breach of duty committed, attempted or allegedly committed or attempted as directors and officers of the company, including liabilities arising under the Securities Act, and also reimburses the company for payments made pursuant to the indemnity provisions under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the company pursuant to the foregoing provisions, the company has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

4186524 Canada Inc.

In accordance with the CBCA, the company’s by-laws, a copy of which is filed as an exhibit to this registration statement, provide that the company may indemnify a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by such individual in respect of any civil, criminal or administrative, investigative or other proceeding in which the individual is involved because of that association with the company or other entity; and that the company may advance monies to such individual for the costs, charges and expenses of any such proceeding provided such individual agrees in advance, in writing, to repay monies if the individual does not (1) act honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, have reasonable grounds for believing that his or her conduct was lawful.

The company’s by-laws also provide that the company may not indemnify a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, unless the individual (1) acted honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty,

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had reasonable grounds for believing that his or her conduct was lawful; and that the company must seek the approval of a court to indemnify a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, or advance monies in respect of an action by or on behalf of the company or other entity to procure a judgment in its favor, to which such individual is made a party because of the individual’s association with the company or other entity, against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual (1) acts honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, has reasonable grounds for believing that his or her conduct was lawful; and that a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, is entitled to indemnity from the company in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defense of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the company or other entity, if the individual seeking indemnity (1) was not adjudged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done and acted honestly and in good faith with a view to the best interests of the company or other entity for which the individual acted as a director of officer or in a similar capacity at the request of the company, as the case may be, and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his or her conduct was lawful.

The company’s by-laws further provide that the company may purchase and maintain insurance for the benefit of a director or officer of the company, a former director or officer of the company or any individual who acts or acted at the request of the company as a director or officer or in a similar capacity, of another entity, against any liability incurred by the individual in the individual’s capacity as a director or officer of the company or in the individual’s capacity as a director or officer, or similar capacity, of another entity, if the individual acts or acted in that capacity at the request of the company.

Nova Scotia Registrant

Under the Companies Act of Nova Scotia, a company must indemnify every director, manager, secretary, treasurer and other officer or servant of the company against, and it shall be the duty of the directors out of the funds of the Company to pay, all costs, losses and expenses that any such director, manager, secretary, treasurer or other officer or servant may incur or become liable to pay by reason of any contract entered into, or act or thing done by him as such officer or servant or in any way in the discharge of his duties including travel expenses, and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the company and have priority as against the members over all other claims. No director or other officer of the company shall, in the absence of any dishonesty on the part of the director or such other officer, be liable for the acts, receipts, neglects or defaults of any other director or officer, or for joining in any receipt or other act for conformity, or for any loss or expense happening to the company through the insufficiency or deficiency of title to any property acquired by order of the directors for or on behalf of the company, or through the insufficiency or deficiency of any security in or upon which any of the moneys of the company are invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any moneys, securities or effects are deposited, or for any loss occasioned by error of judgment or oversight on his or her part, or for any other loss, damage or misfortune whatsoever which happens in the execution of the duties of his or her office or in relation thereto.

BRP Nova Scotia ULC

In accordance with the Companies Act of Nova Scotia, the company’s articles of association, a copy of which is filed as an exhibit to this registration statement, provide that the company must indemnify every director

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or officer, former director of officer, or person who acts or acted at the request of the company, as a director or officer of the company, a body corporate, partnership or other association of which the company is or was a shareholder, partner, member or creditor, and the heirs and legal representatives of such person, in the absence of any dishonesty on the part of such person against, and it shall be the duty of the directors out of the funds of the company to pay, all costs, losses and expenses, including an amount paid to settle an action or claim or satisfy a judgment, that such director, officer or person may incur or become liable to pay in respect of any claim made against such person or civil, criminal or administrative action or proceeding to which such person is made a party by reason of being or having been a director or officer of the company or such body corporate, partnership or other association, whether the company is a claimant or party to such action or proceeding or otherwise; and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the company and have priority as against the shareholders over all other claims.

The company’s articles of association also provide that no director or officer, former director of officer, or person who acts or acted at the request of the company, as a director or officer of the company, a body corporate, partnership or other association of which the company is or was a shareholder, partner, member or creditor, in the absence of any dishonesty on such person’s part, shall be liable for the acts, receipts, neglects or defaults of any other director, officer or such person, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to the company through the insufficiency or deficiency of title to any property acquired for or on behalf of the company, or through the insufficiency or deficiency of any security in or upon which any of the funds of the company are invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any funds, securities or effects are deposited, or for any loss occasioned by error of judgment or oversight on the part of such person, or for any other loss, damage or misfortune whatsoever which happens in the execution of the duties of his or her office or in relation thereto.

Delaware Registrants

Under Section 145 of the Delaware General Corporation Law, or DGCL, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, other than an action by or in the right of the corporation, because such person is or was a director, officer, employee or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reason to believe his conduct was unlawful. Similar indemnification is authorized for such persons against expenses, including attorneys’ fees, actually and reasonably incurred in defense or settlement of any such pending, completed or threatened action or suit by or in the right of the corporation if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that, unless a court of competent jurisdiction otherwise provides, such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct.

Under the DGCL, a corporation also may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would otherwise have the power to indemnify him.

Under the Delaware Revised Uniform Limited Partnership Act, subject to such standards and restrictions, if any, as are set forth in its partnership agreement, a partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever.

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Under the Delaware Limited Liability Company Act, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.

BRP US Inc.

In accordance with Section 145 the DGCL, the corporation’s certificate of incorporation, a copy of which is filed as an exhibit to this registration statement, provides that the corporation must indemnify each person who at any time is or shall have been a director, officer, employee or agent of the corporation and is threatened to be or is made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, trustee or agent of another corporation, partnership, join venture, trust or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any such action, suit or proceeding to the fullest extent authorized under Section 145 of the DGCL; and that the foregoing right of indemnification shall in no way be exclusive of any other rights of indemnification to which such director, officer, employee or agent may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise.

BRP Holdings (USA) Inc.

In accordance with Section 145 of the DGCL, the corporation’s certificate of incorporation, a copy of which is filed as an exhibit to this registration statement, provides that the corporation must, to the maximum extent permitted from time to time under law of the State of Delaware, indemnify and upon request advance expenses to any person who is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or claim, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was or has agreed to be a director or officer of the corporation or while a director or officer is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorney’s fees and expenses), judgments, fines, penalties and amounts paid in settlement incurred (and not otherwise recovered) in connection with the investigation, preparation to defend or defense of such action, suit, proceeding or claim; provided, however, that the foregoing shall not require the corporation to indemnify or advance expenses to any person in connection with any action, suit, proceeding, claim or counterclaim initiated by or on behalf of such person; and that such indemnification shall not be exclusive of other indemnification rights arising under any by-law, agreement, vote of directors or stockholders or otherwise and shall inure o the benefit of the heirs and legal representatives of such person; and that any person seeking indemnification under this provision shall be deemed to have met the standard of conduct required for such indemnification unless the contrary shall be established; and that any repeal or modification of the foregoing provisions shall not adversely affect any right or protection of the directors or officers of the corporation with respect to any acts or omissions of such director or officer occurring prior to such repeal or modification.

BRP Holding LP

In accordance with the Delaware Revised Uniform Limited Partnership Act, the partnership’s certificate of limited partnership and partnership agreement, a copy of which is filed as an exhibit to this registration statement, do not provide for indemnification.

BRP LLC

In accordance with the Delaware Limited Liability Company Act, the company’s limited liability company agreement, a copy of which is filed as an exhibit to this registration statement, provides that the company must

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indemnify, defend and hold harmless each member and any director, officer, partner, stockholder, controlling person or employee of any member, each manager and any person serving at the request of the company as a director, officer, employee, partner, trustee or independent contractor of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (all of the foregoing persons being referred to collectively as “Indemnified Persons” and individually as “Indemnified Person”) from any liability, loss or damage incurred by the Indemnified Person by reason of any act performed or omitted to be performed by the Indemnified Person in connection with the business of the company and from the liabilities or obligations of the company imposed on such Indemnified Person by virtue of such Indemnified Person’s position with the company, including reasonable attorney’s fees and costs and any amounts expended in the settlement of any such claims of liability, loss or damage; provided, however, that if the liability, loss, damage or claim arises out of any action or inaction of an Indemnified Person, indemnification under this section shall be available only if (1) either the Indemnified Person, at the time of such action or inaction, determined in good faith that its, his or her course of conduct was in, or not opposed to, the best interests of the company or in the case of inaction by the Indemnified Person, the Indemnified Person did not intend its, his or her inaction to be harmful or opposed to the best interests of the company and (2) the action or inaction did not constitute fraud, gross negligence or willful misconduct by the Indemnified Person; provided, further, however, that the indemnification under this section shall be recoverable only from the assets of the company and not from any assets of the member; and that unless the Board determines in good faith that the Indemnified Person is unlikely to be entitled to indemnification under this section the company shall pay or reimburse reasonable attorney’s fees of an Indemnified Person as incurred, provided that such Indemnified Person executes an undertaking, with appropriate security if requested by the Board, to repay the amount so paid or reimbursed in the event that final non-appealable determination by a court of competent jurisdiction that such Indemnified Person is not entitled to indemnification under this section; and that the company may pay for insurance covering liability of the Indemnified Person for negligence in operation of the affairs of the company; and that any person who is within the definition of “Indemnified Person” at the time of any action or inaction in connection with the business of the company shall be entitled to the benefits of this section as an “Indemnified Person” with respect thereto, regardless of whether such person continues to be with the definition of “Indemnified Person” at the time of such Indemnified Person’s claim for indemnification or exculpation hereunder.

Barbadian Registrants

Under the Companies Act of Barbados, a company, except in respect of an action by or on behalf of a company or body corporate to obtain a judgment in its favor, may indemnify a director or officer of the company, a former director or officer of the company or a person who acts or acted at the company’s request as a director or officer of a body corporate of which the company is or was a shareholder or creditor, and his legal representatives, against all costs, charges and expenses (including an amount paid to settle an action or satisfy a judgment) reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being, or having been, a director or officer of that company or body corporate, provided that the director or officer to be so indemnified acted honestly and in good faith with a view to the best interests of the company and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty had reasonable grounds for believing that his conduct was lawful; and with the approval of the court may indemnify a director or officer of the company, a former director or officer of the company or a person who acts or acted at the company’s request as a director or officer of a body corporate of which the company is or was a shareholder or creditor in respect of an action by or on behalf of the company or body corporate to obtain a judgment in its favor and to which he is made a party by reason of being or having been a director or an officer of the company or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with the action, if he acted honestly and in good faith with a view to the best interests of the company and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty had reasonable grounds for believing that his conduct was lawful.

Notwithstanding the above mentioned indemnification provisions, a company under the Companies Act of Barbados must indemnify a director or officer of the company, a former director or officer of the company or a

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person who acts or acted at the company’s request as a director or officer of a body corporate of which the company is or was a shareholder or creditor in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being, or having been, a director or officer of the company or body corporate, if the person seeking indemnity was substantially successful on the merits in his defense of the action or proceeding, acted honestly and in good faith with a view to the best interests of the company and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty had reasonable grounds for believing that his conduct was lawful, and is fairly and reasonably entitled to indemnity.

BRP (Barbados) Inc.

In accordance with the Companies Act of Barbados, the company’s by-laws, a copy of which is filed as an exhibit to this registration statement, provide that, except in respect of an action by or on behalf of the company to obtain a judgment in its favor, the company must indemnify a director or officer of the company; a former director or officer of the company; a person who acts or acted at the request of the company as a director or officer of a body corporate of which the company is or was a shareholder or creditor; and the personal representatives of each; against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of such company, provided that (1) he acted honestly and in good faith with a view to the best interests of the company and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful; and that, with the approval of the court, in respect of an action by or on behalf of the company to obtain a judgment in favor of the company, the company must indemnify a director or officer of the company; a former director or officer of the company; a person who acts or acted at the request of the company as a director or officer of a body corporate of which the company is or was a shareholder or creditor; and the personal representatives of each; to which such person is made a party by reason of being or having been a director of the company or body corporate, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any action or proceeding, provided that (1) he acted honestly and in good faith with a view to the best interests of the company and (2) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful; and that the company must indemnify a director or officer of the company; a former director or officer of the company; a person who acts or acted at the request of the company as a director or officer of a body corporate of which the company is or was a shareholder or creditor; and the personal representatives of each; to which such person is made a party by reason of being or having been a director of the company or body corporate, against all costs, charges and expenses reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of such company, provided that (1) he was substantially successful on the merits in his defense of the action or proceeding, (2) he acted honestly and in good faith with a view to the best interests of the company and (3) he is fairly and reasonably entitled to indemnity.

The company’s by-laws also provide that the company may insure or obtain third-party insurance for the benefit of a director or officer of the company; a former director or officer of the company; a person who acts or acted at the request of the company as a director or officer of a body corporate of which the company is or was a shareholder or creditor; and the personal representatives of each; against any liability incurred by him in his capacity of a director or officer of the company for failure to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Luxembourg Registrants

Under the laws of Luxembourg, a company is not required to indemnify, or prohibited from indemnifying, its directors and officers for any liability in respect of negligence, default, breach of duty or breach of trust in relation to the company.

II-7

BRP (Luxembourg) 1 S.ar.l.

In accordance with the laws of Luxembourg, the Articles of the company’s Constitution de Societe, a copy of which is filed as an exhibit to this registration statement, provide that the company’s managers assume, by reason of their mandate, no personal liability in relation to any commitment validly made by them in the name of the company, provided such commitment is in compliance with the articles of the company as well as the applicable provisions of the law.

BRP (Luxembourg) 2 S.ar.l.

In accordance with the laws of Luxembourg, the Articles of the company’s Constitution de Societe, a copy of which is filed as an exhibit to this registration statement, provide that the company’s managers assume, by reason of their mandate, no personal liability in relation to any commitment validly made by them in the name of the company, provided such commitment is in compliance with the articles of the company as well as the applicable provisions of the law.

BRP (Luxembourg) 3 S.ar.l.

In accordance with the laws of Luxembourg, the Articles of the company’s Constitution de Societe, a copy of which is filed as an exhibit to this registration statement, provide that the company’s managers assume, by reason of their mandate, no personal liability in relation to any commitment validly made by them in the name of the company, provided such commitment is in compliance with the articles of the company as well as the applicable provisions of the law.

BRP (Luxembourg) 4 S.ar.l.

In accordance with the laws of Luxembourg, the Articles of the company’s Constitution de Societe, a copy of which is filed as an exhibit to this registration statement, provide that the company’s managers assume, by reason of their mandate, no personal liability in relation to any commitment validly made by them in the name of the company, provided such commitment is in compliance with the articles of the company as well as the applicable provisions of the law.

BRP (Luxembourg) 5 S.ar.l.

In accordance with the laws of Luxembourg, the Articles of the company’s Constitution de Societe, a copy of which is filed as an exhibit to this registration statement, provide that the company’s managers assume, by reason of their mandate, no personal liability in relation to any commitment validly made by them in the name of the company, provided such commitment is in compliance with the articles of the company as well as the applicable provisions of the law.

Mexican Registrant

Under Mexican law, a corporation must indemnify an officer or director against any liabilities or expenses resulting from actions taken within the scope of his authority.

Bombardier Mexico S.A. de C.V.

There are no additional indemnification provisions in the bylaws of the company, a copy of which is filed as an exhibit to this registration statement.

Australian Registrant

Under the Companies Act 2001 of Australia, a company must not (1) exempt a person (whether directly or through an interposed entity) from a liability to the company incurred as an officer or auditor of the company; (2) indemnify a person (whether by agreement or by making a payment and whether directly or through an

II-8

interposed entity) against any liability incurred as an officer or auditor of the company owed to the company or a related body corporate, for a pecuniary penalty order under section 1317G or a compensation order under section 1317H or owed to someone other than the company or a related body corporate that did not arise out of conduct in good faith; or (3) indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against legal costs incurred in defending an action for a liability incurred as an officer or auditor of the company if the costs are incurred in defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under subsection (2), in defending or resisting criminal proceedings in which the person is found guilty, in defending or resisting proceedings brought by the Australian Securities and Investments Commission (ASIC) or a liquidator for a court order if the grounds for making the order are found by the court to have been established, except for costs incurred in responding to actions taken by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order, or in connection with proceedings for relief to the person under the Companies Act 2001 in which the Court denies the relief. Subsection (2) does not apply to legal costs. For the purpose of subsection (3), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.

BRP Australia Pty Ltd.

In accordance with the Companies Act 2001 of Australia, the company’s constitution, a copy of which is filed as an exhibit to this registration statement, provides that the company indemnify, to the extent permitted by law and subject to the restrictions of Section 199A of the Corporations Law of Australia, every person who is or has been an officer, director or secretary of the company or a subsidiary against (1) any liability (other than a liability for legal costs) incurred by that person as such an officer, director or secretary of the company or a subsidiary and (2) reasonable legal costs incurred in defending an action for a liability incurred by that person as such an officer, director or secretary of the company or a subsidiary.

Japanese Registrant

Under the laws of Japan, any director or corporate auditor of a company may (1) demand advance payment of expenses which are considered necessary for the management of the affairs of such company entrusted to him, (2) demand reimbursement from the company for any defrayed expenses considered necessary for the management of the affairs of such company entrusted to him, (3) require the company to perform in his place an obligation necessary for the management of the affairs entrusted to him if he has assumed such obligation or, if such obligation is not due, to furnish adequate security and (4) demand compensation from the company for damage he sustains, without any fault on his part, through the management of the affairs entrusted to him. A company may not refuse a demand from a corporate auditor referred to in subsections (1) through (3) above unless the company establishes that the relevant expense or obligation was or is not necessary for the performance of the corporate auditor’s duties.

BRP Japan Co. Ltd.

There are no additional indemnification provisions in the company’s articles of incorporation, a copy of which is filed as an exhibit to this registration statement.

II-9

Item 21. Exhibits and Financial Statement Schedules

EXHIBIT INDEX

Exhibit No.	Description
2.1*	Purchase Agreement between Bombardier Inc. as Vendor and 4186516 Canada Inc. as Purchaser, dated as of December 2, 2003
3.1*	Articles of Incorporation of Bombardier Recreational Products Inc.
3.2*	Bylaws of Bombardier Recreational Products Inc.
3.3*	Articles of Incorporation of 4186524 Canada Inc.
3.4*	Bylaws of 4186524 Canada Inc.
3.5*	Certificate of Registration and Articles of Association of BRP Nova Scotia ULC
3.6*	Certificate of Incorporation of BRP US Inc., including all amendments thereto
3.7*	Bylaws of BRP US Inc.
3.8*	Certificate of Incorporation of BRP Holdings (USA) Inc., including all amendments thereto
3.9*	Bylaws of BRP Holdings (USA) Inc.
3.10*	Certificate of Limited Partnership of BRP Holding LP
3.11*	Agreement of Limited Partnership of BRP Holding LP, dated as of December 4, 2003
3.12*	Certificate of Formation of BRP LLC
3.13*	Limited Liability Company Agreement of BRP LLC, dated as of December 5, 2003
3.14*	Articles of Incorporation of BRP (Barbados) Inc., including all amendments thereto
3.15*	Bylaws of BRP (Barbados) Inc.
3.16*	Deed of Incorporation of BRP (Luxembourg) 1 S.ar.l.
3.17*	Deed of Incorporation of BRP (Luxembourg) 2 S.ar.l.
3.18*	Deed of Incorporation of BRP (Luxembourg) 3 S.ar.l.
3.19*	Deed of Incorporation of BRP (Luxembourg) 4 S.ar.l.
3.20*	Deed of Incorporation of BRP (Luxembourg) 5 S.ar.l.
3.21	Articles of Incorporation and Bylaws of BRP Mexico S.A. de C.V., including all amendments thereto
3.22*	Articles of Incorporation and Bylaws of BRP Australia Pty Ltd., including all amendments thereto
3.23*	Articles of Incorporation of BRP Japan Ltd., including all amendments thereto
4.1*	Indenture with respect to the 8 3/8% Senior Subordinated Notes due 2013 between Bombardier Recreational Products Inc., the Guarantors listed on the signature pages thereto and U.S. Bank, National Association as Trustee, dated December 18, 2003
4.2*	Supplemental Indenture, dated as of March 12, 2004, among Bombardier (Mexico) S.A. de C.V., Bombardier Recreational Products Inc., the Other Guarantors and U.S. Bank, National Association as Trustee
4.3*	Supplemental Indenture, dated as of March 12, 2004, among Bombardier Recreational Products Australia Pty Ltd., Bombardier Recreational Products Inc., the Other Guarantors and U.S. Bank, National Association as Trustee

* Previously filed.

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Exhibit No.		Description
4.4	*	Supplemental Indenture, dated as of March 12, 2004, among Bombardier Recreational Products Japan Co. Ltd., Bombardier Recreational Products Inc., the Other Guarantors and U.S. Bank, National Association as Trustee
4.5	*	Form of 8 3/8% Senior Subordinated Notes due 2013 (included in Exhibit 4.1)
5.1		Opinion of Ropes & Gray LLP regarding the validity of the exchange notes
10.1	*	Purchase Agreement among Bombardier Recreational Products Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and the Initial Purchasers named therein, dated December 11, 2003
10.2	*	Joinder Agreement signed by 4186524 Canada Inc., 4145321 Canada Inc., BRP Nova Scotia ULC, Bombardier Motor Corporation of America, BRP (USA) Inc., BRP Holding LP, BRP LLC, BRP (Barbados) Inc., BRP (Luxembourg) 1 S.ar.l., BRP (Luxembourg) 2 S.ar.l., BRP (Luxembourg) 3 S.ar.l., BRP (Luxembourg) 4 S.ar.l., BRP (Luxembourg) 5 S.ar.l., dated as of December 18, 2003
10.3	*	Joinder Agreement, dated as of March 12, 2004, executed by Bombardier (Mexico) S.A. de C.V
10.4	*	Joinder Agreement, dated as of March 12, 2004, executed by Bombardier Recreational Products Japan Co. Ltd.
10.5	*	Joinder Agreement, dated as of March 12, 2004, executed by Bombardier Recreational Products Australia Pty Ltd.
10.6	*	Registration Rights Agreement by and among Bombardier Recreational Products Inc., the Guarantors named therein and Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated December 18, 2003
10.7	*	Credit Agreement dated as of December 18, 2003, among Bombardier Recreational Products Inc., BRP (USA) Inc., BRP Holding LP, J.A. Bombardier (J.A.B.) Inc. and the other Guarantors named therein, The Lenders Named Therein and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Global Transaction Coordinator, Royal Bank of Canada, as Canadian Transaction Coordinator, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC, as Joint Book Runners and Lead Arrangers of the Term Facilities, BMO Nesbitt Burns Inc. and Royal Bank of Canada as Joint Book Runners and Lead Arrangers of the Revolving Facilities, Bank of Montreal, as Administrative Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC and Royal Bank of Canada as Co-Syndication Agents, General Electric Capital Corporation, as Documentation Agent
10.8	*	U.S. Security Agreement by BRP (USA) Inc., as U.S. Revolving Borrower and BRP Holding LP, as U.S. Term Borrower, the Guarantors named therein and Bank of Montreal, as Administrative Agent, dated as of December 18, 2003
10.9	*	Canadian Security Agreement by Bombardier Recreational Products Inc., as Canadian Borrower, the Guarantors named therein and Bank of Montreal, as Administrative Agent, dated as of December 18, 2003
10.10		License Agreement dated December 18, 2003 between Bombardier Inc., as Trade-mark Owner, and 4145321 Canada Inc., as Licensee
10.11		Second Amended and Restated Wholesale Financing Agreement, dated as of December 18, 2003, by and between Bombardier Motor Corporation of America and Bombardier Capital Inc.
10.12		Amended and Restated Wholesale Financing Agreement, dated as of December 18, 2003, by and between 6090851 Canada Inc. and Bombardier Capital Inc.
10.13		Purchase Agreement, dated as of December 18, 2003, among Bombardier Motor Corporation of America, Bombardier Nordtrac AB, Bombardier Nordtrac AS and Bombardier-Nordtrac OY and Bombardier Recreational Products Inc. and BRP Receivables Funding, LLC.

* Previously filed.

II-11

Exhibit No.		Description
10.14		Receivables Purchase Agreement, dated as of December 18, 2003, among BRP Receivables Funding, LLC and Bombardier Capital Inc. and Bombardier Motor Corporation of America, Bombardier Nordtrac AB, Bombardier Nordtrac AS and Bombardier-Nordtrac OY and Bombardier Recreational Products Inc.
10.15	*	J. A. Bombardier (J.A.B.) Inc. Management Option Plan, dated March 31, 2004
10.16		Unanimous Shareholders Agreement among J. A. Bombardier (J.A.B.) Inc., Bombardier Recreational Products Inc., and the shareholders of J. A. Bombardier (J.A.B.) Inc., dated as of December 18, 2003.
10.17		Management Agreement among J. A. Bombardier (J.A.B.) Inc., Bombardier Recreational Products Inc., Beaudier Inc., Bain Capital Partners, LLC and Caisse de dépôt et placement du Québec, dated as of December 18, 2003.
12.1		Computation of Ratio of Earnings to Fixed Charges
21.1	*	Subsidiaries of Bombardier Recreational Products Inc.
23.1		Consent of Ropes & Gray LLP (see Exhibit 5.1.)
23.2		Consent of Ernst & Young LLP
24.1		Powers of Attorney (see signature pages of the Registration Statement)
25.1	*	Statement on Form T-1 as to the Eligibility of the Trustee.
99.1		Form of Letter of Transmittal.
99.2	*	Form of Notice of Guaranteed Delivery.

* Previously filed.

Item 22. Undertakings

(a) Each of the undersigned registrants hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more that a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-12

(4) If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to paragraph (a)(4) of Item 512 of Regulation S-K and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act of Rule 3-19 of Item 512 of Regulation S-K if such financial statements and information are contained in periodic reports filed with or furnished pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

(b) Each of the undersigned registrants hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 22 or 13 of Form F-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(c) Each of the undersigned registrants hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) Insofar as indemnification for liabilities arising under Securities Act of 1933 may be permitted to directors, officers and controlling persons of each of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by either of the registrants of expenses incurred or paid by a director, officer or controlling person of either of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each of the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-13

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BOMBARDIER RECREATIONAL PRODUCTS INC.

/s/    JOSÉ BOISJOLI        

José Boisjoli

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	President (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Chief Financial Officer (Principal Financial and Accounting Officer)	September 3, 2004
* Laurent Beaudoin	Chairman of the Board	September 3, 2004
* Joshua Bekenstein	Director	September 3, 2004
* Matthew Levin	Director	September 3, 2004
* Luc Houle	Director	September 3, 2004
* Pierre Beaudoin	Director	September 3, 2004

II-14

Signature	Title	Date
* J.R. André Bombardier	Director	September 3, 2004
* Jordan Hitch	Director	September 3, 2004
* Mark Nunnelly	Director	September 3, 2004
* Pierre Michaud	Director	September 3, 2004
* Nicholas Nomicos	Director	September 3, 2004
Daniel J. O’Neill	Director
Jean Gaulin	Director
Carlos Mazzorin	Director
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-15

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

4186524 CANADA INC.

/s/    JOSÉ BOISJOLI        

José Boisjoli

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	President (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Treasurer (Principal Financial and Accounting Officer)	September 3, 2004
* Laurent Beaudoin	Director	September 3, 2004
* Joshua Bekenstein	Director	September 3, 2004
* Matthew Levin	Director	September 3, 2004
* Luc Houle	Director	September 3, 2004
*/s/    LOUIS MORIN Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-16

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP NOVA SCOTIA ULC

*

Laurent Beaudoin

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Laurent Beaudoin	President and Director (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Treasurer and Director (Principal Financial and Accounting Officer)	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-17

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP US INC.

/s/    JOSÉ BOISJOLI        

José Boisjoli

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	President and Director (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Chief Financial Officer (Principal Financial and Accounting Officer)	September 3, 2004
* Roch Lambert	Director	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP HOLDINGS (USA) INC.

*

Roch Lambert

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Roch Lambert	President and Chairman of the Board (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Vice President, Finance and Treasurer (Principal Financial and Accounting Officer)	September 3, 2004
* Jacques Lévesque	Director	September 3, 2004
* Matthew Levin	Director	September 3, 2004
*/s/    LOUIS MORIN Louis Morin Attorney-in-Fact		September 3, 2004

II-19

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP HOLDING LP

By: Bombardier Recreational Products Inc.,

its General Partner

/s/    JOSÉ BOISJOLI        

José Boisjoli

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	President of Bombardier Recreational Products Inc., its general partner (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Chief Financial Officer of Bombardier Recreational Products Inc., its general partner (Principal Financial and Accounting Officer)	September 3, 2004
* Laurent Beaudoin	Chairman of the Board of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Joshua Bekenstein	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Matthew Levin	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004

II-20

Signature	Title	Date
* Luc Houle	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Pierre Beaudoin	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* J.R. André Bombardier	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Jordan Hitch	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Mark Nunnelly	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Pierre Michaud	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
* Nicholas Nomicos	Director of Bombardier Recreational Products Inc., its General Partner	September 3, 2004
Daniel J. O’Neill	Director of Bombardier Recreational Products Inc., its General Partner
Jean Gaulin	Director of Bombardier Recreational Products Inc., its General Partner
Carlos Mazzorin	Director of Bombardier Recreational Products Inc., its General Partner
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

II-21

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP LLC

*

Roch Lambert

Manager

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Roch Lambert	Manager	September 3, 2004
* Jacques Lévesque	Manager	September 3, 2004
* Matthew Levin	Manager	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

II-22

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP (BARBADOS) INC.

*

Roch Lambert

President

POWER OF ATTORNEY

The undersigned directors and officers of BRP (Barbados) Inc., hereby appoint José Boisjoli and Louis Morin, or either of them individually, as attorney-in-fact for the undersigned, with full power of substitution for, and in the name, place and stead of the undersigned, to sign and file with the Securities and Exchange Commission under the Securities Act, any and all amendments (including post-effective amendments) and exhibits to this registration statement on Form F-4 and any and all applications and other documents to be filed with the Securities and Exchange Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite and necessary or desirable, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Roch Lambert	President (Principal Executive Financial and Accounting Officer)	September 3, 2004
* Andrew C. Ferreira	Director	September 3, 2004
* Trevor A. Carmichael	Director	September 3, 2004
* Matthew Levin	Director	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-23

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP (LUXEMBOURG) 1 S.AR.L.

*

Jacques Lévesque

Sole Manager

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Jacques Lévesque	Sole Manager (Principal Executive, Financial and Accounting Officer)	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-24

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP (LUXEMBOURG) 2 S.AR.L.

*

Jacques Lévesque

Sole Manager

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Jacques Lévesque	Sole Manager (Principal Executive, Financial and Accounting Officer)	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-25

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP (LUXEMBOURG) 3 S.AR.L.

*

Jacques Lévesque

Sole Manager

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Jacques Lévesque	Sole Manager (Principal Executive, Financial and Accounting Officer)	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-26

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP (LUXEMBOURG) 4 S.AR.L.

*

Jacques Lévesque

Sole Manager

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Jacques Lévesque	Sole Manager (Principal Executive, Financial and Accounting Officer)	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-27

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP (LUXEMBOURG) 5 S.AR.L.

*

Jacques Lévesque

Director

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
* Jacques Lévesque	Director	September 3, 2004
* Olivier Vander Borght	Assistant Manager and Director (Principal Executive Officer)	September 3, 2004
* Bart Vandenborre	Manager and Director (Principal Financial and Accounting Officer)	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-28

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP MEXICO S.A. DE C.V.

/s/    JOSÉ BOISJOLI        

José Boisjoli

President

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	President (Principal Executive Officer)	September 3, 2004
* Gilles Blais	Treasurer (Principal Financial and Accounting Officer)	September 3, 2004
* Roch Lambert	Director	September 3, 2004
*/s/    JOSÉ BOISJOLI         José Boisjoli Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    JOSÉ BOISJOLI         José Boisjoli President	Authorized Representative in the United States	September 3, 2004

II-29

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP AUSTRALIA PTY LTD.

/s/    JOSÉ BOISJOLI        

José Boisjoli

President

POWER OF ATTORNEY

The undersigned directors and officers of BRP Australia Pty Ltd., hereby appoint José Boisjoli and Louis Morin, or either of them individually, as attorney-in-fact for the undersigned, with full power of substitution for, and in the name, place and stead of the undersigned, to sign and file with the Securities and Exchange Commission under the Securities Act, any and all amendments (including post-effective amendments) and exhibits to this registration statement on Form F-4 and any and all applications and other documents to be filed with the Securities and Exchange Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite and necessary or desirable, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	Director	September 3, 2004
* Roch Lambert	Director	September 3, 2004
* John Pegg	Director	September 3, 2004
* Michel Hade	Director	September 3, 2004
/S/    DAVID PETER HEYES         David Peter Heyes	Principal Executive Officer	September 3, 2004
/S/    HERVE TURGEON         Herve Turgeon	Principal Financial and Accounting Officer	September 3, 2004
*/s/    JOSÉ BOISJOLI         José Boisjoli Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    JOSÉ BOISJOLI         José Boisjoli President	Authorized Representative in the United States	September 3, 2004

II-30

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Montreal, Quebec, Canada, on September 3, 2004.

BRP JAPAN LTD.

/s/    JOSÉ BOISJOLI        

José Boisjoli

Director

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.

Signature	Title	Date
/s/    JOSÉ BOISJOLI         José Boisjoli	Director (Principal Executive Officer)	September 3, 2004
/s/    LOUIS MORIN         Louis Morin	Statutory Auditor (Principal Financial and Accounting Officer)	September 3, 2004
* Michel Hade	Director	September 3, 2004
* Kiyoshi Nobuhara	Director	September 3, 2004
*/s/    LOUIS MORIN         Louis Morin Attorney-in-Fact		September 3, 2004

	BRP US Inc.
By:	/s/    LOUIS MORIN         Louis Morin Chief Financial Officer	Authorized Representative in the United States	September 3, 2004

II-31

EX-3.21

[odd pages]

[stamp]

UNITED MEXICAN STATES

ALFONSO SALINAS FLORES

NOTARY PUBLIC NO. 135

REYNOSA TAMAULIPAS

Lic. Alfonso Salinas Flores

Notary Public No. 135

Michoacan No. 590 Ote.

Col. Rodriguez

Cd. Reynosa Tam.

Telephone Nos.: 89-22-18-27

89-22-52-67

89-22-35-27

[left and right margin, odd pages]

COMPARED

VOLUME LXXIX SEVEN HUNDRED NINE

PUBLIC DEED NO. 1984 ONE THOUSAND NINE HUNDRED EIGHTY-FOUR.

PAGE NO. 129 ONE HUNDRED TWENTY-NINE.

In the city of Reynosa, State of Tamaulipas, United Mexican States, at 9:00 nine a.m. on the 9^th ninth of September of 1997 nineteen ninety-seven, BEFORE ME, LICENCIADO ALFONSO SALINAS FLORES, NOTARY PUBLIC NO. 135 ONE HUNDRED THIRTY-FIVE, legally practicing in this City, there appeared Licenciado JORGE A. GARCÍA ADAME, representing BOMBARDIER INC., and Licenciado MARIO PERELA RIVEROLL, representing BOMBARDIER MOTOR CORPORATION OF AMERICA, and they tell me that they appear before the undersigned in order to organize a VARIABLE CAPITAL CORPORATION (SOCIEDAD ANONIMA DE CAPITAL VARIABLE), which they submit to the provisions of Mexican law according to the following background and clauses:

BACKGROUND

ONE. The parties appearing before me state that Permit No. 09020633 zero nine zero two zero six six three three, File No. 0902633 zero nine zero two zero six three three Page No. 20739 two zero seven three nine dated the 4^th fourth of June of 1997 nineteen ninety-seven was applied for and obtained from the Secretariat of Foreign Relations for the organization of a VARIABLE CAPITAL CORPORATION (SOCIEDAD ANONIMA DE CAPITAL VARIABLE) that will be called BOMBARDIER (MEXICO), S.A. DE C.V., the original of which document is added to the appendix marked with the letter “A.” Attached is also a copy of payment receipt No. 1508347 one five zero eight three four seven, covering the fees to issue the permit in question, which copy is attached to this instrument as attachment “B.”

TWO. The parties appearing before me add that, in order to formalize the company’s organization, they execute the following:

CLAUSE ONE OF ONE

Mr. JORGE A. GARCÍA ADAME, representing BOMBARDIER INC., and Mr. MARIO PERELA RIVEROLL, representing BOMBARDIER MOTOR CORPORATION OF AMERICA, organize a VARIABLE CAPITAL CORPORATION, executing the following:

BY-LAWS

CHAPTER ONE

NAME, REGISTERED OFFICE, PURPOSE, DURATION AND NATIONALITY

ARTICLE ONE. LEGAL SCHEME. The Company will be governed by the following bylaws and, for all matters not contemplated therein, by the applicable provisions of the General Law of Commercial Companies.

ARTICLE TWO. NAME. The name of the company is BOMBARDIER (MEXICO), and it will always be followed by the words “SOCIEDAD ANONIMA DE CAPITAL VARIABLE” or their abbreviation “S.A. DE C.V.”

ARTICLE THREE. REGISTERED OFFICE. The Company’s registered office will be the City of Reynosa, Tamaulipas, Mexico, and it may establish agencies, branches or representative offices in any other place in the Mexican Republic or abroad, and submit to contractual addresses.

ARTICLE FOUR. CORPORATE PURPOSE. The company’s purpose shall not include those activities restricted for companies with Foreign Investment in accordance with the laws of Mexico. The corporate purpose includes the following activities: 1.-Manufacture, assembly, distribution and sale of motorized products and their components; 2.- Importation, exportation, sale, assembly, transformation, manufacture and trade of all manner of materials, parts, components, assemblies, subassemblies, accessories, equipment and machinery used in the design, manufacture, assembly (partial and total), distribution and sale of motorized products and their components, including the search for potential suppliers; 3.- Actively promoting the sale of third parties in Mexico; 4.-Implementing various business and economic agreements in the field of business and others; 5.-Seeking opportunities for future development of cooperation, expanding the economic, commercial and technological exchange of information and the development of business and economic links with third parties; 6.-Acting in trade and in other transactions, including the introduction of the most innovative objectives in world technology, importation of machinery and equipment, and development of technological services; 7.-Carrying out the acts that a company requires, such as reports on local competition, executing contracts, evaluating the general condition of business in Mexico and outside the country; 8.-Carrying out all necessary advertising with respect to itself as well as its subsidiaries and affiliates in the entire Mexican Republic; 9.-Establishing, building, renting, operating, acquiring shops, warehouses, storage rooms and any other establishment necessary for the Company’s purposes; 10.-Acquiring, owning, leasing, buying, selling, disposing of and, generally, trading through legal operations with respect to its fixed assets, shares and other credit instruments in Mexico, as well as abroad; 11.-Acquiring, owning, leasing and disposing of all manner of personal and real property, in order to satisfy the Company’s corporate

objective, including the establishment of trusts, as well as any other type of operation permitted by the Law; 12.-Hiring employees, managers and executives, agents, customs agents, customs attorneys-in-fact, commission agents, professionals, representatives, intermediaries of all types and distributors necessary to fulfill the corporate purpose; 13.-Granting or receiving all manner of financing, with or without guarantees, establishing trusts, granting encumbrances, issuing and negotiating all manner of credit instruments, including granting its own guarantees and endorsements to third parties; 14.-Establishing administrative offices, agencies and branches in Mexico and abroad; 15.-Obtaining, acquiring, conveying, through franchises or concessions, and owning all manner of patents and marks and other industrial and intellectual property rights, copyrights, invention certificates and trademarks in Mexico and abroad; 16.-Receiving and granting all manner of powers of attorney, delegating them to its employees and executives, as well as modifying and/or revoking them at any time; 17.-Representing or being an agent of all manner of domestic or foreign business or industrial companies and getting involved in the sale and commercialization of their products and services; 18.-Generally, carrying out and executing all manner of legal acts and civil, commercial, administrative and any other agreements related to the corporate purpose.

ARTICLE FIVE. DURATION. The Company’s duration will be 99 (ninety-nine) years, which will be automatically extended for another 99 (ninety-nine) years unless, before the first term ends, the special shareholders’ meeting decides that the Company be dissolved.

ARTICLE SIX. NATIONALITY. The company is of Mexican Nationality, the founding partners agreeing and it being established, for future partners that the Company may have, that “Any foreigner who, at the event of organization or any other subsequent time acquires an interest or share in the Company will be considered, for that mere fact, as Mexican with respect to one and the other, as well as the property, rights, concessions, holdings or interests that the Company owns or else with respect to the rights and obligations arising out of contracts executed with Mexican authorities, and it shall be understood that he agrees not to invoke the protection of his government, under the penalty, if he breaches the agreement, of losing such interests, rights or shares, to the benefit of the Mexican Nation.”

CHAPTER TWO

CAPITAL STOCK AND SHARES

ARTICLE SEVEN. CAPITAL. The capital stock is made up of a fixed portion and another variable portion. The minimum fixed capital is $50,000.00 (Fifty Thousand and 00/100 Pesos, National Currency), represented by 50,000 (Fifty Thousand) common, registered shares with a par value of $1.00 (One and 00/100 Peso, National Currency) each, fully subscribed to and paid up.

The variable capital will be unlimited and will be represented by the shares determined by the shareholders’ meeting that approves their issue. The Series “A” shares will be for Mexican partners, and the Series “B” shares will be for foreign partners. Notwithstanding the above, the Series “A” and the Series “B” shares will grant equal rights to their holders. The shares representing the Company’s fixed capital will be designated as Series “A-1” or “B-1” shares, as applicable.

ARTICLE EIGHT. SHARE CERTIFICATES. The certificates representing the company’s shares must contain, in their text, the requirements set forth in article 125 (one hundred twenty-five) of the General Law of Commercial Companies, and they may cover one or more shares, and they will be signed by two members of the Board of Directors or by the Sole Director and CEO. In addition, the certificates will have the text of article six of these bylaws printed on it.

ARTICLE NINE. REGISTRATION OF SHARES. The Company will keep a share registration book containing the name, nationality and address of the shareholders, indicating the shares belonging to them, with all their details. In addition, the payments made by the shareholders and the conveyances of their certificates will be noted in such book.

ARTICLE TEN. INCREASES AND DECREASES IN CAPITAL. The capital stock may be increased or decreased through a resolution of the special shareholders’ meeting except in cases of increases or decreases in the variable part of the capital stock, which increases or decreases may be made through a resolution of the regular general shareholders’ meeting. In case of an increase in capital, the shareholders will have a preferred right to subscribe to the increase in proportion to the number of shares that they own, and they must exercise that right within a period of 15 (fifteen) working days following the date of written notification made in accordance with article 132 (one hundred thirty-two) of the General Law of Commercial Companies. However, if at the time of voting at the meeting, all the capital stock is represented, such period of 15 (fifteen) working days will begin running from the date of the meeting, and the shareholders will be deemed notified of the respective decision at that time. Increases in the fixed and variable part of the capital stock will be represented through the issue of Series “A-1 or 2 or B-1 or 2” certificates, respectively, as appropriate for each increase in the variable capital, unless the shareholders’ meeting decides otherwise, depending only on if the person subscribing to the increase is Mexican or a foreigner.

CHAPTER THREE

MANAGEMENT

ARTICLE ELEVEN. MANAGEMENT OF THE COMPANY. Management of the company will be the responsibility of the board of directors or of a sole director and CEO, as determined by the regular shareholders’ meeting. The Board will be made up of at least three members designated by the regular shareholders’ meeting. If the meeting deems it necessary, it may appoint alternate directors.

The Sole Director and CEO or directors who are owners or alternates may but need not be company shareholders, and they will continue holding their positions until the persons designated to replace them take over. The Directors or the Sole Director and CEO will receive the compensation determined by the regular shareholders’ meeting. The Sole Director and CEO or the directors may be removed at any time through a resolution of the regular shareholders’ meeting.

ARTICLE TWELVE. BOARD MEETINGS. The Board of Directors will hold its meetings at the registered office or, by a unanimous decision, any other place in the Mexican Republic or abroad. For the meetings to be legally held, the appearance of half the members of the board shall be required, and its resolutions will be valid when adopted by a majority of the directors who are present. In case of a tie, the chairman of the Board will have a vote in addition to his regular vote. Minutes will be drawn up for each meeting, and they will be signed by the chairman and the secretary and recorded in the book kept for that purpose. If the chairman does not attend the meeting, it will be chaired by the director that follows him in hierarchical order and, in his absence, by the director designated by a majority of votes of those who are present.

ARTICLE THIRTEEN. RESOLUTIONS OF THE BOARD OF DIRECTORS BY UNANIMOUS CONSENT. Any type of resolution requiring the involvement of the Board of Directors may be adopted without the need for the Board to meet, and it will be valid provided all the directors formalize, in writing and unanimously, the resolution adopted, in accordance with the stipulations of Article 143 of the General Law of Commercial Companies. Whenever there is a need to give notification in advance of a meeting of the directors, according to the terms of these bylaws or the General Law of Commercial Companies, it will be understood that the directors waive the need to be notified through a notice of meeting if they state it in writing, before or after formalizing their decision in writing, which would be equivalent to such directors being duly summoned to make decisions on behalf of the board of directors.

ARTICLE FOURTEEN. RIGHTS OF MINORITIES. Any shareholder or group of shareholders representing at least 25% (twenty-five percent) of the capital stock will have the right to designate at least one member of the Board of Directors. Each shareholder will have the right to one vote cast only once for each share belonging to him in each one of the designations of the members of the board. Such designations will be submitted to voting individually by each member of the Board. However, the first sentence of this article will always prevail.

ARTICLE FIFTEEN. POWERS OF THE DIRECTORS. The Sole Director and CEO and the Board of Directors, as applicable, will have all manner of powers of administration, for lawsuits and collections, even the special ones that, under the law, require a special clause according to the terms of articles 2554 (two thousand five hundred fifty-four) and 2587 (two thousand five hundred eighty-seven) of the Civil Code for the Federal District and related articles of the Civil Codes of the States of the Mexican Republic and, especially, the related provisions of the Civil Code of the State of Tamaulipas. They will have powers to issue and subscribe to credit instruments in accordance with articles 9 and 85 of the General Law of Credit Instruments and Operations, to file and answer complaints, to challenge judges, to compromise, to submit to arbitration, to make and receive payments, to execute agreements, to represent the company in all manner of civil, commercial or labor proceedings or procedures, to prepare and answer interrogatories, to file penal complaints or grievances and to ratify them, to assist the Office of the Government Attorney, to abandon complaints or grievances filed and to grant pardons, to carry out all manner of actions and steps before administrative authorities for matters of interest to the company, to file all manner of

appeals, including an appeal for relief under the Constitution and to abandon them. The Sole Director and CEO will not require any special authorization to make or implement his decisions.

Without detriment to the powers indicated above, the Sole Director and CEO or the board of directors, as applicable, may, without limitation:

a) Represent the company before all manner of judicial, administrative or labor authorities with the above-mentioned powers;

b) Carry out all pertinent actions and operations to fulfill the corporate purpose;

c) Decide on expenses that must be incurred with a charge to the Company’s budget;

d) Execute and sign all manner of public or private contracts, agreements or documents and issue credit instruments according to the terms of articles nine and eighty-five of the General Law of Credit Instruments and Operations, whether issuing, accepting, endorsing, or guaranteeing them or to collect their amount or assume obligations on behalf of the company, to take out loans and open bank accounts or accounts of another nature on behalf of or for the account of the company;

e) To name and remove the Directors, Managers, Executive, officials and employees of the company and to set their powers, obligations and compensation;

f) To grant, delegate and revoke general or special powers of attorney with the powers that they deem appropriate;

g) To call shareholder meetings, whether ordinary, special or extraordinary, and to implement the decisions thereof.

ARTICLE SIXTEEN. JOINT AND SEVERAL LIABILITY. Pursuant to article 158 (one hundred fifty-eight) of the General Law of Commercial Companies, the directors are jointly and severally liable to the company:

a) For the collection of contributions to be made by the shareholders;

b) For compliance with the requirements of the law and the bylaws established with respect to the dividends paid to the shareholders;

c) For the existence and keeping of accounting, control, recording, filing or information systems contemplated in the Law;

d) For exact compliance with the decisions made by the shareholder meetings.

ARTICLE SEVENTEEN. POWERS OF THE SOLE DIRECTOR AND CEO OR CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of the Board of Directors will be the legal representative of the Board itself and the executor of its resolutions, without the need for a special decision instructing him on the execution of such resolutions. For the mere fact of his appointment, the Sole Director and CEO or the chairman of the Board of Directors, as applicable, will have, with respect to the company, all manners of powers of administration and for lawsuits and collections, whether general or special, even those that, under the law, require a special clause according to the terms of the first two paragraphs of articles 2554 (two thousand five hundred fifty-four) and 2587 (two thousand five hundred eighty-seven) of the Civil Code for the Federal District and its related articles of the Civil Codes of the States of the Mexican Republic, including those necessary to subscribe to credit instruments according to the terms of Articles Nine and Eighty-five of the General Law of Credit Instruments and Operations, to grant general or special powers of attorney within their powers and to file appeals and actions for relief under the Constitution and, at the same time, to abandon judicial procedures, including a petition for relief under the Constitution.

ARTICLE EIGHTEEN. DIRECT MANAGEMENT. The direct management of the company will be the responsibility of one or more directors, managers or executives named by the Sole Director and CEO or Board of Directors, as applicable, or by the regular shareholders’ meeting, which directors, managers or executives may but need not be shareholders. They will have the powers and obligations that the Sole Director and CEO or Board of Directors or regular meeting indicates to them when appointing them and granting them the necessary powers of attorney. Such officials will hold their positions until their respective appointments are revoked.

ARTICLE NINETEEN. GUARANTEES. In accordance with the provisions of Articles 152 and 153 of the General Law of Commercial Companies, the Sole Director and CEO and members of the Board of Directors, Officers, Managers and Executives of the company will not be required to post a guarantee or bond to guarantee performance of their obligations unless the shareholders decide otherwise.

CHAPTER FOUR

OVERSIGHT

ARTICLE TWENTY. OVERSIGHT. Oversight of the company will be the responsibility of one or more shareholders’ auditors (comisarios) designated by the regular shareholders’ meeting. A minority representing 25% (twenty-five percent) of the capital stock will have the right to appoint a shareholders’ auditor in case there are 2 (two) or more of them. The provisions of Article Fourteen will also be applicable to such shareholders’ auditor.

ARTICLE TWENTY-ONE. SHAREHOLDERS’ AUDITORS. The shareholders’ auditors may not be company shareholders. They will hold their positions until they are removed by the regular shareholders’ meeting, and they may be reelected. They must continue to hold their positions until the persons designated to replace them take over.

ARTICLE TWENTY-TWO. IMPEDIMENTS TO BEING SHAREHOLDERS’ AUDITORS. The following persons may not be shareholders’ auditors:

a) Those who, under the law, are prevented from engaging in business;

b) Employees of the company, employees of companies that are shareholders of this company and hold more than 25% (twenty-five percent) of the capital stock or employees of those companies of which this company holds more than 50% (fifty percent) of the shares;

c) Persons related by blood to the directors in a straight line without a limitation of degree, collaterals by consanguinity within the fourth degree and relatives by marriage within the second-degree.

ARTICLE TWENTY-THREE. The following are powers and obligations of the shareholders’ auditors:

a) To ensure the establishment and continuation of the guarantee, if any, referred to in article nineteen of these bylaws;

b) To carry out a review of operations, documentation, records and other evidentiary proof to the degree and extent necessary to perform the oversight of operations imposed on them by the Law and to issue the opinion mentioned in the following subsection;

c) To submit to the regular general shareholders’ meeting, on an annual basis, a report on the truthfulness, sufficiency and reasonability of the documentation presented by the managers to the shareholders’ meeting itself. This report must include at least the following:

1.- The opinion of the shareholders’ auditor on whether the accounting and information policies and criteria followed by the company are proper and sufficient, taking into account the company’s specific circumstances;

2.- The opinion of the shareholders’ auditor with respect to the information presented by the directors as to the consistent application of previously established criteria;

3.- The opinion of the shareholders’ auditor on whether, as a consequence of the above, the information presented by the directors truthfully and sufficiently reflects the company’s financial situation and results;

d) All others mentioned in sections five, six, seven, eight and nine of article 166 (one hundred sixty-six) of the General Law of Commercial Companies.

ARTICLE TWENTY-FOUR. GUARANTEES. As stipulated in Articles 152 and 153 of the General Law of Commercial Companies, the shareholders’ auditors are not required to post any guarantee or deposit guaranteeing performance of their obligations unless the shareholders decide otherwise.

CHAPTER FIVE

SHAREHOLDERS’ MEETINGS

ARTICLE TWENTY-FIVE. GENERAL SHAREHOLDER MEETINGS. The general meeting of shareholders, legally called to order, is the supreme body of the Company, and its decisions bind even those who are absent and dissenting, except for the right of opposition referred to in article 201 (two hundred one) of the General Law of Commercial Companies.

ARTICLE TWENTY-SIX. TYPES OF MEETINGS. The general shareholder meetings will be regular and special. All of them will be regular except for those that are held to discuss any of the matters included in article 182 (one hundred eighty-two) of the General Law of Commercial Companies, which meetings will be special. Shareholder meetings discussing an increase or decrease in the Company’s variable capital will also be regular.

ARTICLE TWENTY-SEVEN. ANNUAL MEETING. A regular meeting will be held at least once a year within four months following the end of the fiscal year, and, in addition to the matters included on the agenda, it will take up the following:

a) Discussion, approval or modification of the managers’ report referred to in Article Thirty-Seven of these bylaws, taking into account the report of the shareholders’ auditors, in addition to adopting the measures that the shareholders deemed appropriate;

b) Naming and/or removing the Sole Director and CEO or the members of the Board of Directors and the shareholders’ auditors

c) Determining the emoluments for the managers and shareholders’ auditors.

ARTICLE TWENTY-EIGHT. NOTICE OF MEETING. The notice for the general shareholder meetings must be issued by the Sole Director and CEO or the Board of Directors or by the shareholders’ meetings. However, shareholders representing at least 33% (thirty-three percent) of the capital stock may at any time ask the Sole Director and CEO or the Board of Directors or the shareholders’ auditor to call a general or special

general shareholders’ meeting to discuss the matters indicated in their request. If the Sole Director and CEO or the Board of Directors or the shareholders’ auditors do not issue a notice of meeting within 15 (fifteen) days following the date of the request, it will be done by a Civil or District Judge in the jurisdiction of the Company’s main place of business, at the request of concerned parties representing at least 33% (thirty-three percent) of the capital stock, which concerned parties must evidence their status of shareholders for that purpose.

The notices of meetings must be issued through a publication in the official newspaper or in one of the newspapers with the highest circulation in the company’s main place of business, at least 8 (eight) days before the date of the meeting.

ARTICLE TWENTY-NINE. FULL MEETINGS (ASAMBLEAS TOTALITARIAS). They may be held without the requirement of publishing the notice of meeting, and the resolutions that are adopted will be valid in the following cases:

a).-When, from the beginning until the end of the meeting, the entire capital stock is represented, and;

b).-When a meeting is held as a continuation of another previous one, and, the date and time to continue it have been indicated in it, provided no matters other than those indicated in the first notice of meeting are taken up.

ARTICLE THIRTY. REPRESENTATION. The shareholders will have the right to be represented at the meeting by the person(s) that they designate, through a simple proxy signed by the concerned party and two witnesses. Shareholders may not be represented by any of the managers or shareholders’ auditors (comisarios).

ARTICLE THIRTY-ONE. MINUTES OF MEETINGS. The minutes of the meetings will be recorded in the respective book and will be signed by the Chairman and Secretary of the meeting, as well as by the shareholders’ auditors who attend.

ARTICLE THIRTY-TWO. CHAIRMAN AND SECRETARY OF THE MEETINGS. The meetings will be chaired by the Sole Director and CEO (Administrador Unico) or by the chairman of the Board of Directors or, as applicable, by the person elected by the majority of votes of those present. The secretary and teller of the meeting will be designated by the majority of the shareholders who are present or by the chairman.

ARTICLE THIRTY THREE. QUORUM AND RESOLUTIONS ADOPTED BY REGULAR MEETINGS. In order for a regular shareholders’ meeting held by virtue of the first notice to be valid, it will be necessary for at least 50% (fifty percent) of the capital stock to be represented thereat, and the resolutions will be valid when adopted by the favorable vote of the majority of the shares represented at the meeting.

ARTICLE THIRTY-FOUR. QUORUM AND RESOLUTIONS ADOPTED BY SPECIAL MEETINGS. In order for the special meetings held under the first notice to be valid, at least 75% (seventy-five percent) of the capital stock must be represented and their resolutions must be adopted with a favorable vote of shares representing at least 51% (fifty-one percent) of the capital stock.

ARTICLE THIRTY-FIVE. SECOND NOTICE OF MEETING. If the regular meeting cannot be held on the date indicated in the first notice of meeting, a second notice of meeting will be issued. However, the resolutions of meetings held as a result of a second notice of meeting will be valid if they are adopted in compliance with at least the quorums and voting described in the above two articles, depending on the type of meeting.

ARTICLE THIRTY-SIX. RESOLUTIONS OF THE GENERAL SHAREHOLDERS’ MEETING BY UNANIMOUS CONSENT. Any type of resolution that is necessary or that has to be adopted at general shareholders’ meetings, whether regular or special, may be adopted without the need for a notice of meeting, and they will be valid, provided all the shareholders formalize in writing and unanimously the resolution that has been adopted. Such resolution must be signed by the shareholders with a right to vote on said matter in accordance with the stipulations of Article 178 of the General Law of Commercial Companies.

CHAPTER SIX

FINANCIAL INFORMATION

ARTICLE THIRTY-SEVEN. ANNUAL REPORT. Through and under the responsibility of its directors, the company will submit a report annually to the shareholders’ meeting that will include at least:

a) Information on the Company’s progress during the fiscal year, as well as on the policies followed by the directors, and, as applicable, on the main existing projects;

b) Information on the main accounting and information policies and criteria followed in preparing the financial statements;

c) A statement showing the Company’s financial situation at the date of close of the fiscal year;

d) A statement, duly explained and classified, showing the company’s financial statements during the fiscal year;

e) A statement showing the financial situation during the fiscal year;

f) A statement showing changes in the items that make up the corporate net worth; and

g) The necessary notes to complement or clarify the information furnished in the above statements.

The report by the shareholders’ auditors referred to in section c) of Article Twenty-Three of these bylaws will be added to the above information. The information referred to in this article, including the report by the shareholders’ auditors, must be completed and made available to the shareholders at least 15 (fifteen) days before the meeting called to discuss it. Shareholders having a right to vote at such meeting will have the right to receive a copy of the pertinent reports.

CHAPTER SEVEN

PROFITS AND LOSSES

ARTICLE THIRTY-EIGHT. PROFITS. Profits resulting from the financial statements will be distributed as follows, after compliance with the workers’ right to share in the profits and after paying the pertinent income tax:

a) First:-A minimum of 5% (five percent) of the profits will be set aside to establish and replenish the legal reserve fund until it reaches 20% (twenty percent) of the capital stock.

b) Second:-The amounts determined by the shareholders’ meeting will be set aside to establish special reserve funds, social welfare funds and reinvestment funds.

c) Third:-After the shareholders’ meeting approves the balance sheet prepared for

the close of the fiscal year, the meeting will determine the application of any remainder, which will include capitalization or distribution among the partners based on their shareholdings or it will be kept in the Treasury.

ARTICLE THIRTY-NINE. LOSSES. Losses, if any, will be absorbed by existing reserves.

ARTICLE FORTY. AMORTIZATION OF LOSSES. No profits may be distributed until the losses incurred in one or more previous fiscal years are restored or absorbed through application of other shareholders equity items or the capital stock has been reduced.

ARTICLE FORTY-ONE. FOUNDERS. The founding shareholders have no special interest reserved in the company, and they will have the same rights as any other shareholder with the same class or series of shares.

CHAPTER EIGHT

LIQUIDATION OF THE COMPANY

ARTICLE FORTY-TWO. DISSOLUTION AND LIQUIDATION. The company will be dissolved in any of the cases established in article 229 (two hundred twenty-nine) of the General Law of Commercial Companies.

ARTICLE FORTY-THREE. LIQUIDATORS. Once the company is dissolved, it will be placed in liquidation, which will be the responsibility of one or more liquidators named by the special shareholders’ meeting. If the meeting does not designate liquidators, this will be done by a Civil or District Judge in the jurisdiction of the company’s main place of business at the request of any shareholder.

ARTICLE FORTY-FOUR. LIQUIDATION RULES. Except for the express instructions of the shareholders’ meeting that decrees the company’s dissolution, the liquidation will be carried out according to the following general bases:

a) Conclusion of any business in the manner least harmful to the creditors and shareholders;

b) Preparation of the balance sheet and general inventories;

c) Collection of credits and payment of debts;

d) Disposal of the company’s assets and application of the proceeds, firstly, to pay the creditors and then in benefit of the partners in proportion to the amount of their shareholdings in the company.

TRANSITORY ARTICLES

ARTICLE ONE. FISCAL YEARS. The fiscal years will run from the first of January until the 31^st (thirty-first) of December of each year. However, the first fiscal year will be irregular and will run from the date of execution of this deed until the 31^st (thirty-first) of December 1997 (nineteen ninety-seven).

ARTICLE TWO. CAPITAL STOCK. The fixed minimum capital stock of $50,000.00 (FIFTY THOUSAND AND 00/100 PESOS, NATIONAL CURRENCY) has been totally subscribed to and paid up as follows:

BOMBARDIER INC. subscribes to and pays for 49,999 Series “B-1” shares with a par value of $1.00, National Currency (Peso), each	$	49,999.00
BOMBARDIER MOTOR CORPORATION OF AMERICA subscribes to and pays for 1 Series “B-1” share with a par value of $1.00, National Currency (Peso), each	$	1.00
	$	50,000.00

ARTICLE THREE. MANAGEMENT. Until such time as the regular shareholders’ meeting decides otherwise, the company will be managed by the Board of Directors. The following persons are appointed to make up the first Board of Directors of the company until such time as they are replaced in accordance with the bylaws.

CHAIRMAN/DIRECTOR:	PIERRE BEAUDOIN
SECRETARY/DIRECTOR:	ARTURO D. TORRES
TREASURER/DIRECTOR:	JACQUES SAVARD
DIRECTOR:	JOSE BOISJOLI

The following persons are appointed officers until they are replaced as contemplated in these bylaws:

PRESIDENT:	PIERRE BEAUDOIN
VICE PRESIDENT:	JOSE BOISJOLI
TREASURER:	JACQUES SAVARD
ALTERNATE TREASURER:	CHARLES SMITH
SECRETARY:	ARTURO TORRES
ALTERNATE SECRETARY:	DENIS R. CLOUTIER
ALTERNATE SECRETARY:	LUC DE GASPE BEAUBIEN

Mr. FAUSTO SANDOVAL AMAYA will be appointed the Company’s Shareholders’ Auditor.

It is noted for the record that both the Directors as well as the officers and the Shareholders’ Auditor that have been appointed have accepted the positions granted to them and are excused from guaranteeing performance of their positions in accordance with the bylaws.

ARTICLE FOUR. POWERS OF ATTORNEY. The following powers of attorney of BOMBARDIER (MEXICO) S.A. DE C.V. are granted:

A).- A GENERAL POWER OF ATTORNEY FOR LAWSUITS AND COLLECTIONS, in favor of Messrs. ARTURO D. TORRES, HÉCTOR CORONADO DE ANDA, JORGE MILLAN SALAS, MARIO PERERA RIVEROLL, JORGE A. GARCÍA ADAME, PIERRE BEAUDOIN, JOSE BOISJOLI, JACQUES SAVARD, CHARLES SMITH, DENIS R. CLOUTIER and LUC DE GASPE BEAUBIEN to be exercised by any of them together with any other of them. This same power of attorney is granted to Mr. VICTOR FORTIN, who may exercise it individually with all the general and special powers requiring a special clause for lawsuits and collections in accordance with the law, according to the terms of the first paragraph of Article 2554 of the Civil Code for the Federal District for common matters and of federal application for the entire Republic, as well as its related articles in the rest of the Civil Codes of the States of the Mexican Republic, especially the first paragraph of article 1890 of the Civil Code for the State of Tamaulipas, so that they will exercise it and appear before all manner of persons, judicial, administrative, civil, penal and labor authorities, federal and local, especially to file and abandon actions, compromise, commit to arbitration, prepare and answer interrogatories, challenge, accept assignments of property, receive payments and grant receipts and cancellations, file civil, commercial and penal actions in representation of the principal, as well as file and answer complaints and follow up on procedures until their full completion, file actions for relief under the Constitution on behalf of the principal and abandon them; challenge judges, represent the company in all manner of civil, commercial or labor proceedings and procedures, prepare and answer interrogatories, file penal complaints or grievances and ratify them, work together with the Office of the Government Attorney, abandon complaints or grievances, file and grant pardons, when necessary, present evidence in penal proceedings in accordance with the stipulations of Article 9 of the Code of Penal Procedures of the Federal District and related articles in the Codes of the States of the Republic and the provisions of the Federal Code of Penal Procedures.

B) SPECIAL LABOR POWER OF ATTORNEY, in favor of Messrs. ARTURO D. TORRES, HÉCTOR CORONADO DE ANDA, JORGE MILLAN SALAS, MARIO PERERA RIVEROLL, JORGE A. GARCÍA ADAME, PIERRE BEAUDOIN, JOSE BOISJOLI, JACQUES SAVARD, CHARLES SMITH, DENIS R. CLOUTIER and LUC DE GASPE BEAUBIEN to be exercised by any of them together with any other of them.

This same power of attorney is granted to Mr. VICTOR FORTIN, who may exercise it individually, with the powers of employer representation in accordance with and for purposes of articles 11, 46, 47, 134, section III, 523, 692, sections II and III, 694, 695, 786, 787, 873, 874, 876, 878, 880, 883, 884 and 899, related to what is applicable with the rules of Chapters XII and XVII of Title Fourteen, all of them of the current Federal Labor Law; the power of attorney that is granted and the employer representation that is conferred will be exercised according to the following powers that are listed by way of example and not limitation, and they may act before or toward the union(s) with which collective bargaining agreements have been executed; before or toward workers personally considered and, generally, for all employee-management matters and to act before any of the Labor and Social Service authorities referred to in Article 523 of the Federal Labor Law. They may also appear before the Settlement Boards and the Settlement and Arbitration Boards, whether local or federal. Consequently, they will be employer representatives for purposes of articles 11, 46 and 47 of the Federal Labor Law and also the company’s legal representatives for purposes of evidencing the legal status and capacity in proceedings or outside of them according to the terms of articles 692, sections II and III. They may appear at presentations of the oral testimony of parties according to the terms of articles 787 and 788 of the Federal Labor Law, with powers to prepare and answer interrogatories and produce evidence in all its parts. They may indicate a contractual address to hear and receive notifications according to the terms of article 876 of the Federal Labor Law. They may appear in the capacity of employer, with all legal responsibility, adequate and sufficient, at the hearings referred to in article 873 of the Federal Labor Law in its three phases: settlement, complaint and defense; offering and admission of evidence, according to the terms of articles 875, 876, sections I and IV, 877, 878, 879 and 880 of the Federal Labor Law. They may also appear at hearings to produce evidence according to the terms of articles 883 and 884 of the Federal Labor Law. They may reach settlements, execute transactions, make all manner of decisions, and negotiate and sign labor agreements. In addition, they may execute individual and collective agreements and terminate or rescind them.

C). A GENERAL POWER OF ATTORNEY FOR ACTS OF ADMINISTRATION in favor of Messrs. PIERRE BEAUDOIN, JOSE BOISJOLI, JACQUES SAVARD, CHARLES SMITH, DENIS R. CLOUTIER and LUC DE GASPE BEAUBIEN, to be exercised by any of them together with any other of them. This same power of attorney is granted to Mr. VICTOR FORTIN, who may exercise it individually with all manner of powers for acts of administration and special powers of attorney that, in accordance with the law, require a special clause according to the terms of the second paragraph of

article 2554 of the Civil Code for the Federal District, of common application and of federal application for the entire Republic, as well as its related articles of the Civil Codes of all the States of the Mexican Republic, especially article 1890, second paragraph of the Civil Code for the State of Tamaulipas, with all necessary powers to execute and sign all manner of public and private instruments, whether commercial, administrative, and any other form of statements and waivers, in accordance with the law, sign and execute all manner of tax statements, including those of Social Security and before the authorities of the National Institute for the Development of Workers Housing (Instituto Nacional para el Fomento de la Vivienda de los Trabajadores – INFONAVIT), the Retirement Savings System (Sistema de Ahorro para el Retiro – SAR) and those for federal and state taxes, or any other type, including payroll taxes for the workers in the State of Tamaulipas. The powers of attorney will include those that are necessary to make any type of request, consultation and petition before any authority of any kind, whether federal, state and/or municipal, including requests for reimbursement of the value-added tax. In addition, they will have the powers to apply for import permits, as well as their extensions, additional imports and applications of any type, including permits from the Customs authorities of the Secretariat of Finance and Public Credit.

D) A SPECIAL POWER OF ATTORNEY FOR ACTS OF ADMINISTRATION in favor of Messrs. ARTURO D. TORRES, HÉCTOR CORONADO DE ANDA, JORGE MILLAN SALAS, MARIO PERERA RIVEROLL, and JORGE A. GARCÍA ADAME, to be exercised jointly, separately, and by any of them in any number, according to the terms of the fourth paragraph of Article 2554 of the Civil Code for the Federal District, of common application and of federal application for the entire Republic, as well as its related articles of the Civil Codes of all the States of the Mexican Republic, especially article 1890, second paragraph of the Civil Code for the State of Tamaulipas, with all necessary powers to execute and sign all manner of public and private instruments, whether commercial, administrative, and any other form of statements and waivers, in accordance with the law, sign and execute all manner of tax statements, including those of Social Security and before the authorities of the National Institute for the Development of Workers Housing (INFONAVIT), the Retirement Savings System (SAR) and those for federal and state taxes, or any other type, including payroll taxes. The powers of attorney will include those that are necessary to make any type of request, consultation and petition before any authority of any kind, whether federal, state and/or municipal, including requests for reimbursement of the value-added tax. In addition, they will have the powers to apply for import permits, as well as their extensions, additional imports

and applications of any type, including permits, records and any other procedure from the Customs authorities of the Secretariat of Commerce and Industrial Development and its various agencies and representative offices.

E). – A GENERAL EXCHANGE POWER OF ATTORNEY in favor of Mr. VICTOR FORTÍN, as the company’s representative, who may execute, endorse, sign, guarantee and, generally, negotiate credit instruments according to the terms of Articles 9 and 85 of the General Law of Credit Instruments and Operations and carry out, on the Company’s behalf, all manner of bank measures and operations, make deposits, withdraw cash and make endorsements. However, he may only incur debt on the Company’s behalf once the signature and consent of any of the following persons has been obtained: PIERRE BEAUDOIN, JOSE BOISJOLI, JACQUES SAVARD, CHARLES SMITH, DENIS R. CLOUTIER and LUC DE GASPE BEAUBIEN.

LEGAL STATUS

Licenciado JORGE A. GARCÍA ADAME evidences the legal status with which he appears at the organization of this company with the special power of attorney granted in his favor by his principal BOMBARDIER, INC., represented by Messrs. PAUL H. LAROSE, in his capacity of Vice President of Finance, and ROGER CARLE, in his capacity of General Counsel and Corporate Secondary on the 11^th eleventh of August of 1997 nineteen ninety-seven, which was ratified before Notary Public BERNARD LABERGE, Notary Public for the City of Montreal, Province of Quebec, Canada. In addition, the Notary’s signature was certified by MICHEL POULIN, Secretary of the Chamber of Notaries of Quebec, Canada, noting that BERNARD LABERGE is a practicing notary and public official, duly commissioned and sworn in as such and he is registered on the List of the Order of Notaries of the Province of Quebec and his appointment to such position is for life; the signature of said notary being legalized by Licenciado CELSO H. DELGADO RAMIREZ, Consul General of Mexico in Montreal, Quebec, Canada, on the 13^th thirteenth of August of 1997 nineteen ninety-seven, which legalization was recorded under No. 207736 two zero seven seven three six of the Consulate in question. From the document in question, I transcribe the pertinent parts..... We expressly authorize and empower the attorneys-in-fact so that they will exercise the special power of attorney in the manner and under the terms that they deem convenient in order to subscribe to and pay for 49,999

(Forty-nine Thousand Nine Hundred Ninety-nine) Series “B-1” shares of the Company’s initial capital stock and so that they will vote such shares in order to appoint a Board of Directors, Officers and shareholders’ auditors according to our instructions and, generally, so that they will carry out whatever is necessary for the Company to be organized Which document, after comparing and examining it, I attach to the appendix of this Instrument marked with the letter “C”.

Licenciado MARIO PERERA RIVEROLL evidences the legal status with which he appears at the organization of this company with the special power of attorney granted in his favor by his principal, BOMBARDIER MOTOR CORPORATION OF AMERICA, represented by Mr. HENRY LONSKI, in his capacity of Vice President, dated the 5^th fifth of August of 1997 nineteen ninety-seven, which was certified before Notary Public CATHERINE SEILER, Notary Public for the City of Melbourne, Brevard County, State of Florida, United States of America, who notes for the record that BOMBARDIER MOTOR CORPORATION OF AMERICA was organized and exists under the laws of the State of Delaware and has its registered office in the City of Benton, State of Illinois, United States of America. The Notary Public’s signature was certified by the Secretary of State for the State of Florida, noting therein the appointment of CATHERINE SEILER as Notary Public for the State of Florida, the apostille of the certification which is added in the document in question, the pertinent parts of the power of attorney being transcribed I expressly authorize and empower the attorneys-in-fact so that they will exercise the special power of attorney in the manner and terms that they deem convenient in order to subscribe to and pay for 1 (One) Series “B-1” Share of the Company’s initial capital stock and so that they will vote such share in order to appoint the Board of Directors, Officers and shareholders’ auditors in accordance with our instructions and, generally, so that they will carry out whatever is necessary for the Company to be organized..... Which document, after comparing it reviewing it, I attach to the appendix of this Instrument marked with the letter “D.”

CHAPTER OF PERSONAL PARTICULARS

Licenciado JORGE A. GARCÍA ADAME, Mexican, of legal age, unmarried, practicing his profession, originally from Reynosa, Tamaulipas, with address at NationsBank Plaza, 300 Convent Street, of the City of San Antonio, State of Texas, United States of America, and passing through this City.

Licenciado MARIO PERERA RIVEROLL, Mexican, of legal age, married, practicing his profession, originally from Mexico City, Federal District, with address at 200 two hundred South Street in the city of McAllen, State of Texas, United States of America, Zip Code 78501, and passing through this City.

I, THE NOTARY, CERTIFY AND ATTEST

a) That I know personally the parties appearing before me and consider them to be legally qualified to execute this instrument;

b) That what has been transcribed and inserted above agrees with the wishes of the parties appearing before me and their originals, to which I defer and which I saw;

c) That the power of attorney granted to Licenciado JORGE A. GARCÍA ADAME to appear before the undersigned to organize this company was legalized by the Consulate of the country where it was executed;

d) That the power of attorney granted to Licenciado MARIO PERERA RIVEROLL is not legalized by the Consulate of the country in which it was executed, which obligation is not currently required in the country where they were executed, which obligation is currently not required in the contracting country, according to the ninth session of The Hague Conference on Private International Law, in which convention the requirement for legalization of foreign public documents was eliminated and the instrument of adhesion of which was deposited with the Government of the Kingdom of the Netherlands on the 1^st first of the month of December of 1994 nineteen ninety-four, the publication of which appears in the Official Journal of the 14^th fourteenth of August of 1995 nineteen ninety-five and called the Decree of Promulgation of the Convention, eliminating the Requirement of Legalization of Foreign Public Documents.

e) That I advised the parties appearing before me of the legal obligation that they have to request its recording with the Federal Taxpayer Registry of the main place of business of the Company in effect at the execution of this deed. If they fail to record, I will report such omission to the Secretariat of Finance and Public Credit in order to comply with the stipulations of Article 27 of the current Tax Code of the Federation.

f) That I read this deed to the parties appearing before me. They stated their agreement with it, they ratified it and they signed as evidence of agreement and for the record in my presence, at 12:30 twelve thirty p.m. on the 9^th ninth of September of 1997 nineteen ninety-seven.-BEFORE ME.

Licenciado JORGE A. GARCÍA ADAME.- Initial.- Licenciado MARIO PERERA RIVEROLL.- Initial.- Licenciado ALFONSO SALINAS FLORES, authorizing signature and seal.

AUTHORIZATION

On the 9^th ninth of September of 1997 nineteen ninety-seven at 12:45 twelve forty-five minutes p.m., I authorized the above minutes because the requirements of the Law in acts of this nature had been fulfilled and because it is duly signed and sealed. I SO ATTEST.- Licenciado ALFONSO SALINAS FLORES, NOTARY PUBLIC NO. 135 ONE HUNDRED THIRTY-FIVE. Authorizing signature and seal.

ARTICLE 1890 OF THE CIVIL CODE IN EFFECT IN THE STATE OF TAMAULIPAS

In all general powers of attorney for lawsuits and collections, it will be sufficient for it to be said that they are granted with all general powers and the special ones that require a special clause under the Law for them to be understood to have been granted with no limitation whatsoever.-In general powers of attorney to manage property, it will be sufficient to state that they are granted with that capacity for the attorney-in-fact to have all manner of administrative powers.-In general powers of attorney to exercise acts of ownership, it will be sufficient for it to be said that such general powers of attorney are granted with that capacity for that the attorney-in-fact to have all the powers of owner, both with respect to the property, as well as to take all manner of steps to defend or manage it.-When, in the three cases mentioned above, it is wished to limit the powers of the attorney-in-fact, the limitations will be specified or special powers of attorney will be granted on the matter.-Notaries will insert this Article in the certified copies of powers of attorney executed before them. They shall also do so at the bottom of the Power of attorney and before the signatures of ratification, if the concerned parties have not inserted it in the text of the document, then the officials before which the parties executing the power of attorney and the witnesses ratified their signatures, in accordance with Section II of Article 1887 in connection with 1891, will do so.

DOCUMENTS OF THE APPENDIXES

A) Attached to the appendix of this instrument is permit No. 09020633 zero nine zero two zero six three three, file No. 9709020161 nine seven zero nine zero two zero one six one, with page No. 20739 two zero seven three nine, issued by the General Legal Affairs Office of the Secretariat of Foreign Relations. A copy is attached to the First Certified Copy of this instrument that is issued.

B) Attached to the appendix of this Instrument is receipt No. 1508347 one five zero eight three four seven issued by the Secretariat of Finance and Public Credit, and a copy is attached to the First Certified Copy of this instrument that is issued.

C) Attached to the appendix of this instrument is the Special Power of Attorney granted by BOMBARDIER, INC., represented by Messrs. PAUL H. LAROSE and ROGER CARLE, in their capacity of Vice President of Finance and General Counsel and Corporate Secretary of the Company, respectfully, in favor of Licenciado JORGE A. GARCÍA ADAME, in order to subscribe to and pay for 49,999 (Forty-nine Thousand Nine Hundred Ninety-nine) Series “B-1” shares of the company’s initial capital stock.

D) Attached to the appendix of this instrument is a Special Power of Attorney granted by BOMBARDIER MOTOR CORPORATION OF AMERICA, represented by Mr. HENRY LONSKI, in his capacity of VICE PRESIDENT, in favor of Licenciado MARIO PERERA RIVEROLL, in order to subscribe to and pay for 1 (One) Series “B-1” share of the Company’s initial capital stock.

THIS IS THE FIRST CERTIFIED COPY THAT AGREES FAITHFULLY AND EXACTLY WITH THE ORIGINAL MINUTES THAT ARE IN VOLUME SEVEN HUNDRED EIGHT OF THE NOTARY RECORD BOOKS OF PUBLIC INSTRUMENTS OF THE NOTARY OFFICE FOR WHICH I AM RESPONSIBLE. IT IS ISSUED AT THE REQUEST OF LICENCIADO JORGE A. GARCÍA ADAME, IN HIS CAPACITY OF ATTORNEY-IN-FACT OF THE PRESENT COMPANY CALLED BOMBARDIER (MEXICO), S.A. DE C.V., IN ELEVEN PAGES OF TEXT, DULY STAMPED AND COMPARED, ON THE NINTH DAY OF THE MONTH OF SEPTEMBER OF NINETEEN NINETY-SEVEN IN THE CITY OF REYNOSA, STATE OF TAMAULIPAS, UNITED MEXICAN STATES.

[Signature]

LIC. ALFONSO SALINAS FLORES

NOTARY PUBLIC NO. 135.

[stamp]

UNITED MEXICAN STATES

ALFONSO SALINAS FLORES

NOTARY PUBLIC NO. 135

REYNOSA, TAMAULIPAS

Recorded under No. 656 of Volume VI of Auxiliary Book 1 of Companies, Powers of Attorneys and Miscellaneous Contracts, on the front of Page 228, Commerce Section, Cd. Reynosa, Tam., September 10, 1997

I SO ATTEST

THE REGISTRAR

[SIGNATURE]

[ILLEGIBLE SEAL]

I, the undersigned, Licenciado Enrique Fco. Sepulveda Gonzalez, Notary Public No. 60, practicing in this City of Reynosa, Tamaulipas, note for the record and certify: that this document, consisting of twelve pages of text, is a photostatic copy that agrees faithfully and exactly with its original, which I saw and which contains: Public Deed No. 1,984, Volume 79, dated September 9, 1997, executed before Licenciado Alfonso Salinas Flores, Notary Public Number 135, practicing in this City, in which is evidenced the Deed of Incorporation of the Commercial Company called “Bombardier (Mexico), S.A. de C.V.”.- This certification was recorded in the Book of Control of Acts of Certifications and Verifications with number 17,724, at 12:00 p.m. on the 15^th of the month of May of 2004 - two thousand four.-Note for the record.-I so attest.

[STAMP] UNITED MEXICAN STATES Lic. Enrique Fco. Sepulveda Gonzalez Notary Public No. 60 CD. REYNOSA, TAM. [SIGNATURE] Lic. Enrique Fco. Sepulveda Gonzalez Notary Public No. 60

[Seal]

Secretariat of Foreign Relations

Mexico

PERMIT 09020633

FILE 9709020161

PAGE 20739

Pursuant to the application filed by Mr. JORGE MILLAN SALAS, this Secretary grants permission to organize an Open-end Corporation (SA DE CV) under the name BOMBARDIER (MEXICO), SA DE CV.

This permit will be subject to insertion, in the Deed of Incorporation, of the foreigner exclusion clause contemplated in Article 30 or the agreement indicated in Article 31, both of the Regulations of the Law to Promote Mexican Investment and Regulate Foreign Investment.

The Notary Public or Commercial Notary before which this permit is used must notify the Secretariat of Foreign Relations within 90 working days after the date of authorization of the pertinent Public Deed.

The above is notified pursuant to articles 27, Section I, of the Political Constitution of the United Mexican States, 15 of the Law of Foreign Investment and according to the terms of Article 28, section V, of the Organizational Law of the Federal Public Administration.

This permit will be without effect if is not used within 90 working days following the date of its issuance, and it is granted without precluding the provisions of article 91 of the Law of Industrial Property.

TLATELOLCO, FEDERAL DISTRICT, June 4, 1997

[Stamp]

UNITED MEXICAN STATES

[Stamp]

SECRETARY OF FOREIGN RELATIONS

GENERAL LEGAL AFFAIRS OFFICE

[STAMP]

PERMITS OFFICE

CONSTITUTIONAL ARTICLE 27

[SIGNATURE]

LIC. CRISTINA ALCALA ROSETE

TRUE SUFFRAGE. NOT REELECTION

PA-1

86425

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LIC. JORGE A. GARCÍA CORCUERA

NOTARY PUBLIC NO. 140

AV. TIBURCIO GARZA ZAMORA NO. 945

COL. FERNANDEZ GOMEZ, CD. REYNOSA, TAM.

MEXICO, C.P. 88500

TELEPHONE: (89) 22-53-02 FAX: (89) 22-47-02

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LIC. JORGE A. GARCÍA CORCUERA

NOTARY PUBLIC NO. 140

Cd. Reynosa, Tam

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COMPARED

[two illegible signatures]

VOLUME FOUR HUNDRED SEVENTY-EIGHT.

INSTRUMENT NO. THIRTEEN THOUSAND EIGHT HUNDRED THIRTY-SIX.

PAGE NO. FIFTEEN

In the city of Reynosa, State of Tamaulipas, United Mexican States at 09:30 a.m. of the (6^th) sixth of the month of August of 2001 (two thousand one), before me, LICENCIADO JORGE A. GARCÍA CORCUERA, NOTARY PUBLIC NO. ONE HUNDRED FORTY, practicing in this City, there appears Licenciado Ruperto Zapata Roman, in his capacity of Special Delegate of the Special General Meeting of the Shareholders of Commercial Company BOMBARDIER (MEXICO), SOCIEDAD ANONIMA DE CAPITAL VARIABLE, held on July 24, 2001, who asks me to officially record the Minutes of the Meeting, in representation of which he appears, the Agenda of which is the following: 1. Amendment of the Corporate Bylaws with respect to the Company’s registered office; 2. Change of registered office for tax purposes; and 3. Designation of the Special Delegates of the Meeting. I, the Notary, attest to having seen in four (4) pages of text the Minutes of the Meeting, the official recording of which is requested of me and which are fully transcribed as follows:

SPECIAL GENERAL MEETING

OF THE SHAREHOLDERS OF

BOMBARDIER (MEXICO), S.A. DE C.V.

In this City of Reynosa, Tamaulipas, Mexico, at 8:00 a.m. on July 24, 2001, at the registered office of the Company BOMBARDIER (MEXICO), S.A. DE C.V., Messrs. LUIS A. UNIKEL FERNANDEZ, representing BOMBARDIER MOTOR CORPORATION OF AMERICA, and MARIO PERERA RIVEROLL, representing BOMBARDIER MOTOR CORPORATION OF AMERICA, met in the capacity of shareholder representatives in order to hold a special general shareholders meeting, to which they had been duly summoned.

By a unanimous vote of the attendees, Mr. LUIS A. UNIKEL FERNANDEZ was named chairman of the meeting and Mr. MARIO PERERA RIVEROLL served as secretary.

The chairman of the meeting appointed Mr. MARIO PERERA RIVEROLL as teller, and, after accepting the position and examining the pertinent documentation, the latter certified that all the shares representing the capital stock of the company BOMBARDIER (MEXICO), S.A. DE C.V. were represented at the meeting according to the following distribution:

SHAREHOLDERS	SERIES B-1 SHARES	VOTES
BOMBARDIER INC.	49,999	49,999
BOMBARDIER MOTOR CORPORATION OF AMERICA	1	1
TOTAL	50,000	50,000

Since all the shares of the subscribed capital stock of BOMBARDIER (MEXICO) S.A. DE C.V. were fully represented at the meeting, the chairman legally called it to order, in accordance with the Corporate Bylaws and Article 188 of the General Law of Business Companies even though its notice of meeting had not been published.

The shareholder representatives approved the statement by the chairman of the meeting and they proceeded to discuss the points contained in the following agenda, which was approved unanimously:

AGENDA

1.-Amendment of the Corporate Bylaws with respect to the Company’s registered office;

2.-Change of registered office for tax purposes; and

3.-Designation of the special delegates of the meeting

POINT ONE. As for point one of the agenda, the chairman of the meeting indicated that it was the intention of the shareholders to change the Company’s registered office from Reynosa, Tamaulipas, to Ciudad Juarez, Chihuahua, due to the different advantages of Juarez over Reynosa. For that purpose, the chairman indicated that the Company’s Corporate Bylaws should be amended, in Article Three, to reflect the new registered office at Ciudad Juarez, Chihuahua.

If such proposal is approved, Article Three, as amended, will read as follows:

“ARTICLE THREE: REGISTERED OFFICE.- The Company’s registered office will be located at Ciudad Juarez, Chihuahua, Mexico, and it may establish agencies, branches or representative offices any other place in the Mexican Republic or abroad and submit to contractual addresses.”

If such proposal is accepted, new Share Certificates must be issued with the amended registered office and exchanged for the existing Certificates. In addition, notices and notifications must be given to the different pertinent authorities and third parties, including the respective notations in the Corporate Books.

According to the proxy instructions, the shareholders’ representatives unanimously adopted the following:

RESOLUTIONS

“1. The amendments to ARTICLE THREE of the Corporate Bylaws are approved.”

“2. ARTICLE THREE, as amended, reads as follows:

“ARTICLE THREE: REGISTERED OFFICE.- The Company’s registered office will be located at Ciudad Juarez, Chihuahua, Mexico, and it may establish agencies, branches or representative offices any other place in the Mexican Republic or abroad and submit to contractual addresses.”

“3. As a result of the above, it is ordered that each and every one of the pertinent notifications, including the different notations in the Corporate Books, be made.

Such notifications include, without limitation, to the Public Registry of Property and Commerce, the National Registry of Foreign Investments, and the Secretariat of Finance and Public Credit.”

“4. It is ordered that the existing Share Certificates be canceled and replaced with new Certificates, reflecting the Company’s new registered office.”

POINT TWO. As to point two on the agenda, the chairman of the meeting told the attendees that it was also necessary to change the registered office for tax purposes of the company due to the change of registered office approved in the preceding point.

If such proposal is approved, the above must be notified to the appropriate authorities.

After having reviewed and discussed the above proposals and following the proxy instructions, the shareholder representatives unanimously adopted the following:

RESOLUTIONS

“The change of registered office for tax purposes of the Company is approved so that, hereafter, it will be located at Calle Isaac Newton No. 1650, Parque Industrial Antonio J. Bermudez, Postal Code 3247, in Ciudad Juarez, Chihuahua. The above is subject to the notification made to the Secretariat of Finance Public Credit, through the local office of the Tax Administration System.”

POINT THREE. In connection with point three on the agenda, the meeting decided to designate the special delegates to carry out the necessary acts so that the pertinent resolutions will have full legal effect.

In accordance with the proxy instructions, the shareholder representatives unanimously adopted the following:

RESOLUTION

“RUPERTO ZAPATA ROMAN, LUIS A. UNIKEL FERNANDEZ, MARIO PERERA RIVEROLL, JORGE MILLAN SALAS and ORALIA CANO ARROYO are designated as special delegates of this meeting so that, together or any of them in any number, may perform all legal and/or material acts necessary to implement the above resolutions and, if necessary, to appear before the Notary Public of their choice to execute the pertinent notary instrument, which will include all or part of this meeting and must be recorded at the Public Registry of Property and Commerce of the previous registered office and the new registered office of the Company. The above is for purposes of complying with the stipulations of Article 10 of the General Law of Business Companies. LUIS A. UNIKEL FERNANDEZ is authorized to issue certifications of these minutes.”

As there was no other matter to take up, the meeting had to be adjourned for the necessary time to prepare the minutes of this meeting, which minutes were then read, approved and signed in accordance with the Law and the Corporate Bylaws.

It is noted for the record that, from the beginning of this meeting until each and every one of the resolutions contained in these minutes were adopted, all the shares into which the capital stock of BOMBARDIER (MEXICO), S.A. DE C.V. is divided were represented and that its partners are not required to register with the Federal Taxpayers Registry, since they presented the account referred to in paragraph five of Article 27 of the Tax Code of the Federation.

Attached to these minutes are the proxies, as well as the list of attendees.

The meeting was adjourned at 11:30 a.m. on July 24, 2001.

Initialed.- Mr. LUIS A. UNIKEL FERNANDEZ -Chairman.-Initialed.-Mr. MARIO PERERA RIVEROLL.-Secretary and Teller.

As specified above and for all pertinent legal purposes, these minutes of the Special General Meeting of the Shareholders of Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, held on July 24, 2001 are officially recorded. The text of these minutes has been transcribed verbatim in the body of this Public Deed and is deemed reproduced herein in each and every one of its parts.

The Special Delegate of the Meeting, the Minutes of which have been officially recorded through this Public Deed, Licenciado Ruperto Zapata Roman, for purposes of formalizing the resolutions adopted at the Meeting in question, executes the following

CLAUSES:

ONE: The amendment to Article Three of the Company’s Corporate Bylaws, with respect to its registered office is formalized to read as follows:

“ARTICLE THREE: REGISTERED OFFICE.- The Company’s registered office will be located at Ciudad Juarez, Chihuahua, Mexico, and it may establish agencies, branches or representative offices any other place in the Mexican Republic or abroad and submit to contractual addresses.”

TWO. The Meeting’s resolution ordering that each and every one of the pertinent notifications be made, including the different notations in the corporate books, due to an amendment of Article Three of the Company’s Corporate Bylaws as specified in the immediately preceding Clause, is formalized.

THREE. The Meeting’s resolution ordering cancellation of the existing share certificates and their replacement with new certificates reflecting the Company’s new registered office as specified in Clause One above is formalized.

FOUR. The Meeting’s resolution approving the change of registered office for tax purposes of the Company so that, hereafter, it will be located at Calle Isaac Newton No. 1650, Parque Industrial Antonio J. Bermudez, Postal Code 3247, in Ciudad Juarez, Chihuahua is formalized.

FIVE. The Meeting’s resolution designating as its Special Delegates Messrs. Ruperto Zapata Román, Luis A. Unikel Fernández, Mario Perera Riveroll, Jorge Millan Salas and Oralia Cano Arroyo so that, jointly or any of them in any number, they will carry out the acts set forth in the resolution of point Three of its Agenda is formalized.

LEGAL STATUS

The party appearing before me, Licenciado Ruperto Zapata Román, evidences his legal status with the Minutes of the Meeting that are officially recorded, while the legal existence of Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, is evidenced with the certified copy of the First Certified Copy that I, the Notary, attest to having seen of Public Deed No. 1984 dated September 9, 1997, executed before Licenciado Alfonso Salinas Flores, Notary Public No. 135, practicing in the City of Reynosa, Tamaulipas, which First Certified Copy is recorded at the Public Registry of Commerce of the City of Reynosa, Tamaulipas, under No. 656, Volume VI, 1^st Auxiliary Book of Companies, Powers of Attorney and Miscellaneous Contracts, on the front of Page 228, on September 10, 1997, evidencing the organization of the aforementioned Company, the pertinent parts of its Corporate Bylaws having been transcribed. “ARTICLE TWO. NAME. The name of the company is BOMBARDIER (MEXICO), and it will always be followed by the words “SOCIEDAD ANONIMA DE CAPITAL VARIABLE” or their abbreviation “S.A. DE C.V.” -ARTICLE THREE. REGISTERED OFFICE. The Company’s registered office will be the City of Reynosa, Tamaulipas, Mexico, and it may establish agencies, branches or representative offices in any other place in the Mexican Republic or abroad, and submit to contractual places of business. ARTICLE FOUR. CORPORATE PURPOSE. The company’s purpose shall not include those activities restricted for companies with Foreign Investment in accordance with the laws of Mexican Legislation. The corporate purpose includes the following activities: 1.-Manufacture, assembly, distribution and sale of motorized products and their components; 2.- Importation, exportation, sale, assembly, transformation, manufacture and trade of all manner of materials, parts,

components, assemblies, subassemblies, accessories, equipment and machinery used in the design, manufacture, assembly (partial and total), distribution and sale of motorized products and their components, including the search for potential suppliers; 3.- Actively promoting the sales by third parties in Mexico; 4.-Implementing various business and economic agreements in the field of business and others; 5.-Seeking opportunities for future development of cooperation, expanding the economic, commercial and technological exchange of information and the development of business and economic links with third parties; 6.-Acting in trade and in other transactions, including the introduction of the most innovative objectives in world technology, importation of machinery and equipment, and development of technological services; 7.-Carrying out the acts that a company requires, such as reports on local competition, executing contracts, evaluating the general condition of business in Mexico and outside the country; 8.-Carrying out all necessary advertising with respect to itself as well as its subsidiaries and affiliates throughout the Mexican Republic; 9.-Establishing, building, renting, operating, acquiring shops, warehouses, storage rooms and any other establishment necessary for the Company’s purposes; 10.-Acquiring, owning, leasing, buying, selling, disposing of and, generally, trading through legal operations with respect to its fixed assets, shares and other credit instruments in Mexico, as well as abroad; 11.-Acquiring, owning, leasing and disposing of all manner of personal and real property, in order to satisfy the Company’s corporate objective, including the establishment of trusts, as well as any other type of operation permitted by the Law; 12.-Hiring employees, managers and executives, agents, customs agents, customs attorneys-in-fact, commission agents, professionals, representatives, intermediaries of all types and distributors necessary to fulfill the corporate purpose; 13.-Granting or receiving all manner of financing, with or without guarantees, establishing trusts, granting encumbrances, issuing and negotiating all manner of credit instruments, including granting its own guarantees and endorsements to third parties; 14.-Establishing administrative offices, agencies and branches in Mexico and abroad; 15.-Obtaining, acquiring, conveying, through franchises or concessions, and owning all manner of patents and marks and other industrial and intellectual property rights, copyrights, invention certificates and trademarks in Mexico and abroad; 16.-Receiving and granting all manner of powers of attorney, delegating them to its employees and executives, as well as modifying and/or revoking them at any time; 17.-Representing or being an agent of all manner of domestic or foreign business or industrial companies and getting involved in the sale and commercialization of their products and services; 18.-Generally, carrying out and executing all manner of legal acts and civil, commercial, administrative and any other agreements related to the corporate purpose.- ARTICLE FIVE. DURATION. The Company’s duration will be 99 (ninety-nine) years, which will be automatically extended for another 99 (ninety-nine) years unless, before the first term ends, the special shareholders meeting decides that the Company be dissolved. ARTICLE SIX. NATIONALITY. The company is of Mexican Nationality, the founding partners agreeing and it being established, for future partners that the Company may have, that “Any foreigner who, at the event of organization or any other subsequent time acquires an interest or share in the Company will be considered, for that mere fact, as Mexican with respect to one and the other, as well as the property, rights, concessions, holdings or interests that the Company owns or else with respect to the rights and obligations arising out of contracts executed with Mexican authorities, and it shall be understood that he agrees not to invoke the protection of his government, under the penalty, if he breaches the agreement, of

losing such interests, rights or shares, to the benefit of the Mexican Nation.”-ARTICLE SEVEN. CAPITAL. The capital stock is made up of a fixed portion and another variable portion. The minimum fixed capital is $50,000.00 (Fifty Thousand and 00/100 Pesos, National Currency), represented by 50,000 (Fifty Thousand) common, registered shares with a par value of $1.00 (One and 00/100 Peso, National Currency) each, fully subscribed to and paid up. The variable capital will be unlimited and will be represented by the shares determined by the shareholders meeting that approves its issue...” ARTICLE TWENTY-FIVE. GENERAL SHAREHOLDER MEETINGS. The general meeting of shareholders with shares, legally called to order, is the supreme body of the Company, and its decisions bind even those who are absent and dissenting, except for the right of opposition referred to in article 201 (two hundred one) of the General Law of Business Companies. ARTICLE TWENTY-SIX. TYPES OF MEETINGS. The general shareholder meetings will be regular and special. All of them will be regular except for those that are held to discuss any one of the matters included in article 182 (one hundred eighty-two) of the General Law of Business Companies, which meetings will be special. Shareholder meetings discussing an increase or decrease in the Company’s variable capital will also be regular.-ARTICLE TWENTY-NINE. FULL MEETINGS (ASAMBLEAS TOTALITARIAS). They may be held without the requirement of publishing the notice of meeting, and the resolutions that are adopted will be valid in the following cases: a).-When, from the beginning until the end of the meeting, the entire capital stock is represented, and; b).-When a meeting is held as a continuation of another previous one, and, the date and time to continue it have been indicated in it, provided no matters other than those indicated in the first notice of meeting are taken up.-ARTICLE THIRTY. REPRESENTATION. The shareholders will have the right to be represented at the meeting by the person(s) that they designate, through a simple proxy signed by the concerned party and two witnesses. Shareholders may not be represented by any of the managers or shareholders’ auditors (comisarios).-ARTICLE THIRTY-ONE. MINUTES OF MEETINGS. The minutes of the meetings will be recorded in the respective book and will be signed by the Chairman and Secretary of the meeting, as well as by the shareholders’ auditors who attend.-ARTICLE THIRTY-TWO. CHAIRMAN AND SECRETARY OF THE MEETINGS. The meetings will be chaired by the Sole Director and CEO (Administrador Unico) or by the Chairman of the Board of Directors or, as applicable, by the person elected by the majority of votes of those present. The Secretary and Teller of the meeting will be designated by the majority of the shareholders who are present or by the Chairman.-ARTICLE THIRTY THREE. ATTENDANCE QUORUM AND RESOLUTIONS ADOPTED BY REGULAR MEETINGS. In order for a regular shareholders meeting held by virtue of the first notice to be valid, it will be necessary for at least 50% (fifty percent) of the capital stock to be represented thereat, and the resolutions will be valid when adopted by the favorable vote of the majority of the shares represented at the meeting.”

NATIONAL REGISTRY OF FOREIGN INVESTMENTS

The undersigned Notary notes for the record that the party appearing before me was asked for evidence of renewal of registration of Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, with Section II of the National

Registry of Foreign Investments for the year 2001, and, as he did not show it to me, I warned him of the notice that I will file in accordance with Article 34 (thirty-four) of the Law of Foreign Investment.

ARTICLE 27 OF THE TAX CODE OF THE FEDERATION

The undersigned Notary certifies that, in the capacity in which he acts, Licenciado Ruperto Zapata Roman tells me under oath that Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, will file the account referred to in paragraph five of Article 27 (twenty-seven) of the Tax Code of the Federation with the pertinent Local Revenues Administration of the Secretariat of Finance and Public Credit no later than the thirty-first day of March of two thousand four.

IDENTIFICATION

Licenciado Ruperto Zapata Román identifies himself with voting credential with voter code ZPRMRP70013128H300, issued by the Federal Elections Institute.

PERSONAL PARTICULARS

As for his personal particulars, the party appearing before me said that his name is Ruperto Zapata Román. He is a Mexican citizen, married, of legal age, a professional, originally from and a resident of this City, with address at Calle Sierra Oriental No. 1340, of Colonia Loma Linda, with Federal Taxpayer Registration ZARR-700131.

I, the Notary, attest: a) That the party appearing before me, whom I do not know personally, identified himself in the manner indicated and to the Undersigned’s satisfaction, also stating under oath that he is the person who he says he is and who appears in the identification that he has shown me b) That, in my judgment, he has full legal capacity, and that I am not aware that he is subject to any civil impediment; c) That I read the above Deed to him; d) That I explained to him its value and the legal consequences of its contents; e) That what is transcribed and inserted above is in accordance with the wishes of the party appearing before me; f) That, in my presence, the party appearing before me stated his satisfaction with the Deed and signed it on this date, at twelve p.m..-I so attest.

LICENCIADO RUPERTO ZAPATA ROMAN.- Initial. Before me.- Signature and Authorizing seal of the Notary.

AUTHORIZATION

I, the Notary, authorize these minutes, since all the requirements for their existence and full validity required by the Law have been satisfied, at one p.m. on the (6th) sixth of the month of (August) of 2001 two thousand one.-Note for the record.-I so attest.-Signature and authorizing seal of the Notary.

THIS IS A FIRST CERTIFIED COPY, TRUE AND ACCURATE, EXTRACTED VERBATIM FROM ITS ORIGINAL, WHICH IS IN THE NOTARY BOOK OF PUBLIC INSTRUMENTS FOR WHICH I AM RESPONSIBLE, IN WHICH I NOTE THIS ISSUANCE AT THE MARGIN OF ITS ORIGINAL. IT IS ISSUED FOR USE BY THE CONCERNED PARTIES, IN (FOUR) PAGES OF TEXT, DULY COMPARED, STAMPED AND SIGNED, IN MY OFFICE, IN THIS CITY OF REYNOSA, STATE OF TAMAULIPAS, ON THE (SIXTH) OF THE MONTH OF (AUGUST) OF TWO THOUSAND ONE.

I SO ATTEST.

[STAMP]	[SIGNATURE]
UNITED MEXICAN STATES	LIC. JORGE A. GARCÍA CORCUERA
LIC. JORGE A. GARCÍA CORCUERA	NOTARY PUBLIC NO. 140,
NOTARY PUBLIC NO. 140
Cd. Reynosa, Tam	Lic. Enrique Fco. Sepulveda Gonzalez
	NOTARY PUBLIC No. 60
	CD. REYNOSA, TAM.

RECORDED UNDER NO. 57, PAGE 97 OF VOLUME 154 OF BOOK 1 OF COMMERCE

CD. JUAREZ, CHIH. ON SEPT. 20, 2001

THE REGISTRAR

[Stamp]

UNITED MEXICAN STATES

FREE AND SOVEREIGN STATE OF CHIHUAHUA

PUBLIC REGISTRY OF PROPERTY AND COMMERCE

BRAVOS DISTRICT

[EMBLEM]	PUBLIC REGISTRY OF PROPERTY AND COMMERCE
TAMAULIPAS

STATE OF TAMAULIPAS

PUBLIC REGISTRY OF PROPERTY AND COMMERCE

APPENDIX

REGISTRATION INFORMATION

FILING: LIC. JORGE A. GARCÍA CORCUERA, 140

	SPECIAL MEETING 1 DEED 13836-74
Company BOMBARDIER MEXICO, S.A. DE C.V.	SECTION	NUMBER	VOLUME	BOOK	DATE
	COMMERCE	500	2-010	ONE	8/24/2001
At the request of RUPERTO ZAPATA ROMAN	REG. OFF. 2	MUNICIPALITY			REYNOSA
	FEES PAYABLE	PAYMENT RECEIPT		DOCUMENT
	$144.00, NATIONAL CURRENCY	D20795		GCS 08/09/2001	11:01 112
Issued by the Secretariat of Finance and Administration of the State of TAMAULIPAS

THE DIRECTOR	[Signature]
[Signature]	REGISTRAR
LIC. RICARDO [ILLEGIBLE] ROSAS	GERARDO CORPUS SANCHEZ
[STAMP]
PUBLIC REGISTRY OF PROPERTY AND COMMERCE

[TWO STAMPS]

PUBLIC REGISTRY OF PROPERTY AND COMMERCE

I, the undersigned, Licenciado Enrique Fco. Sepulveda Gonzalez, Notary Public No. 60, practicing in this City of Reynosa, Tamaulipas, note for the record and certify: that this document, consisting of five pages of text, is a photostatic copy that agrees faithfully and exactly with its original, which I saw and which contains: Public Deed No. 13,836 dated August 6, 2001, executed before Licenciado Jorge A. Garcia Corcuera, Notary Public Number 140, who practiced in this City, in which is evidenced the Official Recording of the Minutes of the Special General Meeting of the Shareholders of “Bombardier (Mexico), S.A. de C.V.,” held on July 24, 2001.- The certification was recorded in the Book of Control of Acts of Certifications and Verifications with number 17,725, at 12:15 p.m. on the 15^th of the month of May of 2004—two thousand four.-Note for the record.-I so attest.

[STAMP]	[SIGNATURE]
UNITED MEXICAN STATES	Lic. Enrique Fco. Sepulveda Gonzalez
Lic. Enrique Fco. Sepulveda Gonzalez	Notary Public No. 60
Notary Public No. 60
CD. REYNOSA, TAM.

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Lic. César Humberto Isassi Cantú

Notary Public No. 107

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LIC. CÉSAR HUMBERTO ISASSI CANTÚ

NOTARY PUBLIC NO. 107

Cd. Reynosa, Tam.

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COMPARED

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VOLUME 217 (CCXVII), TWO HUNDRED SEVENTEEN.

DEED 7081, SEVEN THOUSAND EIGHTY-ONE.

PAGE 55, FIFTY-FIVE.

In the city of Reynosa, State of Tamaulipas, United Mexican States, at two p.m. on the (28th) twenty-eighth of April of 2004 (two thousand four), before me, LICENCIADO CESAR HUMBERTO ISASSI CANTU, NOTARY PUBLIC NO. ONE HUNDRED SEVEN, practicing in this City, there appears Licenciada Anaid Nuño Vega, in her capacity of Special Delegate of the Special General Shareholders Meeting of Commercial Company BOMBARDIER (MEXICO), SOCIEDAD ANONIMA DE CAPITAL VARIABLE, held on April 13, 2004, and she requests the official recording of the Minutes of the Meeting, in representation of which she appears, and the Agenda of which is the following: 1.-Discussion, and, as applicable, approval of the amendment to the Corporate Bylaws with respect to the Company’s name. 2.-Grant of Special Powers of Attorneys in connection with the modification of the name; and 3.-Designation of the Special Delegates. I, the Notary, attest to having before me, on five (5) pages of text, the Minutes of the Meeting, the official recording of which is requested me, which minutes are transcribed fully as follows:

SPECIAL GENERAL MEETING

OF THE SHAREHOLDERS OF

BOMBARDIER (MEXICO), S.A. DE C.V.

In Ciudad Juarez, State of Chihuahua, Mexico, at 2:00 p.m. on April 13, 2004, at the registered office of the Company BOMBARDIER (MEXICO), S.A. DE C.V., Messrs. JORGE A. GARCÍA, representing the Company BOMBARDIER RECREATIONAL PRODUCTS INC., and, for the other party, Mr. LUIS A. UNIKEL FERNÁNDEZ, representing the Company BOMBARDIER MOTOR CORPORATION OF AMERICA, appeared and met, in their capacity of shareholder representatives, in order to hold a special general shareholders meeting, to which they had been duly summoned.

Through a unanimous vote of the attendees, JORGE A. GARCÍA was appointed to serve as chairman of the meeting, and, after accepting such position, he designated LUIS A. UNIKEL FERNÁNDEZ to serve as Secretary, and the latter also accepted such designation.

The chairman of the meeting appointed LUIS A. UNIKEL FERNÁNDEZ as teller, and, after accepting the position granted and examining the pertinent documentation, the latter certified that all the shares representing the capital stock of the company BOMBARDIER (MEXICO), S.A. DE C.V., were represented at the meeting, whether by their shareholders or through proxies, duly granted and according to the following distribution:

	SHARES
	SERIES B-1	SERIES B-2	VOTES
SHAREHOLDERS
BOMBARDIER RECREATIONAL PRODUCTS INC.	49,999	57,049,999	57,099,998
BOMBARDIER MOTOR CORPORATION OF AMERICA	1	1	2
TOTAL	50,000	57,050,000	57,100,000

Since all the shares of the subscribed capital stock of the company BOMBARDIER (MEXICO), S.A. DE C.V., were represented at the meeting, the chairman legally called it to order,... according to the terms of article 188 of the General Law of Commercial Companies, even though its notice of meeting had not been published.

The meeting was held according to the following agenda, which was approved with the unanimous vote of the attendees.

AGENDA

1.-Discussion and, as applicable, approval of the amendment to the Corporate Bylaws with respect to the Company’s name.

2.-Grant of Special Powers of Attorney in connection with the modification of the name; and

3.-Designation of the special delegates.

POINT ONE. In connection with point one on the agenda, the chairman of the meeting stated that it was necessary to amend and modify the Company’s bylaws in their ARTICLE TWO in order to modify the Company’s name. He indicated that, if it was possible to obtain the pertinent permit issued by the Secretariat of Foreign Relations, the latter should authorize the name BRP Mexico, and, for that purpose, he proposed that, if the shareholders approved the modification in question, it should be drafted in the following terms:

“ARTICLE TWO: NAME.-The name of the company is “BRP Mexico,” and it will always be followed by the words “SOCIEDAD ANONIMA DE CAPITAL VARIABLE” or their abbreviation “S.A. DE C.V.”

If such proposal is approved, replacement of the existing share certificates with new ones and notification of the change for filing of the pertinent notices to the appropriate authorities will have to be ordered.

After having reviewed and discussed the above proposals and acting according to the proxy instructions, the shareholder representatives, by a unanimous vote, adopted the following:

RESOLUTIONS

1.-Modification of ARTICLE TWO of the Company’s Corporate Bylaws is approved, subject to obtaining the approval and issuance of the permit from the Secretariat of Foreign Relations.

2.-Subject to the approval of the Secretariat of Foreign Relations, ARTICLE TWO of the Company’s Corporate Bylaws will read as follows:

“ARTICLE TWO: NAME.-The name of the company is “BRP Mexico,” and it will always be followed by the words “SOCIEDAD ANONIMA DE CAPITAL VARIABLE” or their abbreviation “S.A. DE C.V.”

3.-Once the Secretariat of Foreign Relations issues the name change permit, these Minutes, together with the above-mentioned permit, will be officially recorded with a Notary Public, after being recorded at the Public Registry of Commerce of the registered office.

4.-If the permit from the Secretariat of Foreign Relations with respect to the name change is approved and issued, it is ordered that all pertinent notices and notifications be sent to the appropriate authorities so that this amendment and modification of the corporate bylaws will have all legal effects. Such authorities must make the notations and changes that they deem pertinent, including, among others, to the National Registry of Foreign Investments, the Public Registry of Commerce and the Secretariat of Finance and Public Credit, and other pertinent local, state and federal entities.

5.-Subject to the condition precedent consisting of obtaining the respective permit, the shareholders resolve that all existing share certificates be canceled and be replaced with the same number of share certificates with the new name, …

… in the event that the permit in question is issued. It is also ordered that the entries and notations be made in the corporate books and records so that, at the proper time, they will reflect the new company name.

POINT TWO. In accordance with point two on the agenda, the Chairman suggested that a Special Power of Attorney needs to be granted for Acts of Administration to several attorneys-in-fact in order to allow them to carry out, on behalf of this company, the series of notifications and notices to the appropriate authorities and other concerned parties, with respect to the name modification.

In accordance with the proxy instructions, the shareholder representatives, by a unanimous vote, adopted the following:

RESOLUTION

Subject to the condition mentioned in the Resolutions of the above Point One, Messrs. JORGE A. GARCÍA ADAME, LUIS A. UNIKEL FERNÁNDEZ, MARIO PERERA RIVEROLL, ÁNGEL E. CANTU, HUMBERTO GARZA CHARLES, ANAID NUÑO VEGA, MAYELA OLIMPIA MORENO HERNÁNDEZ and ORALIA CANO ARROYO will have the following Power of Attorney, which they may exercise jointly, separately, any of them in any number:

SPECIAL POWER OF ATTORNEY FOR ACTS OF ADMINISTRATION. Pursuant to Article 2554, paragraphs two and four, of the Federal Civil Code and its equivalents in the other Civil Codes of the States in the Mexican Republic, the above mentioned attorneys-in-fact are authorized to, on behalf of the company, file notices and notifications with respect to the name modification, and to carry out any special or general procedure required to obtain the name change and also for those acts resulting from the name modification, including, without limitation, notifications to the National Registry of Foreign Investments, the Federal Taxpayers Registry, the Secretariat of Finance and Public Credit, the Institute of the National Workers Housing Fund (Instituto del Fondo Nacional de la Vivienda para los Trabajadores - INFONAVIT), the Mexican Social Security Institute, and the Retirement Savings System, with the Secretariat of Economics, Customs, the National Registry of Importers, as well as to file them with any government agency, whether municipal, state, or federal.

POINT THREE. In connection with point three on the agenda with respect to designation of the special delegates, by a unanimous vote, and, as applicable, according to the proxy instructions, they adopted the following:

RESOLUTION

Messrs. JORGE A. GARCÍA ADAME, LUIS A. UNIKEL FERNANDEZ, MARIO PERERA RIVEROLL, ANGEL E. CANTU, HUMBERTO GARZA CHARLES, GABRIEL GARCÍA ROMÁN, RODOLFO ANDRÉS BARRERA GARCIA, GABRIEL GARZA FERNANDEZ, FRANCISCO JAVIER MEDINA MARTINEZ, ANAID NUÑO VEGA, MAYELA OLIMPIA MORENO HERNANDEZ and ORALIA CANO ARROYO are designated and authorized as special delegates, so that, jointly, separately, any of them in any number, according to the terms of Article 10 of the General Law of Commercial Companies, they will carry out all legal and/or material acts necessary to execute the above resolutions, including, without limitation, going to the Secretariat of Foreign Relations to apply for and process the modification of the Company’s name and so that they will request the total or partial official recording of these Minutes, signing the pertinent notary instrument, if necessary, before a Notary Public of their choice, which instrument must be recorded in the Public Registry of Commerce of the Company’s registered office. JORGE A. GARCÍA ADAME and LUIS A. UNIKEL FERNÁNDEZ are also authorized, either of them or both, to issue the necessary certifications of these Minutes.

As there was no other matter to discuss, the meeting was adjourned, and these minutes were prepared and were subsequently read, approved and signed by the Chairman, the Secretary and the Teller.

It is noted for the record that, from the beginning of the meeting until each and every one of the resolutions contained in these minutes were adopted, all the shares into which the capital stock of BOMBARDIER (MEXICO), S.A. DE C.V., is divided were represented and that the shareholders are not required to register with the Federal Taxpayers Registry, since they presented the account referred to in paragraph four of Article 27 of the Tax Code of the Federation.

Attached to these minutes are the proxies, as well as the list of attendees at this meeting.

The meeting was adjourned at 4:00 p.m. on April 13, 2004.

Initialed.-JORGE A. GARCÍA-Chairman.-Initialed.-LUIS A. UNIKEL FERNÁNDEZ.-Secretary and Teller.

In addition, the party appearing before me, Licenciada Anaid Nuño Vega, shows the Undersigned Notary the permit that was applied for and obtained from the Secretariat of Foreign Relations for the change of name of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, to that of BRP Mexico, Sociedad Anónima de Capital Variable, which permit is fully transcribed as follows:

At the upper right margin: “OFFICE OF THE GENERAL COUNSEL.-PERMITS OFFICE, CONSTITUTIONAL ARTICLE 27.-COMPANIES SUBOFFICE.-At the upper left margin, a Seal with the National Emblem and a legend that says.-UNITED MEXICAN STATES.-SECRETARIAT OF FOREIGN RELATIONS.-At the right margin: PERMIT 28000908.-FILE 199709020161.-PAGE 7J0A17V5.-Pursuant to the application filed by Mr(s). JORGE A. GARCÍA ADAME, representing BOMBARDIER MEXICO SA DE CV, this Secretariat grants the permit to change the name of BOMBARDIER MEXICO SA DE CV TO BRP MEXICO SA DE CV.-The permit having been GRANTED to the applicant to amend its Corporate Bylaws as specified above, pursuant to articles 16 of the Law of Foreign Investment and 15 of the Regulations of the Law of Foreign Investment and of the National Registry of Foreign Investments.-The concerned party must give notice of the use of this permit to the Secretariat of Foreign Relations within six months following the issuance thereof, as set forth in article 18 of the Regulations of the Law of Foreign Investment and of the National Registry of Foreign Investments.-This permit will have no effect if, within ninety working days following the date on which it is granted, the concerned parties do not appear before a notary public to execute the instrument pertaining to the amendment to the bylaws of the Company in question, in accordance with the stipulations of article 17 of the Regulations of the Law of Foreign Investment and of the National Registry of Foreign Investments. In addition, it is granted without detriment to what is stipulated in article 91 of the Law of Industrial Property.-The above is notified pursuant to articles: 27, section I, of the Political Constitution of the United Mexican States; 28, section V, of the Organizational Law of the Federal Public Administration; 16 of Foreign Investment, and 15 and 18 of the Regulations of the Law of Foreign Investment and of the National Registry of Foreign Investments.- CIUDAD VICTORIA, TAMAULIPAS, April 27, 2004. THE DELEGATE.-Signature.-LIC. MARINA MEDINA AVILA.- A seal with the national emblem that says “UNITED MEXICAN STATES.-SECRETARIAT OF FOREIGN RELATIONS.-CD. VICTORIA, TAM. REPRESENTATIVE OFFICE.”

In the above terms and for all pertinent legal purposes, the Minutes of the Special General Shareholders Meeting of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, held on April 13, 2004, have been officially recorded, the text of which minutes have been transcribed verbatim in the body of this Public Deed and are deemed reproduced herein in each and every one of their parts.

The Special Delegate of the Meeting, the Minutes of which were officially recorded in terms of this Public Deed, Licenciada Anaid Nuño Vega, for purposes of formalizing the resolutions adopted at the Meeting in question, states the following:

CLAUSES:

One. Based on the permit issued by the Secretariat of Foreign Relations that was transcribed in the body of this Public Deed, the modification of the Article Two of the Corporate Bylaws of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, is formalized to read as follows:

“ARTICLE TWO: NAME.-The name of the company is “BRP Mexico,” and it will always be followed by the words “SOCIEDAD ANONIMA DE CAPITAL VARIABLE” or their abbreviation “S.A. DE C.V.”

Two. Based on the permit issued by the Secretariat of Foreign Relations, which was transcribed in the body of this Public Deed, the Special Power of Attorney for Acts of Administration that the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable granted to Messrs. Jorge A. García Adame, Luis A. Unikel Fernández, Mario Perera Riveroll, Ángel E. Cantu, Humberto Garza Charles, Anaid Nuño Vega, Mayela Olimpia Moreno Hernández and Oralia Cano Arroyo, so that they will exercise it jointly, separately, any of them in any number, according to the terms and with the powers set forth in the resolution of point two of the agenda of the Meeting, the Minutes of which were officially recorded in terms of this Public Deed and under the new name of the Company, which is BRP Mexico, Sociedad Variable de Capital Variable, is formalized.

Three. The designation of Messrs. Jorge A. García Adame, Luis A. Unikel Fernández, Mario Perera Riveroll, Ángel E. Cantu, Humberto Garza Charles, Gabriel García Román, Rodolfo Andrés Barrera García, Gabriel Garza Fernández, Francisco Javier Medina Martínez, Anaid Nuño Vega, Mayela Olimpia Moreno Hernández and Oralia Cano Arroyo as Special Delegates of the Special General Shareholders Meeting, the Minutes of which were officially recorded in terms of this Public Deed so that, jointly, separately, any of them in any number, they will carry out the acts contemplated in the resolution of point three of its agenda, is formalized.

Article 1890 (one thousand eight hundred ninety) of the Civil Code in effect for the State of Tamaulipas.

“1890.-In all general powers of attorney for lawsuits and collections, in order for them to be understood to have been granted with no limitation whatsoever, it will be sufficient for it to be said that they are granted with all general powers and with the special ones that require a special clause under the Law.-In general powers of attorney to manage property, it will be sufficient to state that they are granted with such capacity in order for the attorney-in-fact to have all manner of administrative powers.-In general powers of attorney to exercise acts of ownership, it will be sufficient for it to be said that such general powers of attorney are granted with such capacity in order for the attorney-in-fact to have all the powers of owner, both with respect to the property, as well as to take all manner of steps to defend or manage it.-When, in the three cases mentioned above, it is wished to limit the powers of the attorney-in-fact, the limitations will be specified or special powers of attorney will be granted on the matter.-Notaries will insert this Article in the certified copies of powers of attorney executed before them. If the concerned parties have not inserted it in the text of the document, then the officials before whom the parties executing the power of attorney and the witnesses ratified their signatures, in accordance with Section II of Article 1887 in connection with 1891, shall do so at the bottom of the Power of attorney and before the signatures of ratification,.”

Article 2554 (two thousand five hundred fifty-four) of the Federal Civil Code that is in effect.-”2554.-In all general powers of attorney for lawsuits and collections, in order for them to be understood to have been granted with no limitation whatsoever, it will be sufficient for it to be said that they are granted with all general powers and the special ones that require a special clause under the Law.-In general powers of attorney to manage property, it will be sufficient to state that they are granted with such capacity in order for the attorney-in-fact to have all manner of administrative powers.-In general powers of attorney to exercise acts of ownership, it will be sufficient for them to be granted with such capacity in order for the attorney-in-fact to have all the powers of owner, both with respect to the property, as well as to take all manner of steps to defend it.-When, in the three cases mentioned above, it is wished to limit the powers of the attorney-in-fact, the limitations will be specified or special powers of attorney will be granted on the matter.-Notaries will insert this Article in the certified copies of powers of attorney executed before them.

LEGAL STATUS:

The party appearing before me, Licenciada Anaid Nuño Vega, evidenced her legal status with the Minutes of the Meeting that were officially recorded in terms of this Public Deed, while she evidenced the legal existence of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, with the First Certified Copies of the Public Deeds indicated below:

(i) First Certified Copy of Public Deed No. 1984 of September 9, 1997, executed before Licenciado Alfonso Salinas Flores, Notary Public No. 135, practicing in the City of Reynosa, Tamaulipas, which is recorded at the Public Registry of Commerce of the City of Reynosa, Tamaulipas, under No. 656, Volume VI, 1st Auxiliary Book of Companies, Powers of Attorney and Miscellaneous Contracts, Page 228, Front, on September 10, 1997, in which is evidenced the deed of incorporation of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, the pertinent parts of its Corporate Bylaws being transcribed: “ARTICLE TWO. NAME. The name of the company is BOMBARDIER (MEXICO), and it will always be followed by the words “SOCIEDAD ANONIMA DE CAPITAL VARIABLE” or their abbreviation “S.A. DE C.V.” ARTICLE THREE. REGISTERED OFFICE. The Company’s registered office will be the City of Reynosa, Tamaulipas, Mexico, and it may establish agencies, branches or representative offices in any other place in the Mexican Republic or abroad, and submit to contractual places of business. ARTICLE FOUR. CORPORATE PURPOSE. The company’s purpose shall not include those activities restricted for companies with Foreign Investment in accordance with the laws of Mexico. The corporate purpose includes the following activities: 1.-Manufacture, assembly, distribution and sale of motorized products and their components; 2.- Importation, exportation, sale, assembly, transformation, manufacture and trade of all manner of materials, parts, components, assemblies, subassemblies, accessories, equipment and machinery used in the design, manufacture, assembly (partial and total), distribution and sale of motorized products and their components, including the search for potential suppliers; 3.- Actively promoting the sale of third parties in Mexico; 4.-Implementing various business and economic agreements in the field of business and others; 5.-Seeking opportunities for future development of cooperation, expanding the economic, commercial and technological exchange of information and the development of business and economic links with third parties; 6.-Acting in trade and in other transactions, including the introduction of the most innovative objectives in world technology, importation of machinery and equipment, and development of technological services; 7.-Carrying out the acts that a company requires, such as reports on local competition, executing contracts, evaluating the general condition of business in Mexico and outside the country; 8.-Carrying out all necessary advertising with respect to itself as well as its subsidiaries and affiliates in the entire Mexican Republic; 9.-Establishing, building, renting, operating, acquiring shops, warehouses, storage rooms and any other establishment necessary for the Company’s purposes; 10.-Acquiring, owning, leasing, buying, selling, disposing of and, generally, trading through legal operations with respect to its fixed assets, shares and other credit instruments in Mexico, as well as abroad; 11.-Acquiring, owning, leasing and disposing of all manner of personal and real property, in order to satisfy the Company’s corporate objective, including the establishment of trusts, as well as any other type of operation permitted by the Law; 12.-Hiring employees, managers and executives, agents, customs agents, customs attorneys-in-fact, commission agents, professionals, representatives, intermediaries of all types and distributors necessary to fulfill the corporate purpose; 13.-Granting or receiving all manner of financing, with or without guarantees, establishing trusts, granting encumbrances, issuing and negotiating all manner of credit instruments, including granting its own guarantees and endorsements to third parties; 14.-Establishing administrative offices, agencies and branches in Mexico and …

… abroad; 15.-Obtaining, acquiring, conveying, through franchises or concessions, and owning all manner of patents and marks and other industrial and intellectual property rights, copyrights, invention certificates and trademarks in Mexico and abroad; 16.-Receiving and granting all manner of powers of attorney, delegating them to its employees and executives, as well as modifying and/or revoking them at any time; 17.-Representing or being an agent of all manner of domestic or foreign business or industrial companies and getting involved in the sale and commercialization of their products and services; 18.-Generally, carrying out and executing all manner of legal acts and civil, commercial, administrative and any other agreements related to the corporate purpose.- ARTICLE FIVE. DURATION. The Company’s duration will be 99 (ninety-nine) years, which will be automatically extended for another 99 (ninety-nine) years unless, before the first term ends, the special shareholders meeting decides that the Company be dissolved. ARTICLE SIX. NATIONALITY. The company is of Mexican Nationality, the founding partners agreeing and it being established, for [any] future partners that the Company may have, that “Any foreigner who, at the event of organization or any other subsequent time acquires an interest or share in the Company will be considered, for that mere fact, as Mexican with respect to one and the other, as well as with respect to the property, rights, concessions, holdings or interests that the Company owns or else with respect to the rights and obligations arising out of contracts executed with Mexican authorities, and it shall be understood that he agrees not to invoke the protection of his government, under the penalty, if he breaches the agreement, of losing such interests, rights or shares, to the benefit of the Mexican Nation.”-ARTICLE SEVEN. CAPITAL. The capital stock is made up of a fixed portion and another variable portion. The minimum fixed capital is $50,000.00 (Fifty Thousand and 00/100 Pesos, National Currency), represented by 50,000 (Fifty Thousand) common, registered shares with a par value of $1.00 (One and 00/100 Peso, National Currency) each, fully subscribed to and paid up. The variable capital will be unlimited and will be represented by the shares determined by the shareholders meeting that approves its issue...”-ARTICLE TWENTY-FIVE. GENERAL SHAREHOLDER MEETINGS. The general meeting of shareholders with shares, legally called to order, is the supreme body of the Company, and its decisions bind even those who are absent and dissenting, except for the right of opposition referred to in article 201 (two hundred one) of the General Law of Commercial Companies. ARTICLE TWENTY-SIX. TYPES OF MEETINGS. The general shareholder meetings will be regular and special. All of them will be regular except for those that are held to discuss any one of the matters included in article 182 (one hundred eighty-two) of the General Law of Commercial Companies, which meetings will be special. Shareholder meetings discussing an increase or decrease in the Company’s variable capital will also be regular.-ARTICLE TWENTY-NINE. FULL MEETINGS (ASAMBLEAS TOTALITARIAS). They may be held without the requirement of publishing the notice of meeting, and the resolutions that are adopted will be valid in the following cases: a).-When, from the beginning until the end of the meeting, the entire capital stock is represented, and; b).-When a meeting is held as a continuation of another previous one, and, the date and time to continue it have been indicated in it, provided no matters other than those indicated in the first notice of meeting are taken up.-ARTICLE THIRTY. REPRESENTATION. The shareholders will have the right to be represented at the meeting by the person(s) that they designate, through a simple proxy signed by the concerned party and two witnesses. Shareholders may not be represented by any of the managers or shareholders’ auditors (comisarios).-ARTICLE THIRTY-ONE. MINUTES OF MEETINGS. The minutes of the meetings will be recorded in the respective book and will be signed by the Chairman and Secretary of the meeting, as well as by the shareholders’ auditors who attend.-ARTICLE THIRTY-TWO. CHAIRMAN AND SECRETARY OF THE MEETINGS. The meetings will be chaired by the Sole Director and CEO (Administrador Unico) or by the Chairman of the Board of Directors or, as applicable, by the person elected by the majority of votes of those present. The Secretary and Teller of the meeting will be designated …

… by the majority of the shareholders who are present or by the Chairman.-ARTICLE THIRTY-THREE. QUORUM AND RESOLUTIONS ADOPTED BY REGULAR MEETINGS. In order for a regular shareholders meeting held by virtue of the first notice to be valid, it will be necessary for at least 50% (fifty percent) of the capital stock to be represented thereat, and the resolutions will be valid when adopted by the favorable vote of the majority of the shares represented at the meeting.”

(ii) First Certified Copy of Public Deed No. 13,836 dated August 6, 2001, executed before Licenciado Jorge A. García Corcuera, Notary Public No. 140, who practiced in the City of Reynosa, Tamaulipas, which is recorded at the Public Registry of Property and Commerce of the State of Tamaulipas under the Commerce Section, No. 500, Volume 2-010, Book One, Date of August 24, 2001, Municipality of Reynosa, and before the Public Registry of Property and Commerce of the District of Bravos of the State of Chihuahua, under No. 57, Page 97, Volume 154, Book 11 of Commerce, on September 20, 2001, evidencing the official recording of the Minutes of the Special General Shareholders Meeting of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, held on July 24, 2001, in which, among others, a resolution to amend Article Three of the Company’s Corporate Bylaws was adopted, the pertinent part of the text of such resolution been transcribed: “1. The amendments to ARTICLE THREE of the Corporate Bylaws are approved.”-”2. Amended ARTICLE THREE reads as follows: ARTICLE THREE: REGISTERED OFFICE.-The Company’s registered office will be located in Ciudad Juarez, Chihuahua, Mexico, and it may establish agencies, branches, or representative offices any place in the Mexican Republic or abroad and submit to contractual places of business.”

(iii) First Certified Copy of Public Deed No. 15,493 dated November 27, 2002, executed before Licenciado Jorge A. García Corcuera, Notary Public No. 140, who practiced in the City of Reynosa, Tamaulipas, which is recorded at the Public Registry of Property and Commerce of the District of Bravos, State of Chihuahua under No. 50, Pages 96, Volume 189, Book One of Commerce, on November 29, 2002, evidencing (i) the official recording of the Minutes of the Special General Shareholders Meeting of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, held on November 20, 2002, (ii) the official recording of the Minutes of the Special General Shareholders Meeting of the Commercial Company Servicios Bombardier (Mexico), Sociedad Anónima de Capital Variable, held on November 20, 2002, and (iii) the official recording of the Company Merger Agreement executed, for one party, by the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, as the absorbing Company, and, for the other party, by the Commercial Company Servicios Bombardier (Mexico), Sociedad Anónima de Capital Variable, as the absorbed Company, on November 20, 2002. According to the terms of the Public Deed in question, among others, the following resolutions were formalized: “1. The proposed merger is approved and, hence, it is agreed to proceed with the merger through absorption by BOMBARDIER (MEXICO), S.A. DE C.V., surviving as absorbing Company with SERVICIOS BOMBARDIER (MEXICO), S.A. DE C.V., as absorbed Company that will disappear when the merger is consummated. Pursuant to the above, the Merger Agreement is approved at this event, and the special delegates of this Meeting are each authorized to sign and carry out such Merger Agreement in representation of both companies.-2.-As a consequence of the merger, through a separate instrument, BOMBARDIER (MEXICO), S.A. DE C.V., will increase its capital stock, with the addition of the capital stock of SERVICIOS BOMBARDIER (MEXICO), S.A. DE C.V., The new capital stock of the Company will increase the share of its current shareholders in the same proportion of corporate interests that they had in SERVICIOS BOMBARDIER (MEXICO), S.A. DE C.V.- 3.-It is resolved to approve the balance sheet of BOMBARDIER (MEXICO), S.A. …

… DE C.V., at October 31, 2002, which balance sheet is added to these minutes as Attachment “A” and the figures therein will serve as a basis for the merger. The merger will be effective between the parties and with respect to third parties on November 29, 2002, provided that, by that date, the Merger Agreement has been recorded in the Public Registry of Property and Commerce, or on the date of registration, if such recording is done after November 29, 2002, provided that BOMBARDIER (MEXICO), S.A. DE C.V., and SERVICIOS BOMBARDIER (MEXICO), S.A. DE C.V., have obtained, by those dates, the creditors’ consent, or in the absence of such consent, they agree to pay off debts incurred and acknowledged, as well as those agreed to by both companies, with those creditors from whom they do not receive their consent. The above is with the understanding that, according to Article 223 of the General Law of Commercial Companies, the merger agreement must be published in the Official Journal of the registered offices of the merging companies, accompanied by the respective balance sheets.-4.-As a consequence of the merger, BOMBARDIER (MEXICO), S.A. DE C.V., will preserve, without any reservations or limitations, the entire net worth, that is, assets, liabilities and capital, of SERVICIOS BOMBARDIER (MEXICO), S.A. DE C.V.-5.-By virtue of the foregoing, BOMBARDIER (MEXICO), S.A. DE C.V., shall assume all of the rights belonging to SERVICIOS BOMBARDIER (MEXICO), S.A. DE C.V., and shall assume all of the obligations undertaken by the latter, arising out of any type of legal act.”

IDENTIFICATION:

Licenciada Anaid Nuño Vega identified herself with her voting credentials, with voter code NUVGAN77112109M900, issued by the Federal Elections Institute.

PERSONAL PARTICULARS:

As for personal particulars, the party appearing before me stated that her name is Anaid Nuño Vega, she is a Mexican citizen, unmarried, of legal age, born on November 21, 1977, a professional, originally from Mexico City, Federal District, and resident of this City, with address at Calle Cerro Peña Nevada No. 214, Colonia Las Fuentes, Sección Lomas, 88743, and with Federal Taxpayer Registration NUVA-771121-MR6.

I, the Notary, attest:

(i) That the party appearing before me showed me the registration renewal certification of the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, with the Second Section of the National Registry of Foreign Investments for the year 2004 (two thousand four), which, in a photostatic copy, is added to the Appendix of this Public Deed;

(ii) That the party appearing before me stated under oath that the Commercial Company Bombardier (Mexico), Sociedad Anónima de Capital Variable, will file, with the Local Tax Collection Administration under the Secretariat of Finance and Public Credit, the account referred to in paragraph five of Article 27 (twenty-seven) of the Tax Code of the Federation in a period not beyond the 31st (thirty-first) of March of the year 2005 (two thousand five).

(iii) That the party appearing before me was made aware that the exercise on National territory of the Company’s Powers of Attorney and appointments in favor of persons of Foreign Nationality is subject to that they have appropriate immigration status, granted by the Secretariat of Government, through the National Immigration Institute;

(iv) That the party appearing before me, whom I do not know personally, identified herself in the manner indicated and to the Undersigned’s satisfaction, also stating under oath that she is the person who she says she is and that appears in the identification that she has shown me, and that she has sufficient capacity to execute this instrument;

(v) That, in my judgment, the party appearing before me has full legal capacity, and that I am not aware that she is subject to any civil impediment;

(vi) That I read the above Deed to the party appearing before me;

(vii) That I explained to the party appearing before me its value and the legal consequences of its contents;

(viii) That what is transcribed and inserted above is in accordance with the wishes of the party appearing before me, and I saw its originals, to which I defer, and returned them to the party presenting them; and

(ix) That, in my presence, the party appearing before me stated her satisfaction with the Deed, and signed it on this date, at four p.m.-I so attest.

LICENCIADA ANAID NUÑO VEGA.- Initials.-Before me.-Signature and authorizing seal of the Notary.

AUTHORIZATION

I, the Notary, authorize these minutes, since all the requirements for their existence and full validity required by the Law have been satisfied, at five p.m. on the (28th) twenty-eighth of the month of (April) of 2004 (two thousand four).-Note for the record.-I so attest.-Signature and authorizing seal of the Notary.

THIS IS A FIRST CERTIFIED COPY, TRUE AND ACCURATE, EXTRACTED VERBATIM FROM ITS ORIGINAL, WHICH IS IN THE NOTARY BOOK OF PUBLIC INSTRUMENTS FOR WHICH I AM RESPONSIBLE, IN WHICH I NOTE THIS ISSUANCE AT THE MARGIN OF ITS ORIGINAL. IT IS ISSUED FOR USE BY THE CONCERNED PARTIES, IN (5) FIVE PAGES OF TEXT, DULY COMPARED, STAMPED AND SIGNED, IN MY OFFICE, IN THIS CITY OF REYNOSA, STATE OF TAMAULIPAS, ON THE (28TH) TWENTY-EIGHTH OF THE MONTH OF (APRIL) OF TWO THOUSAND FOUR.

I SO ATTEST.

[signature]

LIC. CESAR HUMBERTO ISASSI CANTU,

NOTARY PUBLIC NO. 107.

[stamp:]

UNITED MEXICAN STATES

LIC. CESAR HUMBERTO ISASSI

NOTARY PUBLIC No. 107

Cd. Reynosa, Tam

[stamp:]

RECORDED UNDER NO. 36, PAGE 52 OF VOLUME 237 OF THE FIRST BOOK OF COMMERCE

CD. JUAREZ, CHIH. ON MAY 7, 2004.

[signature]

LIC. ELSA DELGADO MENDOZA

[stamp:]

UNITED MEXICAN STATES

FREE AND SOVEREIGN STATE OF CHIHUAHUA

PUBLIC REGISTRY OF PROPERTY AND COMMERCE

BRAVOS DISTRICT

EX-5.1

[Ropes & Gray LLP Letterhead]

September 3, 2004

Bombardier Recreational Products Inc.

1061 Parent Street

Saint-Bruno, Québec

Canada J3V 6P1

Re: Registration Statement on Form F-4

SEC File No. 333-116582

Ladies and Gentlemen:

We have acted as counsel to Bombardier Recreational Products Inc., (the “Issuer”) in connection with the Registration Statement on Form F-4 (File No. 333-116582) (the “Registration Statement”) filed by the Issuer and the subsidiary guarantors listed on Schedule I hereto (the “Guarantors”) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement includes a prospectus (the “Prospectus”) which provides for the issuance by the Issuer in an exchange offer (the “Exchange Offer”) of $200,000,000 aggregate principal amount of 8.375% Senior Subordinated Notes due 2013 (the “Exchange Notes”). The Exchange Notes will be offered by the Issuer in exchange for a like principal amount of the Issuer’s outstanding 8.375% Senior Subordinated Notes due 2013 (the “Original Notes”). The Exchange Notes are to be issued pursuant to an Indenture, dated as of December 18, 2003 (as amended, supplemented or modified through the date hereof, the “Indenture”), among the Issuer, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”). Payment of the Exchange Notes will be guaranteed by the Guarantors pursuant to Article 11 of the Indenture and evidenced by a Notation of Guarantee attached to the Exchange Notes (the “Guarantee”).

In connection with this opinion, we have examined the Registration Statement and the Indenture, which has been filed with the Commission as an exhibit to the Registration Statement. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of documents and records and have made investigation of fact and examination of law as we have deemed appropriate in order to enable us to render the opinions set forth herein. In conducting our investigation, we have relied, without independent verification, on the accuracy of certificates of public officials, officers and representatives of the Issuer, the Guarantors and other appropriate persons.

In rendering the opinions set forth below, we have assumed that the Indenture is the valid and binding obligation of the Trustee.

Bombardier Recreational Products Inc. -2- September 3, 2004

Based upon the foregoing and subject to the qualifications set forth below, we are of the opinion that:

1.     When the Exchange Notes have been duly executed, authenticated and issued in accordance with the provisions of the Indenture and have been delivered against receipt of the Original Notes surrendered in exchange therefor upon completion of the Exchange Offer, the Exchange Notes will constitute valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms.

2.     When the Exchange Notes have been duly executed, authenticated and issued in accordance with the provisions of the Indenture and have been delivered against receipt of the Original Notes surrendered in exchange therefor upon completion of the Exchange Offer, and the Guarantees have been duly executed, delivered and attached to the Exchange Notes in accordance with the provisions of the Indenture, the Guarantees will constitute valid and binding obligations of the Guarantors, enforceable against each Guarantor in accordance with their terms.

Our opinions set forth above are subject to (i) bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and secured parties, and (ii) general principles of equity.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the use of our name under the caption “Legal Matters” in the Prospectus. By giving the foregoing consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,

Ropes & Gray LLP

SCHEDULE I

Guarantors

4186524 Canada Inc.

BRP Nova Scotia ULC

BRP US Inc.

BRP Holdings (USA) Inc.

BRP Holding LP

BRP LLC

BRP (Barbados) Inc.

BRP (Luxembourg) 1 S.ar.l.

BRP (Luxembourg) 2 S.ar.l.

BRP (Luxembourg) 3 S.ar.l.

BRP (Luxembourg) 4 S.ar.l.

BRP (Luxembourg) 5 S.ar.l.

BRP Mexico S.A. de C.V.

BRP Australia Pty Ltd.

BRP Japan Ltd.

EX-10.10

Exhibit 10.10

PRIVILEGED AND CONFIDENTIAL

LICENSE AGREEMENT

Dated December 18, 2003

BETWEEN

BOMBARDIER INC.

As Trade-mark Owner

AND

4145321 CANADA INC.

as Licensee

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS	2
ARTICLE 2 GRANT	4
ARTICLE 3 QUALITY STANDARDS	7
ARTICLE 4 MARKING	8
ARTICLE 5 INSPECTION	8
ARTICLE 6 REMEDIES	9
ARTICLE 7 NON-TRANSFERABILITY	9
ARTICLE 8 CONFORMITY TO LAWS	10
ARTICLE 9 INDEMNITY	10
ARTICLE 10 INSURANCE	11
ARTICLE 11 INTELLECTUAL PROPERTY	12
ARTICLE 12 REPRESENTATIONS AND WARRANTIES	13
ARTICLE 13 RIGHT TO DEFEND AND INITIATE LEGAL PROCEEDINGS	14
ARTICLE 14 TERM	15
ARTICLE 15 TERMINATION	15
ARTICLE 16 EFFECTS OF TERMINATION	16
ARTICLE 17 MISCELLANEOUS	17

LICENSE AGREEMENT

This license agreement entered into at Montreal, Quebec on December 18,2003,

BETWEEN:	BOMBARDIER INC., a corporation incorporated under the Laws of Canada, with its registered office at 800 René- Lévesque Blvd. West, Montréal, Quebec, Canada H3B 1Y8,
	(hereinafter referred to as “Trade-mark Owner”)
AND:	4145321 CANADA INC., a corporation incorporated under the Laws of Canada, with its registered office at 800 René-Lévesque Blvd., Montreal, Quebec, Canada H3B 1Y8,
	(hereinafter referred to as “Licensee”)

WHEREAS Trade-mark Owner is the owner of the trade-marks set out in Schedule “A” hereto (hereinafter collectively referred to as the “Trade-mark”);

AND WHEREAS Trade-mark Owner is the owner of the trade names J.A. Bombardier and Bombardier (hereinafter referred to as the Bombardier Name);

AND WHEREAS it is the intention of the parties that Licensee and its Affiliates (as defined herein) be permitted to use the Trade-mark and the Bombardier Name, subject to the conditions and provisions set forth below; and

THIS AGREEMENT WITNESSETH THAT, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties covenant and agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Where used herein, in any schedule hereto or in any amendments hereto or in any communication required or permitted to be given hereunder, the following terms shall have the following meanings, respectively:

1.1.1  “10% Owner” means with respect to any Person, a direct or indirect holder of at least 10% of the outstanding capital stock or voting rights, if a corporation, or the partnership, limited liability company, joint venture or similar interests, if not a corporation, of such Person.

1.1.2  “Affiliates” has the meaning ascribed thereto under the Canada Business Corporations Act, whether a body corporate or a partnership.

1.1.3  “Agreement” means this license agreement, all schedules hereto and all instruments supplemental hereto or in amendment or confirmation hereof;

“herein”, “hereof, “hereto”, “hereunder” and similar expressions mean and refer to this Agreement and not to any particular Article, Section, Subsection or other subdivision; “Article”, “Section”, “Subsection” or other subdivision of this Agreement means and refers to the specified Article, Section, Subsection or other subdivision of this Agreement.

1.1.4  “Bombardier Family” means any one or all of Laurent Beaudoin and Claire Bombardier Beaudoin, Janine Bombardier, J.R. André Bombardier and Huguette Bombardier Fontaine and Jean-Louis Fontaine, and Members of the Immediate Family of each such Person.

1.1.5  “Business Day” means a day (other than a Saturday or Sunday) on which banks are open during normal business hours in Montréal, Canada and Boston, Massachusetts.

1.1.6  “Closing Date” means the date hereof.

1.1.7  “Composite Marks” means the composite marks listed in Schedule “D” hereto.

1.1.8   “Government” means any government, federal, provincial, state or local, whether Canadian or foreign, including any agency, authority, board, body, division, subdivision, audit group or procuring office and the employees or agents thereof.

1.1.9  “Laws” means:

1.1.9.1  all treaties, laws, statutes, codes, ordinances, orders, decrees, rules, regulations and municipal by-laws, whether domestic, foreign or international; and

1.1.9.2  all judgements, orders, writs, directions, injunctions, decisions, rulings, decrees and awards of any Government or court of law,

in each case binding on the Party or Person referred to in the context in which such word is used.

1.1.10  “Members of the Immediate Family” shall mean, with respect to any individual, each spouse or child or other descendants (by birth or adoption) of such individual, each trust created solely for the benefit of one or more of the aforementioned Persons and their spouses and each custodian or guardian of any property of one or more of the aforementioned Persons in his capacity as such custodian or guardian.

1.1.11  “Parties” means Trade-mark Owner and Licensee; and “Party” shall mean either one of them as the context may require.

1.1.12  “Person” means an individual, entity with juridical personality, corporation, company, cooperative, partnership, trust, unincorporated association or Government authority or body, and pronouns which refer to a Person shall have a similarly extended meaning.

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1.1.13  “Purchase Agreement” means the amended and restated Purchase Agreement dated as of December 2, 2003 among Trade-mark Owner and Bombardier Recreational Products Inc.

1.1.14  “Services” means any services related to the renting, maintenance, repair or servicing of the Wares;

1.1.15  “Trade-mark” has the meaning ascribed thereto in the recitals to this Agreement;

1.1.16  “Wares” means any (i) recreational products, including snowmobiles, personal watercrafts, all-terrain vehicles and boats, (ii) outboard engines, (iii) snow-grooming equipment, (iv) multi-purpose tracked vehicles, (v) karts, (vi) engines that power snowmobiles, personal watercrafts, all-terrain vehicles and boats, motorcycles, karts, scooters and light-weight and ultra-light aircrafts and engines for small aircraft of the same type as Rotax 936 engines (the wares referred to in (i), (ii), (iii), (iv), (v) and (vi) are hereinafter, collectively, the “BRP Products”) and (vii) clothing, merchandising items, accessories and parts incorporated in or related to any of the BRP Products.

ARTICLE 2

GRANT

2.1 Trade-mark Grant. Subject to the terms, conditions and other provisions set forth in this Agreement, Trade-mark Owner hereby grants to Licensee and its Affiliates an exclusive, fully-paid, royalty-free, world-wide right to use the Trade-mark in association with the Wares and Services, it being understood, for greater certainty, that Trade-mark Owner retains the exclusive right to use the Trade-mark with all wares and/or services other than the Wares and Services. Licensee acknowledges that Trade-mark Owner has previously granted a non-exclusive license to the Trade-mark for use in connection with certain Wares to the Fondation J. Armand Bombardier on June 5, 2003 (the “Fondation J. Armand Bombardier License”), and that the exclusive grant of rights provided to Licensee in this Agreement is subject to that prior grant of rights. Licensee acknowledges that the Trade-mark is only registered in those countries set out in Schedule A hereto and that Trade-mark Owner makes no representation or warranty as to the availability for registration or registrability of the Trade-mark in any other countries. Licensee has no right to sub-license use of the Trade-mark save and except as expressly permitted hereunder. Licensee shall have the right to permit the use of the Trade-mark by dealers, distributors and manufacturers of the Wares and providers of Services (the “Sublicensees”). Such sub-licenses shall be on terms and conditions at least as protective of the Trade-mark Owner as those currently in place. Moreover, Licensee may add or substitute Sub-licensees, provided such parties perform substantially the same function in the distribution or provision or manufacturing of the Wares and/or the performance of the Services as currently carried out by Sub-licensees, and provided that the new or substitute Sub-licensees are subject to terms and conditions at least as protective of the Trade-mark Owner as those currently in place for Sub-licensees. In addition, Licensee may renew sublicense agreements with current Sub-licensees, provided that such sub-licenses shall contain terms and conditions at least as protective of the Trade-mark Owner as those

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currently in place. Licensee shall notify Licensor upon each renewal or replacement of sublicenses. Licensee shall be entitled to otherwise sublicense use of the Trade-mark with the prior consent of Trade-mark Owner, which consent shall not be unreasonably withheld and which consent or disapproval shall be provided by the Trade-mark Owner within five (5) Business Days of receipt of such request, provided that reasonably adequate supporting documentation has been provided to Trade-mark Owner, with no approval or disapproval so provided being deemed an approval. The Trade-mark Owner shall be entitled to withhold its consent at its sole and absolute discretion should Licensee wish to sub-license use of the Trade-mark to any present or future competitor of Trade-mark Owner. All information relating to the sublicenses and Sublicensees shall be deemed Confidential Information of the Licensee. Licensee also shall be under no obligation to disclose any of its pricing or financial terms with its Sublicensees.

2.2 Bombardier Name Grant. Subject to the terms, conditions and other provisions set forth in this Agreement, (i) until the earlier of (a) the date on which the Bombardier Family shall cease to be a 10% Owner of Licensee; or (b) the date of termination of this Agreement in accordance with Article 15 (the “Termination Date”); and (ii) for a period of nine (9) months following thereafter, Trade-mark Owner hereby grants to Licensee and its Affiliates a non-exclusive (being understood that no other Person except for Trade-Mark Owner’s Affiliates will be granted the right to use the Bombardier Name as part of its corporate name, trade-name or domain name in connection with a business which relates to the Wares or the Services and that no other Person will be granted the right to use the Bombardier Name as part of any name confusingly similar to J.A. Bombardier Inc., Bombardier Recreational Products Inc. or Bombardier Produits Récréatifs Inc.), fully-paid, royalty-free right to use the Bombardier Name as part of: (i) its corporate name J.A. Bombardier (J.A.B.) Inc., Bombardier Recreational Products Inc. or Bombardier Produits Récréatifs Inc. or, in the case of subsidiaries, a corporate name which includes the words “Bombardier Recreational Products” in the English language or in another language; (ii) its trade-name J.A. Bombardier (J.A.B.), Bombardier Recreational Products or Bombardier Produits Récréatifs; and/or (iii) its domain name on the condition that Licensee always uses the Bombardier Name with a recreational product component in its domain names, provided that:

2.2.1  Licensee will use the Bombardier Name in connection with the business related to the Wares and the Services;

2.2.2  Licensee will use the Bombardier Name, where reasonably possible, in a different type font than that currently used by Trade-mark Owner for its corporate name “Bombardier Inc.” and generally in a visually distinct manner from such corporate name. Trade-mark Owner hereby approves the use by Licensee hereunder of the phrase “Bombardier Recreational Products” as shown in Exhibit F;

2.2.3  Licensee will not use any of the sprocket design elements shown in Schedule “Al” or any other design confusingly similar to the sprocket design elements in close proximity to the Bombardier Name on any business documentation (including, without limitation, letterhead, business cards, contracts, invoices, purchase orders, financing documentation), but shall be permitted to use the Bombardier Name on marketing, advertising and promotional material which also

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contains the said sprocket design elements. Trade-Mark Owner hereby approves the use by Licensee hereunder of the design elements and corporate logo shown in Schedule F;

2.2.4  Within no later than nine (9) months from the Termination Date, Licensee agrees to cease use of the Bombardier Name as its trade name, agrees to change its trade name to a trade name which does not include the Bombardier Name, and agrees not to carry on business under the Bombardier Name or any trade name that includes the Bombardier Name;

2.2.5  Licensee agrees that Trade-mark Owner is the exclusive owner of the Bombardier Name and all goodwill associated therewith;

2.2.6  except as provided in this Agreement, Licensee acquires no right, title or interest in or to the Bombardier Name and Licensee shall not represent that it has any ownership interest in or to the Bombardier Name;

2.2.7  Licensee shall not apply to register the Bombardier Name as a trade-mark and Licensee further shall not apply to register any trade-mark that includes or is confusingly similar to the Bombardier Name;

2.2.8  Licensee shall not use any word or symbol which is not the Bombardier Name in association with the Bombardier Name in a manner that would be likely to result in the loss of Trade Name distinctiveness;

2.2.9  Licensee shall not use any of its domain names comprised of the Bombardier Name as trade-marks, other than as expressly permitted under this Agreement; and

2.2.10  Licensee acquires no right to sub-license the use of the Bombardier Name. For avoidance of doubt, Licensee shall not be considered to be sublicensing the use of the Bombardier Name by allowing third parties, such as ad agencies or providers of such goods, to print, use or affix it on advertising, marketing, merchandising, promotional materials and ordinary business documentation on behalf of Licensee.

2.2.11  Licensee shall use commercially reasonable efforts to, within six (6) months following the date hereof, change the corporate name of any of its Affiliates so that they comply with the limitations contained in this Section 2.2.

2.3 The “JAB” and “BRF” Brands. Licensee shall have a right to use as a brand, trade name, trademark or service mark the terms “JAB” and “BRP” and logos in a form similar to or based on those shown in Exhibit E and Exhibit F (excluding for the purposes of this Section 2.3, as to Exhibit F, the phrase “Bombardier Recreational Products”) (such terms and logos collectively, the “Brands”) and register or cause Trade-mark Owner to register on Licensee’s behalf and at Licensee’s costs, the Brands as trade-names and/or trademarks, and Licensee will be the sole and exclusive owner of all rights, title and interests and all the goodwill associated therewith. The Trade-mark Owner shall have no rights of any kind and no liability whatsoever with respect to Brands, it being understood, for

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greater certainty, that Trade-mark Owner makes no representations or warranties of any kind with respect to the Brands, including without limitation, any representations or warranties that the Brands will not infringe any third party’s intellectual property rights.

2.4 No Obligation to Use. For the avoidance of doubt, Licensee may, but is under no obligation to, use the Trade-mark or the Bombardier Name.

2.5 Website Relationship. Trade-mark Owner hereby agrees that for a term of six (6) months from the Closing Date, Trade-mark Owner will cooperate with Licensee and provide prominent links to Licensee’s websites on Trade-mark Owner’s websites.

ARTICLE 3

QUALITY STANDARDS

3.1 Quality Standards and Controls. Licensee covenants and agrees that all Wares or Services it sells or provides under the Trade-mark and/or the Bombardier Name will be at least as high in average quality as the average quality, as of the Closing Date, of similar products or services sold or provided by Trade-mark Owner or its Affiliates under the Trade-mark.

3.2 Quality Control Oversight Committee. Licensee shall report to the Trade-mark Owner’s Quality Control Oversight Committee, which committee is composed of members chosen by Trade-mark Owner (hereinafter called the “Committee”), at each of the Committee’s meetings but no more than four (4) times a year, or at such lesser frequency as may be mutually agreed to between the parties, on the dates to be set by the Trade-mark Owner on notice of not less than thirty (30) days to Licensee. The reports shall include the information set out in Schedule “B” hereto and any other information that Trade-mark Owner may reasonably request from time to time, and such reports are to be provided by Licensee ten (10) days prior to the meeting date specified in the notice, to assist Trade-mark Owner in the monitoring of the Licensee’s conformity and compliance with the quality standards and controls set by Trade-mark Owner pursuant to Section 3.1 hereof. Any reports provided to the Committee are Confidential Information of the Licensee. The first meeting of the Committee will be for coordination purposes only and will be held within sixty (60) days of the Closing Date.

3.3 Distribution Channels. For the avoidance of doubt, it is understood and agreed between the Parties that: (i) Licensee may sell or provide Wares and Services (or cause them to be sold or provided) to and through any type, class or means of wholesale or retail distribution (including on the Internet, successor mediums and other directed or interactive means of sale) and (ii), to the extent consistent with this Agreement, Licensee shall have the right (and the right to authorize others) to distribute and sell excess inventory, end of season merchandise and other similar inventory through channels of distribution appropriate for the disposition and sale of such goods, as to each category of Wares.

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ARTICLE 4

MARKING

4.1 Trade-Mark Marking. When reasonably requested by Trade-mark Owner in writing, Licensee shall use the Trade-mark and the Bombardier Name with appropriate legends as to the ownership of the Trade-mark and the Bombardier Name and as to Licensee’s status as a licensee thereof, as set out in Schedule “C” hereto, which legends may, from time to time, be amended by Trade-mark Owner on reasonable notice to Licensee, and Licensee shall thereafter use the amended legends.

4.2 Advertising. Licensee shall submit once a year to the Committee for information purposes representative samples of advertising and other significant publicity and promotional materials which include the Trade-mark and/or the Bombardier Name. Mock-ups and proposals for advertising and other publicity and promotional uses in relation only to major seasonal campaigns will be submitted to Trade-mark Owner’s General Counsel for approval prior to their use by Licensee. The General Counsel of Trade-mark Owner shall approve or disapprove, such approval not to be unreasonably withheld, all such submissions within five (5) Business Days of receipt of such materials, provided that reasonably adequate supporting documentation has been provided to Trade-mark Owner, no approval or disapproval received within such time period being deemed an approval. Any disapproval must set out in detail reasons for such disapproval so that Licensee may prepare and submit new materials. Any such approval will only be valid to the extent the final advertising, publicity and promotional materials are substantially similar to the mock-ups and proposals submitted to Trade-mark Owner for approval.

4.3 Style Guide. All uses of the Trade-mark by Licensee, including, but not limited to all advertising, publication and other publicity and promotional materials created and used by Licensee, shall be in accordance with Trade-mark Owner’s Graphic Norms and Guidelines and the BRP division guides in place and in force as of the Closing Date, complete copies of which have been provided to Licensee. Trade-mark Owner may, from time-to-time, amend its communication policy, including the Graphic Norms and Guidelines, on reasonable notice to the Licensee, and, to the extent that such amendments apply uniformly to Trade-mark Owner’s business and do not impair the ability of Licensee to use the Trade-mark in association with the Wares and/or Services and are consistent with this Agreement, Licensee shall thereafter use the applicable amended communication policy. Licensee may, from time-to-time, amend the BRP division guides subject to obtaining Trade-mark Owner’s written consent, which shall not be unreasonably withheld, for an amendment dealing with or related to the Trade-mark, and Licensee shall thereafter use the applicable amended BRP division guides.

ARTICLE 5

INSPECTION

5.1 Inspection. Licensee agrees that it will permit Trade-mark Owner or its authorized representative(s) to visit its place(s) of business, once per year during the Term, during normal business hours and after reasonable notice to Licensee in order to allow Trade-mark Owner or its authorized representative(s) to examine and inspect only those areas of Licensee’s premises where the quality control of the Wares and/or Services take

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place or if there is no such quality control facility, where the manufacturing takes place, solely for purposes of determining compliance with Section 3.1 above, it being understood, for greater certainty, that nothing in the foregoing shall be construed as providing Trade-mark Owner with access to Licensee’s R&D facilities, or to other trade secrets. All information obtained during such inspection shall be Confidential Information of the Licensee and may only be used by the Trade-mark Owner for purposes of determining compliance with Section 3.1 above.

ARTICLE 6

REMEDIES

6.1 Remedies. The Parties agree to attempt to resolve any disagreement between them regarding the application of the provisions of Article 3, Article 4 or Article 5, the use of any Trade-mark or the Bombardier Name, or the quality of any Wares or Services with which any mark licensed under this Agreement is used by first referring any such disagreement to the Quality Control Oversight Committee. If the Quality Control Oversight Committee is unable to resolve the disagreement, the Chief Executive Officers of Trade-mark Owner and Licensee shall meet in an attempt to resolve the disagreement. If they are unsuccessful, the disagreement shall be subject to binding arbitration as provided in Article 17.2. The arbitrator shall provide a decision regarding any such disagreement, including a direction as to the Parties’ future conduct regarding the subject of the disagreement if the use that is the subject of the disagreement is to continue, it being understood, for greater certainty, that the arbitrator shall not have the authority to terminate this Agreement, unless Trade-mark Owner terminates this Agreement pursuant to Article 15.1 and a dispute arises between the Parties relating to such termination.

ARTICLE 7

NON-TRANSFERABILITY

7.1 Third Party Assignment. Unless otherwise provided in this Agreement, Licensee may not assign or otherwise dispose of this Agreement, its rights or obligations hereunder or any part thereof, unless:

7.1.1  it obtains the prior written consent of the Trade-mark Owner, which consent may be withheld in Trade-mark Owner’s sole discretion; and

7.1.2  the assignee agrees in writing to respect all of the terms and conditions of this Agreement and Licensee guarantees without the benefits of division and discussion, all of the assignee’s obligations under this Agreement.

7.2 Change of Control. The acquisition of control of Licensee by, or merger of Licensee with, directly or indirectly, any person who is engaged in a business which is in competition with any principal line of business in which Trade-mark Owner is engaged at such time shall constitute an assignment for the purposes of this Agreement. The term “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of Licensee, whether through the ownership of voting stock or other securities, as manager, trustee or similar capacity, by contract or otherwise.

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7.3 Assignment to Affiliates. Notwithstanding the terms of Section 7.1, Licensee may, upon written notice to Trade-mark Owner, assign this Agreement, its rights or obligations hereunder or any part thereof to its Affiliates if such Affiliates agree in writing to respect all of the terms and conditions of the Agreement and Licensee guarantees all of its Affiliates’ obligations under this Agreement.

7.4 Assignment to Bombardier Recreational Products Inc. For avoidance of doubt, Trade-mark Owner hereby consents to the assignment of this Agreement as part of the amalgamation of Licensee with Bombardier Recreational Products Inc. following the acquisition of Licensee by Bombardier Recreational Products Inc.

ARTICLE 8

CONFORMITY TO LAWS

8.1 Conformity to Laws. Licensee undertakes to conform to all Laws which may apply to the use by it of the Trade-mark in association with the Wares and/or Services.

ARTICLE 9

INDEMNITY

9.1 Indemnification by Licensee. Licensee shall during and after the term of this Agreement, indemnify and hold Trade-mark Owner harmless from any and all claims, liabilities, judgments, penalties, losses, costs suits, demands, damages and expenses (including reasonable attorneys’ fees, whether or not litigation is instituted) (“Claims”), suffered or incurred by Trade-mark Owner or for which the Trade-mark Owner shall become liable:

9.1.1  by reason of any material breach, violation or non-performance on the part of Licensee of any term or condition of this Agreement; or

9.1.2  by reason of any act or omission, negligent or otherwise, of Licensee or its subcontractors, agents, manufacturers, distributors, consultants or any of them or by reason of any manufacturing, advertising, sale and distribution of articles and advertising material or resulting from their use by Licensee, its subcontractors, agents, manufacturers, distributors, consultants or any of them or any users; or

9.1.3  arising out of any defects in or failure to perform of any article, alleged or otherwise; or

9.1.4  arising out of any infringement or breach of any other personal or property right of any person by Licensee or anyone directly or indirectly acting by, through or on behalf of or pursuant to a contractual or any other relationship with Licensee in connection with the preparation, manufacture, distribution, provision, retail sale, advertising and/or promotion of the articles (other than any infringement or breach of any other personal or property rights resulting from the fact that Trade- mark Owner did not have the right to consent to, or grant the use of the properties pursuant to this Agreement and, for avoidance of doubt, any infringement by Trade-mark Owner); or

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9.1.5  arising out of or relating directly or indirectly to the website links described in Section 2.5.

Notwithstanding the foregoing or anything to the contrary in this Agreement, Licensee shall not have any obligation whatsoever to any Person with respect to any Claims for which indemnification by the Trade-mark Owner is contemplated under the Purchase Agreement or this Agreement.

9.2 Indemnification by Trade-mark Owner. Trade-mark Owner shall indemnify Licensee and its Affiliates, their respective successors and permitted assigns and their respective directors, officers, agents and employees against and save and hold each and all of them harmless from any and all Claims arising out of (i) any third party allegation that the use or other exploitation of the Trade-mark or the Bombardier Name as permitted by this Agreement or as directed by Trade-mark Owner or its agents infringes or misappropriates any trademark, service mark, trade dress, design or other proprietary right of a third party or (ii) any act or omission, negligent or otherwise, of Trade-mark Owner or its subcontractors, agents, manufacturers, distributors, consultants or any of them.

9.3 Limitation of Liability. Neither Trade-mark Owner nor Licensee (nor any of their respective Affiliates, successors and permitted assigns, or directors, officers, agents, employees or shareholders) shall be liable for incidental, indirect, special, exemplary or consequential loss or damages of any nature, or for lost profits, savings or revenues of any kind under this Agreement, however caused and whether or not the applicable Party has been advised of the possibility of such damages.

9.4 Indemnification Sole Remedy. The provisions of this Article 9 shall constitute the sole remedy of the Parties against each other with respect to those Claims for which indemnification is contemplated under this Agreement, other than Claims based on conduct constituting fraud, fraud-in-the-inducement or intentional misrepresentation.

9.5 Survival. The provisions of this Article 9 and the obligations of Licensee and Trade-mark Owner set forth herein shall survive expiration or other termination of this Agreement.

ARTICLE 10

INSURANCE

10.1 Insurance. Licensee shall procure and maintain at its expense, during the Term and at all times during which Wares bearing the Trade-mark or the Bombardier Name are being sold by Licensee, product liability insurance from a source of insurance with an AM BEST rating of at least A-VII, providing total coverage in an amount equal to at least $200,000,000. Self-insurance of any part of the coverage shall initially be for $1,000,000 ($1,000,000 USD with respect to occurrences in the United States of America). Licensee may increase the amounts of any self-insurance subject to such increase being reasonable and customary based on prevailing market conditions in the reasonable opinion of MARSH or any reputable insurance broker that is a successor of MARSH and Licensee shall notify Trade-mark Owner thereof. Such insurance shall name Trade-mark Owner, its directors, officers, agents, affiliates, subsidiaries and employees as additional insured.

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The territory shall read worldwide and defence not only undertaken if suit brought back to Canada or United States of America. Licensee shall provide a certificate from its insurance source to Trade-mark Owner evidencing the insurance coverage required above and confirming that Trade-mark Owner, its directors, officers, agents, affiliates, subsidiaries and employees as additional insured, within a period of ten (10) days following the execution of this Agreement. Licensee shall, from time to time upon reasonable request by Trade-mark Owner, promptly furnish or cause to be furnished to Trade-mark Owner certificates of insurance (with applicable riders and endorsements) and proof that premium payments are current. All insurance policies shall provide that the insurer shall endeavour to provide thirty (30) days prior written notice to Trade-mark Owner, by registered or certified mail, return receipt requested, before making any substantial or adverse modification to the coverage, or reducing the coverage, or cancelling or terminating the insurance. The product liability policy shall contain a Breach of Warranty clause, if available at no additional cost. The first sentence of this Article 10.1 notwithstanding, Licensee may modify, reduce, cancel or terminate such insurance if (i) Licensee has made a commercially reasonable effort to arrange for similar or better coverage, to the extent available on a commercially reasonable basis in the market at the time, with no lapse in coverage, or (ii) Licensee shall have obtained the prior written consent of Trade-mark Owner, which consent will not be unreasonably withheld.

ARTICLE 11

INTELLECTUAL PROPERTY

11.1 Acknowledgement. Licensee acknowledges that Trade-mark Owner is the exclusive owner of the Trade-mark and the Bombardier Name and agrees not to adopt or use any other trade-mark or trade-name which would be similar to or confusing with the Trade-mark or the Bombardier Name, subject to Section 11.2 hereafter. Licensee also acknowledges that any use of the Trade-mark or the Bombardier Name at any time by it and any rights derived therefrom have and will inure to the exclusive and entire benefit of Trade-mark Owner and Licensee shall not claim any rights or interest in the Trade-mark or the Bombardier Name by way of its use of same at any time, including subsequent to any termination of this Agreement for any reason. Furthermore, subject to Section 11.2 hereafter, Licensee agrees that Licensee shall not use any word or symbol which is not a Trade-mark in association with a Trade-mark in a manner that would be likely to result in the loss of Trade-mark distinctiveness, and that it will not, directly or indirectly, at any time, including subsequent to any termination of this Agreement for any reason, dispute or contest the validity or enforceability of the Trade-mark or the Bombardier Name, nor counsel or procure or assist anyone else to do the same, nor directly or indirectly attempt to depreciate the value of the goodwill attaching to the Trade-mark or the Bombardier Name.

11.2 Composite Marks. Notwithstanding Section 11.1, Licensee shall have one year to cease using any currently existing and used Composite Marks and to make necessary changes to the production line. Notwithstanding Section 11.1, Licensee shall also have the right to sell-off thereafter any existing inventory of Wares bearing Composite Marks.

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11.3 Abandonment. Trade-mark Owner shall notify Licensee if it is considering a plan of action which might lead to ceasing use of any Trade-mark or the Bombardier Name and following receipt of any such notice, Licensee may at its option notify Trade-Mark Owner in writing that Licensee desires to take an assignment of Trade-mark Owner’s right, title and interest in any such mark or name, including any right available at law to sue for any past infringements thereof. Upon receipt of any such notice from Licensee prior to Trade-mark Owner ceasing to use the Trade-mark or the Bombardier Name, for no additional consideration Trade-Mark Owner will promptly execute all documents reasonably required, and take all other actions reasonably necessary, to effectuate any such assignment.

11.4 Filings of New Marks, Filings in New Territories, etc. Subject to the agreement of Trade-mark Owner, such agreement not to be unreasonably withheld, Trade-mark Owner shall, at Licensee’s written request and at Licensee’s cost and expense and within a reasonable delay:

11.4.1  file and prosecute applications to register new trade-marks that Licensee may wish to use that comprise or are similar to the Trade-mark or the Bombardier Name;

11.4.2  apply for the registration in the name of Trade-mark Owner of the Trade-mark in any jurisdiction where the Trade-mark is not yet registered;

11.4.3  renew registrations for the Trade-mark, in the name of Trade-mark Owner, in jurisdictions that are of interest to Licensee, should Trade-mark Owner not otherwise be interested in renewing such registrations; and

11.4.4  execute all documents or forms reasonably required to confirm the license or licenses granted under this agreement or to record Licensee as a registered user in any jurisdiction.

Except as set forth above, Trade-mark Owner will maintain and renew all of its existing and future Trade-mark and Bombardier Name applications and registrations at its own expense.

ARTICLE 12

REPRESENTATIONS AND WARRANTIES

12.1 Representations and Warranties by the Licensee. Licensee hereby represents and warrants to Trade-Mark Owner as follows:

12.1.1  Licensee has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder. This Agreement has been duly and validly executed by Licensee and constitutes a valid and binding agreement of Licensee, enforceable against Licensee in accordance with its terms, subject, however, to such limitations with respect to enforcement as are generally imposed by Law on creditors, in particular in connection with bankruptcy or similar proceedings, and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the competent court.

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12.1.2  Licensee is a business duly organized, validly existing and in good standing under the Laws of Canada and has all requisite power and authority to carry on its business as it is currently conducted and as contemplated by this Agreement.

12.2 Representations and Warranties by the Trade-mark Owner. Trade-mark Owner hereby represents and warrants to Licensee as follows:

12.2.1  Trade-mark Owner has full power and authority to enter into this agreement and to perform its obligations hereunder. This Agreement has been duly and validly executed by Trade-mark Owner and constitutes a valid and binding agreement of Trade-mark Owner, enforceable against Trade-mark Owner in accordance with its terms, subject, however, to such limitations with respect to enforcement as are generally imposed by Law on creditors, in particular in connection with bankruptcy or similar proceedings, and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the competent court.

12.2.2  Trade-mark Owner is a business duly organized, validly existing and in good standing under the Laws of Canada and has all requisite power and authority to carry on its business as it is currently conducted and as contemplated by this Agreement.

12.2.3  Trade-mark Owner is not a party to or bound by any contract or any other obligation whatsoever that limits or impairs its ability to enter into this Agreement, other than the Fondation J. Armand Bombardier License. Except for the Fondation J. Armand Bombardier License, Trade-mark Owner has not done or omitted to do and shall not do or omit to do any act or thing by license, grant or otherwise, which shall or may impair or encumber any of the rights herein granted to Licensee or that would interfere with the full enjoyment by Licensee of such rights.

ARTICLE 13

RIGHT TO DEFEND AND INITIATE LEGAL PROCEEDINGS

13.1 Notification. Each of Trade-mark Owner and Licensee shall promptly notify the other of any third party that may or does infringe or misappropriate the Trade-mark or the Bombardier Name or of any legal or administrative proceedings initiated by third parties relating to the Trade-mark and/or the Bombardier Name.

13.2 Trade-mark Owner’s Right. Notwithstanding any provisions of the Canadian Trade-marks Act but subject to the terms of this Agreement, Licensee recognizes Trade-mark Owner’s exclusive and discretionary right to defend against all legal or administrative proceedings initiated by third parties and to initiate and maintain legal or administrative proceedings against third parties relative to the protection and defence of the Trade-mark and/or the Bombardier Name, including the settlement of any dispute with third parties relating to the Trade-mark or the Bombardier Name.

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13.3 Licensee Cooperation. In any legal or administrative proceedings relating to the Trade-mark and/or the Bombardier Name, Licensee shall cooperate with Trade-mark Owner at Trade-mark Owner’s expense and, at the latter’s reasonable request, shall provide information to Trade-mark Owner to be used in such legal or administrative proceedings, provided that in the case of confidential information of Licensee, Trade-mark Owner and Licensee will take all reasonable steps to maintain the confidentiality of this information as regards third parties. Furthermore, Licensee shall provide all other reasonable cooperation to Trade-mark Owner at Trade-mark Owner’s expense so as to protect and maintain the validity and enforceability of the Trade-mark and the Bombardier Name.

13.4 Licensee. Trade-mark Owner shall notify Licensee that it desires to defend against or settle a legal or administrative proceedings brought by third parties relating to Trade mark and/or the Bombardier Name within fourteen (14) Business Days of its own notice to Licensee pursuant to Section 13.1 or of receipt of such notification from Licensee pursuant to Section 13.1. If Trade-mark Owner fails to do so, Licensee may assume the defense and settlement of such trade-mark infringement allegations by third parties, provided that Trade-mark Owner shall be entitled to participate in the defense and settlement of such legal or administrative proceeding at a later date if it so wishes. Trade-mark Owner will cooperate with and provide requested information to Licensee in any such proceeding at Licensee’s expense. Licensee shall be entitled to retain the entire amount of any recovery or settlement it obtains in such proceedings.

ARTICLE 14

TERM

14.1 Term. Subject to termination in accordance with the provisions of Article 15 hereof, this Agreement will be in full force and effect for an initial period commencing on the Closing Date and expiring on December 31, 2008, and will thereafter automatically renew for consecutive five (5) year terms unless terminated in accordance with the provisions of Article 15 hereof (the “Term”).

ARTICLE 15

TERMINATION

15.1 Termination Upon Default. Trade-mark Owner may terminate this Agreement in the event that Licensee has materially failed to perform or observe or comply with any of the material provisions hereof or any arbitration order or direction as provided for herein (each, a “Default”) with effect, subject to Article 15.2 below, as of the date of termination mentioned in a written notice of default given by Trade-mark Owner to Licensee, unless the alleged failure to perform or observe or comply with any of the material provisions hereof is contested in good faith by Licensee . Such date of termination is to be, subject to Article 15.2, not less than ninety (90) days subsequent to the giving of such notice, provided that Licensee may at its option, subject to Articles 15.2 below, remedy its default within the said delay, in which case, this Agreement shall continue in full force and effect as if such default had not occurred.

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15.2 Termination Upon Bankruptcy. If Licensee is adjudicated or declared bankrupt or makes a voluntary assignment for the benefit of its creditors or if a petition in bankruptcy is filed against Licensee or Licensee becomes insolvent or makes an arrangement pursuant to any bankruptcy law, or if Licensee discontinues its business or if a receiver is appointed for Licensee, this Agreement and the rights hereby granted shall automatically terminate forthwith without any notice whatsoever being necessary. In the event this Agreement and the rights granted herein are so terminated, Licensee, its receivers, representatives, trustees, agents, administrators, successors and/or assigns, shall have no right to sell, exploit or in any way deal with or in any of the wares or services covered by this Agreement or use any tags, labels, cartons, containers, packaging or wrapping materials, advertising, promotional or display materials pertaining thereto except with and under the special consent and instructions in writing of Trade-mark Owner, which such persons shall be obligated to follow.

15.3 Termination for Non-Transferability Default. Notwithstanding any other provision of this Agreement, failure to comply with the terms of Article 7.2 will result in Trade-mark Owner’s absolute discretion to terminate this Agreement on notice with immediate effect, with no right to remedy the breach on the part of Licensee.

ARTICLE 16

EFFECTS OF TERMINATION

16.1 Undertaking. Subject to the terms of Article 11.3 and this Article 16, if and when the term of this Agreement expires or this Agreement is terminated for any reason, Licensee agrees and undertakes to cease and desist from all uses of the Trade-mark and the Bombardier Name and further agrees and undertakes that it will at no time adopt or use any trade-mark, trade-name, corporate name or domain name incorporating, or confusingly similar to, or likely to be confusing with, the Trade-mark or the Bombardier Name in whole or in part.

16.2 Actions Upon Termination. Upon the expiry or termination of the rights granted hereunder:

16.2.1  Licensee shall, within three (3) years thereof, in the case of all-terrain vehicles and one (1) year thereof for all other wares comprised in the definition of Wares, remove and discontinue the use of all signs, stationary, advertising and other material that would make it appear to the public that Licensee is still in any way associated with Trade-mark Owner; and

16.2.2  Licensee further agrees that Trade-mark Owner has the right to notify any persons it deems necessary or appropriate of the termination of the rights granted hereunder.

16.3 Manufacturing. With respect to the manufacturing of the Wares bearing the Trade-mark or the Bombardier Name, if and when the term of this Agreement expires or this Agreement is terminated for any reason, it is understood that necessary changes to the production line will be required in order to remove the Trade-mark and/or the Bombardier Name from various Wares and parts thereof produced. It is agreed that

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should the Agreement be terminated before the expiry of the term, there shall be a phase-out period not longer than (i) three (3) years, in the case of all-terrain vehicles; and (ii) one (1) year for all other wares comprised in the definition of Wares, for such purpose.

16.4 Stock. With respect to Wares bearing the Trade-mark already manufactured, should the Agreement be terminated before expiry of the Term, Licensee shall have a phase-out period not longer than: (i) three (3) years, in the case of all-terrain vehicles; and (ii) one (1) year for all other wares comprised in the definition of Wares, to use up its stock of such wares in existence at the date of termination.

16.5 Sub-licensees. Licensee agrees and undertakes to notify Sub-licensees of the expiry of the term or the termination of this Agreement, as applicable, and to advise such Sub-licensees that they must immediately cease their use of the Trade-mark upon receipt of such notice with respect thereof.

ARTICLE 17

MISCELLANEOUS

17.1 Confidentiality.

17.1.1  Each of the Parties acknowledges that during the course of their performance under this Agreement, each Party may learn Confidential Information (defined below). Each of the Parties agrees to take reasonable steps to protect such Confidential Information and further agrees not to: (i) use such Confidential Information except as expressly provided in this Agreement; (ii) in the case of the Trade-mark Owner, request or use Licensee’s Confidential Information for any purposes except to determine compliance with this Agreement; (iii) allow any access to Confidential Information provided by the other party except to those authorized and with a need to know as expressly provided in this Agreement; (iv) disclose such Confidential Information to a third party; or (v) allow a third party access to such Confidential Information (except as may otherwise be required by Law) without, in each case, obtaining the prior written approval of the other party.

17.1.2  The restrictions set forth in Article 17.1.1 shall not apply to Confidential Information which (i) a Party has requested be subject to a confidentiality order but nonetheless is required to be revealed to an adjudicating body in the course of litigation or (ii) is required to be disclosed in order to comply with any applicable Laws, but only to the extent required by such Law; provided, however, that, in the case of the application of clauses (i) or (ii), the Party revealing or disclosing Confidential Information shall provide prior written notice of such disclosure to the other Party to this Agreement sufficiently in advance of such disclosure to allow the other Party to respond and to take reasonable and lawful action to avoid and/or minimize the degree of such revelation or disclosure.

17.1.3  All Confidential Information is, and shall remain, the property of the Party which supplied it. Each of the Parties shall take reasonable steps to mark its Confidential Information with appropriate legends, provided, however, that the

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failure so to mark such Confidential Information shall not relieve the other party of its obligations hereunder.

17.1.4  For the purposes of this Agreement, “Confidential Information” means any and all information that is maintained in confidence, is subject to reasonable steps to maintain its confidential status, and the confidential status of which is a benefit to the owning party. Confidential Information shall also include non-public information relating to intellectual property and to business plans, financial matters, products, services, manufacturing processes and methods, costs, sources of supply, distributing arrangements, strategic marketing plans, customer lists, sales, profits, pricing methods, personnel and business relationships. Confidential Information shall not include any information that: (i) was already known to the receiving party, as established by the receiving party’s written records; (ii) becomes generally available to the public other than as a result of the receiving party’s breach of this Agreement; (iii) is furnished to the receiving party by a third party who is lawfully in possession of, and who lawfully conveys, such information; or (iv) is subsequently developed by the receiving party independently of the information received from the disclosing party, as established by the receiving party’s written records. For purposes of this definition, the phrase “receiving party” shall be deemed to include each Affiliate of the receiving party.

17.1.5  Except as required by order of a court or Government of competent jurisdiction, this Agreement and its provisions shall be considered Confidential Information.

17.1.6  Notwithstanding the foregoing, the Parties may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Parties relating to such tax treatment and tax structure, all as contemplated by section 1.6011- 4(b)(3)(iii) of the regulations promulgated under the Internal Revenue Code of 1986, as amended.

17.2 Dispute Resolution.

17.2.1  Notice; Negotiation. Any dispute, disagreement, controversy or claim arising out of or in connection with this Agreement, including any question regarding their negotiation, existence, validity, interpretation, performance, breach or termination, which cannot be resolved by the Parties within fourteen (14) days of receipt of a notice of dispute, shall be referred to the Chief Executive Officers (CEOs) of the Parties who shall meet at a mutually agreed time and place, within thirty (30) days of receipt of said notice of dispute, to attempt to resolve such dispute, disagreement, controversy or claim within such thirty (30) day period, subject to obtaining any necessary corporate approvals of such resolution.

17.2.2  Arbitration. Any dispute, difference, disagreement, controversy or claim arising out of or in connection with this Agreement not resolved pursuant to the process contemplated by Section 17.2.1 (“Dispute”) including any question regarding their existence, negotiation, interpretation, application, performance, breach,

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validity or termination, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules”) by three (3) arbitrators. The arbitration process shall commence at the expiration of the thirty (30) day period contemplated by Section 17.2.1, unless the Parties otherwise agree. On or prior to the expiration of such thirty (30) day period, each Party shall nominate one arbitrator. The two (2) arbitrators so nominated shall appoint the presiding arbitrator. If either Party fails to nominate an arbitrator within thirty (30) days of receiving notice of the appointment of an arbitrator by the other Party, such arbitrator shall be appointed by the ICC International Court of Arbitration (“ICC Court”). If the two (2) arbitrators nominated by the Parties fail to agree upon a third arbitrator within thirty (30) days of the appointment of the second arbitrator, the presiding arbitrator shall be appointed by the ICC Court.

17.2.2.1  Sole Arbitrator. Notwithstanding Section 17.2.2, where the amount in Dispute is less than five million dollars ($5,000,000) exclusive of interest and costs, the Dispute shall be finally settled under the ICC Rules by a sole arbitrator appointed in accordance with such Rules.

17.2.2.2  Place and Language of Arbitration. The arbitration shall take place in Montéal, Québec. The language of the arbitration shall be English.

17.2.2.3  Hearing; Award. The hearing on the merits shall take place within one hundred and twenty (120) days of the appointment of either the sole arbitrator or the last of the three arbitrators, as the case may be. The arbitration award shall be in writing, shall set forth in reasonable detail the basis for the decision and shall be rendered within thirty (30) days of the end of the hearing where there is a sole arbitrator, and within sixty (60) days of the end of the hearing where there are three arbitrators.

17.2.2.4  Costs of the Arbitration. The final arbitration award shall include a decision as to which of the Parties shall bear the costs of the arbitration, or in what manner or proportion the Parties shall bear such costs, including the fees and expenses of the arbitrator(s) and any expert appointed by the arbitrator(s) as well as the reasonable legal and other costs incurred by the Parties for the arbitration.

17.2.2.5  Provisional Measures. For the purposes of any provisional or interim measure in aid of the arbitration proceedings, the Parties hereby submit to the non-exclusive jurisdiction of the competent court in the judicial district of Montréal, Québec. Without prejudice to such provisional or interim remedies in aid of arbitration as may be available under the jurisdiction of a competent court, the arbitrator(s) shall have full authority to grant provisional or interim remedies and to award damages for the failure of a Party to respect any order of the arbitrator(s) to that effect.

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17.3 Notices. Any notice, consent, authorization, direction or other communication required or permitted to be given hereunder shall be in writing and shall be delivered either by personal delivery, by registered mail or by telecopier or similar telecommunications device and addressed as follows:

17.3.1  in the case of Trade-mark Owner, to it at:

Bombardier 800	René-Lévesque		Blvd.		Inc. W.
Montreal, H3B 1Y8					Quebec
Attention:	Daniel Desjardins, Senior Vice-President and General Counsel
Telecopier:	(514) 861-2746
with a copy to:
Ogilvy 1981	McGill	College	Avenue,	Suite	Renault 1100
Montreal, H3A 3C1					Quebec
Attention:	Paul Raymond and Clemens Mayr
Telecopier:	(514)286-5474

17.3.2  in the case of Licensee, to it at:

c/o Beaudier Inc.

1000 de la Gauchetière West, Suite 4310

Montreal, Quebec

H3B 4W5

Attention:	Jacques Levesque
Telecopier:	(514) 861-0032
with a copy to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Attention: R. Newcomb Stillwell and Howard S. Glazer

Telecopier: (617) 951-7050

and to:

Osler, Hoskin & Harcourt LLP

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1000 de La Gauchètiere Street West

Suite 2100

Montréal, Quebec H3B 4W5

Attention: Brian M. Levitt and Warren M. Katz

Telecopier: (514) 904-8101

Any notice, consent, authorization, direction or other communication delivered as aforesaid shall be deemed to have been effectively delivered and received, if sent by telecopier on the day of receipt as stipulated on the acknowledgement of receipt (confirmation of receipt by confirmed facsimile transmission being deemed receipt or in any other manner), if delivered, to have been delivered and received on the date of such delivery or, if sent by registered mail with acknowledgement of receipt requested, to have been delivered and received on the day of receipt as stipulated on the acknowledgement of receipt. Either Party may change its address for service by notice delivered as aforesaid.

17.4  Governing Law. This Agreement shall be governed by, and any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its negotiation, existence, validity, interpretation, performance, breach or termination, shall be resolved in accordance with the Laws of the Province of Quebec and the Laws of Canada applicable therein and shall be treated, in all respects, as a Quebec contract.

17.5  Further Assurance. Each Party upon the request of the other, whether at or after the Closing Date, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably necessary or desirable to effect complete consummation of the transactions contemplated by this Agreement.

17.6  Counterparts. This Agreement may be executed in two counterparts, each of which when so executed shall be deemed an original, and such counterparts together shall constitute one and the same instrument.

17.7  Severability. Any Article, Section, Subsection or other subdivision of this Agreement or any other provision of this Agreement which is, or becomes, illegal, invalid or unenforceable in any situation in any jurisdiction shall be not affect or impair the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision of this Agreement would, under applicable law, be invalid or unenforceable in any respect, each party hereto intends that such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.

17.8  Entire Agreement. This Agreement, including, without limitation, the schedules together with the Purchase Agreement, constitutes the entire agreement between the

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Parties pertaining to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations, drafts and discussions of the Parties.

17.9  Successors in Interest. This Agreement and the provisions hereof shall ensure to the benefit of and be binding upon the Parties and their respective successors and assigns. The Licensee may assign this Agreement and all its rights and obligations hereunder as collateral security to any provider of debt financing.

17.10  Incorporation of Schedules. The schedules attached to this Agreement shall, for all purposes of this Agreement, form an integral part of it.

17.11  Amendment. No amendment shall be binding unless expressly provided in a written instrument duly executed by the Parties.

17.12  Waiver. No waiver, whether by conduct or otherwise, of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provisions (whether or not similar) nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in an instrument duly executed by the Parties to be bound thereby.

17.13  Headings. The headings in this Agreement are inserted for convenience of reference only and shall not affect the interpretation hereof.

17.14  Time Periods. Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and at the place first above-mentioned.

BOMBARDIER INC.
Per:	/s/ Illegible
Name:
Title:
Per:	/s/ Illegible
Name:
Title:
4145321 CANADA INC.
Per:	/s/ Illegible
Name:
Title:
Per:	/s/ Illegible
Name:
Title:

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SCHEDULE “A-1”

LIST OF TRADE-MARKS

• BOMBARDIER

• CHALLENGER

• BOMBI

• [GRAPHIC]

• BOMBARDIERDIRECT

SCHEDULE “A-2”

DETAILS REGARDING REGISTRATIONS/APPLICATIONS FOR REGISTRATION

WITH RESPECT TO THE TRADE-MARKS

		The BOMBARDIER trademark
[GRAPHIC]	[GRAPHIC]	Sprocket 2	Sprocket 3
	[GRAPHIC]	Sprocket 2 (Thal)

Jurisdiction	Trademark	Design	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Argentina	BOMBARDIER		7	Registered	23-ju__-91	30-ju__-93	1808781	1455832
Argentina	BOMBARDIER		9	Registered	23-ju__-91	30-ju__-93	1808762	1455833
Argentina	BOMBARDIER		12	Registered	30-nov-8_	30-nov-89	1698745	1779030
Argentina	BOMBARDIER		39	Registered	23-ju__-91	30-ju__-93	1808754	1455834
Australia	BOMBARDIER		12, 25, 28, 37, 39	Filed	13-févr-03		943_22
Australia	BOMBARDIER		12	Registered	12-nov-93	12-nov-91	567075	A587075
Australia	BOMBARDIER & Design	Sprocket 2	12	Registered	11-ao__-93	11-ao__-93	_09130	A609130
Austria	BOMBARDIER & Design	Sprocket 2	12	Registered	29-nov-91	29-ma_-92	AM5888/ 91	142177
Benelux	BOMBARDIER & Design	Sprocket 2	12	Registered	25-juin-91	25-juin-91	785898	502470
Brazil	BOMBARDIER		3_	Filed	28-févr-03		82534574 0
Brazil	BOMBARDIER		7.35, 7._0	Registered	5-oct-90	31-oct-95	81580_18 2	81580918 2
Brazil	BOMBARDIER		7.10, 7.35, 7.60	Registered	21-oct-91	24-juin-97	81645__4 4	81_45884 4
Brazil	BOMBARDIER		28.20	Registered	5-oct-90	2_-juin-93	81580918 6	81580916 6
Brazil	BOMBARDIER		25.20	Registered	5-oct-90	17-nov-92	81580917 4	81580917 4
Brazil	BOMBARDIER		37	Filed	27-févr-03		82534474 3

Jurisdiction	Trademark	Design	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Canada	BOMBARDIER		Wares	Registered	20-jan_-72	29-déc-72	349628	187538
Canada	BOMBARDIER		Wares	Registered	30-ma_-69	5-ju__-70	322875	1_9578
Canada	BOMBARDIER		Wares	Registered	17-ju__-42	17-ju__-42	1_1350	170_3
Canada	BOMBARDIER		Wares	Registered	5-ju_-69	9-janv-70	323958	1_7310
Canada	BOMBARDIER & Design	Sprocket 2	Wares	Registered	5-sept-91	30-av_-93	888853	411779
Canada	BOMBARDIER & Design	Sprocket 1	Wares	Registered	24-mars-69	24-déc-69	320950	167048
Canada	BOMBARDIER & Design	Sprocket 2	Wares	Registered	9-nov-93	31-mars-95	741106	441491
Canada	BOMBARDIER & Design	Sprocket 1	Wares	Registered	22-janv-69	31-oct-__	319174	1_5978
Canada	BOMBARDIER & Design	Sprocket 1	Wares	Registered	9-ma_-69	23-___-70	322252	1_881_
Canada	BOMBARDIER & Design	Sprocket 1	Wares	Registered	11-ao_t-72	2_-ma_-73	35_075	191285
Chile	BOMBARDIER		25	Registered	4-ma_-92	15-oct-92	206955	651550
Chile	BOMBARDIER		EI	Registered	1-ju__-92	28-juin-95	212756	447397
Chile	BOMBARDIER		37	Registered	1-ju__-92	4-déc-92	212755	854759
Chile	BOMBARDIER		7, 9, 12	Registered	27-nov-91	20-ju__-94	193839	428972
Chile	BOMBARDIER		EC	Registered	1-ju__-92	28-juin-95	212757	447396
China P.R.	BOMBARDIER		3_	Filed	18-févr-03		34_0520
China P.R.	BOMBARDIER		37	Filed	18-févr-03		3460522
China P.R.	BOMBARDIER		28	Filed	18-févr-03		3460521
China P.R.	BOMBARDIER		41	Registered	30-_o__-0_	21-mars-03	20011601 6_	1984042
China P.R.	BOMBARDIER		12	Registered	20-ao_t-98	28-mars-00	98000951 _7	1379_08
China P.R.	BOMBARDIER & Design	Sprocket 3	25	Registered	25-oct-00	28-déc-01	20001638 70	1___102
China P.R.	BOMBARDIER & Design	Sprocket 3	12	Registered	25-oct-00	14-ju__-02	20001638 69	1807181
Colombia	BOMBARDIER		7	Registered	30-janv-92	17-nov-93	354477	143_99
Colombia	BOMBARDIER		12	Registered	30-janv-92	23-déc-93	354476	150768
Costa Rica	BOMBARDIER & Design	Sprocket 2	12	Registered	25-ao__-94	29-sept-95		_3266

-2-

Jurisdiction	Trademark	Design	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Ecuador	BOMBARDIER		12	Registered	13-févr-03	4-juln-03	131294	23465
European Union	BOMBARDIER		4, 7, _, 12, 25, 28, 35, 36, 37, 39, 41, 42	Filed	17-déc-20		2980084
European Union	BOMBARDIER & Design	Sprocket 3	4, 7, 9, 12, 25, 28, 35, 36, 37, 39, 41, 42	Filed	13-févr-03		3051836
Finland	BOMBARDIER & Design	Sprocket 2	12	Registered	10-nov-93	6-févr-95	5094/93	136215
France	BOMBARDIER		12, 25	Registered	10-jul_-98	10-jul_-98	98741463	98741463
France	BOMBARDIER & Design	Sprocket 2	12	Registered	25-nov-91	25-nov-91	320875	1707817
Germany	BOMBARDIER & Design	Sprocket 2	12	Registered	20-déc-91	20-déc-91	B944B0/12WZ	2033704
Guatemala	BOMBARDIER		25	Registered	10-juln-98	13-janv-00	4400-98	102090
Guatemala	BOMBARDIER		12	Filed	10-juln-98		4402-98
Hong Kong	BOMBARDIER		37	Filed	13-févr-03		2215/2003
Hong Kong	BOMBARDIER		28	Filed	13-févr-03		2214/2003
Hong Kong	BOMBARDIER		25	Filed	13-févr-03		2274/2003
Hong Kong	BOMBARDIER		12	Registered	7-janv-92	7-janv-92	130/92	3342/95
Hong Kong	BOMBARDIER		39	Filed	13-févr-03		2216/2003
Iceland	BOMBARDIER		12	Filed	13-févr-03		329/2003
India	BOMBARDIER		12	Filed	21-févr-03		1177307
India	BOMBARDIER		25	Filed	21-févr-03		1177308
Indonesia	BOMBARDIER		39	Filed	7-mars-03		J00 2003.051 70.05225
Indonesia	BOMBARDIER		37	Filed	7-mars-03		J00 2003.051 71.05228
Indonesia	BOMBARDIER		12	Filed	7-mars-03		J00 2003.051 69.05224
Indonesia	BOMBARDIER		25	Filed	7-mars-03		J00 2003.051 74.0522__
Iran	BOMBARDIER		12	Filed	18-févr-03		8111933
Israel	BOMBARDIER		12	Filed	13-févr-03		1_2758
Israel	BOMBARDIER		39	Filed	13-févr-03		1_2761
Israel	BOMBARDIER		25	Filed	13-févr-03		162759

- 3 -

Jurisdiction	Trademark	Design	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Israel	BOMBARDIER		37	Filed	13-févr-03		162760
Japan	BOMBARDIER		12	Registered	29-janv-93	2_-mars-96	8533/93	3138247
Japan	BOMBARDIER		25	Registered	29-janv-93	26-déc-95	8534/93	3107478
Japan	BOMBARDIER		12, 28, 37, 39	Filed	13-févr-03		10825/2003
Japan	BOMBARDIER & Design	Sprocket 2	12	Registered	14-déc-93	25-avr-97	H__ 5- 125198	3294288
Latvia	BOMBARDIER & Design	Sprocket 2	12	Registered	4-mars-98	4-mars-98	M98420	M43837
Liechtenstein	BOMBARDIER		12	Registered	13-févr-03	13-févr-03	12796	12796
Malaysia	BOMBARDIER		12	Filed	14-févr-03		2003- 01713
Mexico	BOMBARDIER		37	Filed	17-févr-03		588527
Mexico	BOMBARDIER		25	Filed	17-févr-03		588526
Mexico	BOMBARDIER		39	Filed	17-févr-03		588528
Mexico	BOMBARDIER		28	Filed	17-févr-03		588528
Mexico	BOMBARDIER & Design	Sprocket 2	12	Registered	9-déc-93	9-déc-93	185471	460721
Monaco	BOMBARDIER		12, 25	Registered	7-mars-03	7-mars-03	23932	03.23545
New Zealand	BOMBARDIER		39	Filed	14-févr-03		_73498
New Zealand	BOMBARDIER		12	Registered	29-sept-00	29-sept-00	624291	624291
New Zealand	BOMBARDIER		25	Filed	14-févr-03		673499
New Zealand	BOMBARDIER		37	Filed	14-févr-03		673497
Norway	BOMBARDIER		25, 28, 37, 39	Filed	13-févr-03		2003 01380
Norway	BOMBARDIER		12	Registered	17-mars-98	21-janv-99	19980236 6	195431
Paraguay	BOMBARDIER		12	Registered	22-____-91	7-févr-92	11281	246338
Paraguay	BOMBARDIER		_	Registered	22-____-91	7-févr-92	11280	246335
Paraguay	BOMBARDIER		7	Registered	22-____-91	7-févr-92	11263	246397
Peru	BOMBARDIER		12	Registered	27-ma_-88	7-oct-88	139498	76951
Philippines	BOMBARDIER & Design	Sprocket 2	12	Registered	2_-janv-94	2-avr-97	90884	54238

- 4 -

Jurisdiction	Trademark	Design	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Romania	BOMBARDIER		12, 25 37, 39	Filed	14-févr-03		M2DD307 44
Russian Federation	BOMBARDIER		4, 7, 8, 12, 25, 28, 35, 36, 37, 39, 41, 42	Filed	1-nov-02		2DD27256 30
Russian Federation	BOMBARDIER		12, 25	Registered	13-avr-_3	13-avr-93	93015251	123677
Russian Federation	BOMBARDIER & Design	Sprocket 3	12, 25	Registered	13-avr-93	13-avr-93	93015253	125103
Russian Federation	BOMBARDIER (In Cyrillic)		12, 25	Registered	13-avr-93	13-avr-93	9301525D	125285
Saudi Arabia	BOMBARDIER		12	Registered	24-janv-9_	24-janv-9_	47538	490/18
Saudi Arabia	BOMBARDIER		37	Filed	17-févr-03		_1219
Saudi Arabia	BOMBARDIER		39	Filed	17-févr-03		_1220
Saudi Arabia	BOMBARDIER		25	Filed	17-févr-03		_1218
Singapore	BOMBARDIER		39	Filed	13-févr-03		T03/01_1 2B
Singapore	BOMBARDIER		37	Registered	13-févr-03	13-févr-03	T03/0191 1D	T03/_181 1D
Singapore	BOMBARDIER		25	Filed	13-févr-03		T03/0191 0F
Singapore	BOMBARDIER		12	Registered	5-déc-94	5-déc-94	10509/94	1050_/94
Singapore	BOMBARDIER		12	Registered	20-janv-95	20-janv-95	495/95	495/95
South Africa	BOMBARDIER		37	Filed	13-févr-03		2003/027 14
South Africa	BOMBARDIER		39	Filed	13-févr-03		2003/027 15
South Africa	BOMBARDIER		12	Filed	13-févr-03		2003/027 13
South Korea	BOMBARDIER		25, 37	Filed	14-févr-03		45-2003- 494
South Korea	BOMBARDIER		12	Registered	12-mars-90	30-Jul_-91	90-4983	217_98
South Korea	BOMBARDIER & Design	Sprocket 2	37	Registered		17-ma_-95	93-41702	313593
Spain	BOMBARDIER		12	Registered	1-févr-02	1-févr-02	2452591	2452591
Spain	BOMBARDIER		39	Registered	1-févr-02	1-févr-02	2452593	2452593
Spain	BOMBARDIER		25	Registered	1-févr-02	1-févr-02	2452592	2452592
Switzerland	BOMBARDIER		12, 25, 28, 37, 39	Registered	13-févr-03	13-févr-03	942/2003	512408
Taiwan	BOMBARDIER		37	Filed	14-févr-03		09200840 5

- 5 -

Jurisdiction	Trademark	Design	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Taiwan	BOMBARDIER		25	Filed	14-fèvr-03		09200840 3
Taiwan	BOMBARDIER		39	Filed	14-fèvr-03		09200840 6
Taiwan	BOMBARDIER		28	Filed	14-fèvr-03		09200840 4
Taiwan	BOMBARDIER		25	Registered	_-__pt-9_	16-juil-97	8544928	7_8803
Taiwan	BOMBARDIER		12	Registered	19-juln-96	1-juil-97	8530333	7__007
Taiwan	BOMBARDIER & Design	Sprocket 2	12	Registered	19-juln-98	1-juil-97	8530334	766034
Taiwan	BOMBARDIER (in Chinese)		12	Registered	15-juil-96	16-___-97	8535004	771971
Thailand	BOMBARDIER & Design	Sprocket 2	12	Registered	11-juil-97	11-juil-97	33_051	Kor 84600
Thailand	BOMBARDIER (in Thai) & Design	Sprocket 2 (Thai)	12	Registered	18-juil-97	18-juil-97	339208	Kor 81700
Turkey	BOMBARDIER		12	Filed	21-fèvr-03		2003/035 34
Ukraine	BOMBARDIER		12, 25, 2_, 37	Filed	14-fèvr-03		20030214 03
United Arab Emirates	BOMBARDIER		12	Filed	30-mars-03		52419
United Kingdom	BOMBARDIER & Design	Sprocket 2	12	Registered	25-juin-91	25-ju__-91	1483921	1483921
United States	BOMBARDIER		9, 25, 28	Registered	23-mars-98	19-dèc-00	75454944	241340_
United States	BOMBARDIER		12	Registered	30-ma_-72	11-sept-73	72425861	968022
United States	BOMBARDIER		12	Registered	28-juil-69	1-___-72	72333664	0939566
United States	BOMBARDIER & Design	Sprocket 3	12	Registered	25-janv-94	21-nov-95	74483006	193_417
Uruguay	BOMBARDIER		7, 9, 12, 39	Registered	28-___-91	5-juil-9_	246_57	246957
Venezuela	BOMBARDIER		12	Registered	10-mars-92	7-oct-94	92-04_04	169376
Venezuela	BOMBARDIER		12	Filed	14-fèvr-03		1431- 2003
Vietnam	BOMBARDIER & Design	Sprocket 3	12	Registered	19-mars-93	19-mars-93	115_3	10809

- 6 -

The CHALLENGER trademark

Jurisdiction	Trademark	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Canada	CHALLENGER	W	Registered	23-___-_5	30-_uil-97	790868	47_271
Germany	CHALLENGER	12	Registered	4-mars-80	4-mars-80	C29183/12WZ	1011454
New Zealand	CHALLENGER	12	Registered	29-sept-97	2_-sept-97	282_87	282887
Russian Federation	CHALLENGER	12	Filed	4-dèc-01		2001737_53
The BOMBI trademark
Jurisdiction	Trademark	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Canada	BOMBI	Wares	Registered	11-Aug.-72	7-Feb.-75	0356080	205140
The BOMBARDIERDIRECT trademark
Jurisdiction	Trademark	Class(es)	Status	Appl. Date	Start Date	Appl. No.	Reg. No.
Canada	BOMBARDIERDIRECT	Wares Services	Filed	12-January-2001		108896_
United States	BOMBARDIERDIRECT	2, 4, 6, 7, 8, 9, 11, 12, 1_, 1_, 20, 21, 24, 25, 28, 35, 36, 37, 39, 41, 42	Filed	12-July-2001		76284058

- 7 -

SCHEDULE “B”

INFORMATION TO BE INCLUDED IN THE PERIODIC REPORTS SUBMITTED BY

LICENSEE TO THE TRADE-MARK OWNER’S QUALITY CONTROL OVERSIGHT

COMMITTEE

1. Information relating to material recalls of Wares manufactured by Licensee.

2. Examples or sample depictions of current uses of the Trade-marks.

3. Safety recalls issued by Licensee with regard to Wares manufactured by Licensee.

4. Executive summary of insurance claims against Licensee with regard to Wares manufactured by Licensee providing reasonable detail of the number, nature and quantum of such claims per category of Wares or issue.

SCHEDULE “C”

1.	BOMBARDIER - Trademark of Bombardier Inc. Used under License
2.	[GRAPHIC]	- Trademark of Bombardier Inc. Used under License
3.	CHALLENGER - Trademark of Bombardier Inc. Used under License
4.	BOMBI – Trademark of Bombardier Inc. Used under License
5.	BOMBARDIERDIRECT - Trademark of Bombardier Inc. Used under License

SCHEDULE “D”

COMPOSITE MASKS

TRADE-MARK	COUNTRY	REGISTRATION #	REGISTRATION DATE	OWNER
BOMBARDIER SKI-DOO DESIGN	Canada	115,823	October 30, 1959	Bombardier Inc.
BOMBARDIER BRW & COG WHEEL	Austria	118599	January 20, 1988	Bombardier-Rotax Gmbh
BOMBARDIER ROTAX	Uruguay	237705	March 15, 1991	Bombardier Inc.
BOMBARDIER FORMULA	Sweden	0316621	September 6, 1996	Bombardier Inc.
BOMBARDIER PLUS	Switzerland	438,036	March 17, 1997	Bombardier Inc.
PLUS BOMBARDIER & DESIGN	Austria	163102	March 20, 1996	Bombardier Inc.
BV2S BOMBARDIER VISION AND VENTILATION SYSTEM	Canada	App. No. 1,171,377	Filing Date: March 18, 2003	Bombardier Inc.

SCHEDULE “E”

[GRAPHIC]

SCHEDULE “F”

[GRAPHIC]

BOMBARDIER

RECREATIONAL PRODUCTS

Bombardier Recreational Products Inc.

December 18, 2003

Bombardier Inc.

800 René-Lévesque Blvd. W.

Montreal, Quebec

H3B 1Y8

Attention:	Daniel Desjardins, Senior Vice-President and General Counsel
Re:	Current Uses of Trade-Marks and Bombardier Names

Dear Daniel:

This is to clarify our mutual understanding with respect to certain matters relating to the License Agreement between Bombardier Inc. and 4145321 Canada Inc. (the “License Agreement”).

As you know, Bombardier Inc. is divesting itself of its recreational products business. Upon the Closing of those transactions, certain historical uses of the Trade-mark and Bombardier Name (as both are defined in the License Agreement) may be occurring that are not specifically permitted under the License Agreement. To allow for an orderly transition, the parties therefore agree that 4145321 Canada Inc. (the “Licensee”) and its Affiliates will not be in breach of the License Agreement or any other agreement between the parties so long as Licensee and its Affiliates carry out the following actions as soon as possible after the date hereof but in any event within the time frames set forth below:

• change, within ninety-six (96) hours of the date hereof, all electronic letterhead templates, electronic memo templates, and electronic fax coversheet templates;

• update, within (3) months of the date hereof, all websites owned or operated by Licensee and its Affiliates to cease non-licensed uses of the Trade-mark and Bombardier Name;

• cease, within six (6) months of the date hereof, all non-licensed uses of the Trade-mark and Bombardier Name in all internal and external business documentation and collateral, in both electronic and printed form;

• remove, within nine (9) months of the date hereof, non-licensed uses of the Trade-Mark and Bombardier Name from physical property. This includes signage at non-dealer or distributor locations (e.g., manufacturing and administrative locations), and vehicles other than the products made or marketed by Licensee and its Affiliates (e.g. security vehicles, internal transportation vehicles, etc.); and

• within nine (9) months from the date hereof, otherwise make any other changes needed to cease uses of the Trade-Mark or Bombardier Name as of the date hereof that would not otherwise be permitted under the License Agreement, provided, however, that Licensee and its Affiliates shall also have the right to sell-off thereafter any inventory of Wares that use or are marked with Trade-Mark or the Bombardier Name in a manner not otherwise permitted in the License Agreement;

it being understood, for greater certainty, that the foregoing shall not be construed as permitting use of the Trade-mark or the Bombardier Name on any press releases of Licensee or its Affiliates.

Kindly acknowledge Bombardier Inc.’s agreement to the foregoing by countersigning this letter where indicated below.

Very truly yours,

/s/ Illegible

cc: Paul Raymond

Clemens Mayr

Acknowledged and Agreed to:

Bombardier Inc.
By:	/s/ Daniel Desjardins
	Daniel Desjardins
	Senior Vice-President and General Counsel

EX-10.11

Exhibit 10.11

Execution Version

SECOND AMENDED AND RESTATED

WHOLESALE FINANCING AGREEMENT

This Second Amended and Restated Wholesale Financing Agreement (this “Agreement”) is made as of this      day of December, 2003 by and between BOMBARDIER MOTOR CORPORATION OF AMERICA (the “Supplier”) and BOMBARDIER CAPITAL INC. (“BC”).

WHEREAS, (i) the Supplier and BC entered into a Wholesale Financing Agreement dated August 27, 1998, as amended and restated by the Amended and Restated Wholesale Financing Agreement dated as of November 1, 2002; and (ii) Bombardier Inc. (“BI”), on behalf of the Supplier, its wholly-owned subsidiary, and BC entered into a Floorplan Repurchase Agreement dated January 7, 2002 (the “Repurchase Agreement”) (collectively, the “Old Financing Agreements”);

WHEREAS, by this Agreement the Supplier and BC desire to amend, restate and replace in its entirety each of the Old Financing Agreements with respect to the relationship between the parties;

WHEREAS, the Supplier wishes to stimulate the sales of its products;

WHEREAS, the distributor and the dealer network is an essential asset of the Supplier;

WHEREAS, BC is in direct communication with the distributors and the dealers, and recognizes that it is of the utmost importance to maintain the image and reputation of the “Bombardier” brands, BC and the Supplier and maintain the best possible relations among BC, the Supplier and the distributors and dealers;

WHEREAS, BC and the Supplier desire to make arrangements for the financing of sales made by the Supplier to distributors and dealers and for the increase of business with such distributors and dealers.

NOW, THEREFORE, the parties hereto agree as follows:

1. Preamble

The preamble forms an integral part hereof.

2. Definitions

Unless the context requires otherwise, the following definitions shall apply:

a) “Bridge Period” means, with respect to any Instrument, the number of days from, and including, the first business day after the date of delivery of such Instrument to BC pursuant to Section 6.1 of this Agreement to, but excluding, the last business day of the month in which such Instrument was delivered;

US Wholesale Financing Agreement

b) “Dealers” shall mean and include all and any distributors and dealers who purchase and then sell the Supplier’s products, and each a “Dealer”;

c) “Financing Plan” means the credit plan or plans as established from time to time by BC to finance wholesale transactions with Dealers relating to products manufactured or distributed and sold to Dealers by the Supplier;

d) “Instrument” means all and any agreements and contracts in writing or any other documents evidencing the sale of Products, as hereinafter defined, by the Supplier to Dealers;

e) “Products” means all and any products or merchandise manufactured or distributed from time to time by the Supplier;

f) “Sales Program” means any plan, as established by the Supplier, existing now or in the future, to promote the sale of the Supplier’s Products;

g) “Security Interest” means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (X) statutory liens that attach by operation of law, in each case, so long as such liens are in respect of obligations which obligee(s) thereon regard(s) as not yet due and payable, and (Y) liens in favor of BC.

3. Object

Supplier intends to sell Products at wholesale to Dealers, who may require financial assistance from BC in order to make such purchases. To induce BC to finance the acquisition of Products from Supplier by any Dealer, Supplier agrees to provide certain repurchase benefits specified below and BC agrees to provide financial assistance in accordance with the terms of this Agreement.

4. Representations and Warranties

Supplier represents and warrants with respect to the Products covered by any Instrument at the time of delivery of such Instrument the following:

a) That Supplier transfers to the Dealer all right, title, and interest in and to the relevant Products, contingent upon BC’s financing the transaction;

b) That Supplier’s title to the relevant Products is free and clear of any Security Interest when transferred to the Dealer and shall remain free and clear of any Security Interest granted by or arising in respect of obligations of Supplier until the advance made by BC with respect to such Product has been repaid in full;

c) That the relevant Products have been the subject of a bona fide order placed by the Dealer with the Supplier and accepted by the Supplier and that the Dealer has agreed that the transaction be financed by BC;

US Wholesale Financing Agreement -2-

d) That the relevant Products are new, unused, and free of any material defects; and

e) That the relevant Products have been shipped to the Dealer no more than ten (10) days prior to the relevant Instrument date, and that the relevant Instrument date is no more than twenty (20) days prior to delivery of such Instrument to BC.

In the event the Supplier breaches any of the foregoing representations and warranties with respect to any Products, the Supplier will immediately upon demand pay to BC, in cash, an amount equal to the outstanding balance owed to BC with respect to such Products, plus the costs and expenses, if any, incurred by BC in the enforcement of this Agreement. Upon receipt of such payment, BC shall immediately assign to the Supplier all of its rights, title and interest in any Instrument in respect of such Products and shall take such further actions as are necessary to effect such assignment.

5. Credit Approval

5.1 So long as BC has a live interface with Supplier’s enterprise resource planning (“ERP”) system with not less than the same functionalities for updating Dealer status as BC has as of the date of this Agreement, if at the time a shipment is being prepared for shipment it is indicated on Supplier’s ERP system that the relevant Dealer’s status would allow that shipment to be approved and funded by BC, then, to the extent such shipment is made that same business day, the relevant Instruments related to such shipment shall (to the extent such Instruments contain accurate and complete information and meet the requirements of Section 4 above) be accepted and funded by BC. Should BC become aware of a Dealer default that is not indicated on Supplier’s ERP system (and which event would prevent this shipment to be approved and funded by BC) on the day that a shipment is being prepared for delivery to such Dealer, BC will contact promptly Supplier in order to mutually agree on possible steps required (including, if such shipment has not already been made, the cancellation of such shipment and of the related Instruments) in order to reduce or mitigate losses that could be incurred by BC as a result of funding and making such shipment to said Dealer.

5.2 Supplier, in its sole discretion, shall first approve all new Dealer applications. Upon approval of such application by Supplier, Supplier shall submit the application to BC for credit approval, which shall be granted or denied in accordance with its usual and customary credit policies. Supplier agrees to remit to BC (or to work with BC to obtain from the Dealer) all appropriate financial data and other pertinent information required by BC. Such information shall include Dealer’s financial statements for the last two years.

5.3 BC shall respond to any request for credit submitted by the Supplier (with respect to a new or an existing Dealer) within a reasonable time after receipt of the request with all supporting financial information.

US Wholesale Financing Agreement -3-

6. Payment to Supplier

6.1 At the option of Supplier, BC shall pay the Supplier the full face value on any accepted Instrument either (a) on the last business day of each month for all Instruments delivered during such month, or (b) within one (1) business day after the date of delivery of each accepted Instrument to BC. As of the date of this Agreement, fundings by BC are being made as provided under clause 6.1 (a) above.

6.2 In the event that Supplier elects the funding option in 6.1(b) above, in consideration for meeting such funding schedule, Supplier shall, in addition to any other amounts payable by Supplier to BC hereunder, pay to BC for each month the amount determined according to the following formula:

(W/X x Y) x (Z/12), where
W=	total funding pursuant to this Agreement during such month;
X =	the number of days in such month;
Y =	the number of days equal to a weighted average (based on the total dollar amount for each Instrument) of the number of days in the Bridge Periods of all Instruments delivered to BC during such month; and
Z=	annual “all in” cost of funds rate for such month determined as the weighted average annual Libor rates (determined on the basis of a 360-day year) during such month plus the weighted average cost of funds spread experienced by BC during such month (such cost of funds spread may vary from time to time, but shall not exceed 2%).

6.3 BC shall provide a reasonably detailed calculation of the fee payable by the Supplier hereunder with respect to each calendar month within three (3) business days after the end of such month. The Supplier shall pay such monthly fee within five (5) business days after receipt of such calculation, provided that such fee is approved by Supplier’s Vice President of Finance (or, if none, the person in a similar function) or such person’s authorized assistant (which approval shall not be unreasonably withheld or delayed).

6.4 The Supplier may change its funding option on thirty (30) days’ prior written notice to BC; provided, the effective date for any such change shall be the first day of the first calendar month following the end of such thirty (30) day notice period.

7. Financing Rate

7.1 BC and Supplier shall agree in writing from time to time on the rates to be paid by Supplier for the “free floorplanning” period under the Financing Plans. Until a new rate is agreed upon, the previous rate will apply.

-4-

7.2 Upon request in writing by Supplier, BC agrees to confirm in writing to Supplier the applicable rates for Supplier and Dealers in force from time to time and as soon as any modification or modifications occur in the determination of such rate.

7.3 In addition to the provisions of Section 9.5 of this Agreement relating to curtailment, in the event that Supplier creates a curtailment program to reduce the amount of principal owed by Dealers for Products in possession of Dealers after a predetermined period, BC agrees to support and administer such curtailment program; provided that BC was involved in its development and believes it reasonable to administrate.

7.4 All special curtailment agreements and any waivers of curtailment agreements and any repurchase extensions shall be agreed in writing by BC and Supplier. Curtailment waivers and repurchase extensions shall be effective to the extent they have been executed by Supplier’s Vice President of Finance (or, if none, the person in a similar function) or such person’s authorized assistant.

8. Administration and Services

8.1 BC shall conduct or have conducted floorplan inspections of Dealers in accordance with its policies and procedures as amended from time to time. In the event Product is damaged in connection with any repossession of Product, BC agrees to provide a copy of its condition report, which shall list the damage to Products, missing parts, and mileage or hour use evident upon a cursory exterior inspection of inventory.

8.2 BC shall provide additional services not generally provided for other suppliers. These additional services include, without limitation, credit assessment, invoicing, accounts receivable, demonstrations and trade-in programs, Sales Program administration, open account management, order entry system, transfers, prepayments, buyouts and special audits.

8.3 An authorized employee of BC shall be available during BC’s normal business hours to confirm to Supplier a Dealer’s current status, in order to complete a transaction between the Supplier and any Dealer.

8.4 BC endeavors in good faith to use best efforts to collect any and all amounts due on Instruments by the Dealers.

8.5 BC agrees to stop accruing interest to be charged to Supplier for any Product that is known to be stolen or destroyed by fire. Additionally, BC shall use all reasonable efforts to determine in good faith consistent with BC’s standard business practices whether Products have been sold out of trust during the free floorplanning period as soon as is reasonably practicable, and BC agrees that Supplier shall not be responsible for interest accrued after the earlier of (i) satisfaction by the relevant Dealer of its obligations in respect of such Products or

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(ii) seven (7) days from the date BC reasonably determines that such product was sold out of trust.

9. Repossession

9.1 If BC funds a Dealer’s purchase of Products from Supplier, Supplier agrees to repurchase any such Products from BC that BC repossesses (or that come into the possession of a carrier arranged for by Supplier at BC’s request) at an amount equal to the total unpaid principal owed by the relevant Dealer to BC with respect to such Products, less any scheduled but uncollected curtailment payments owing pursuant to an election under the terms provided for in Section 9.5 below or in connection with Supplier authorized rental programs or other Financing Programs otherwise agreed between BC and Supplier, if and to the extent each of the following conditions is met: (i) such Products have been repossessed from a Dealer in connection with a determination by BC that such Dealer is in default of its obligations to BC; (ii) such Products are new and unused (other than normal wear and tear from display or demonstration or a Supplier authorized rental or demonstration program); and (iii) such repurchase amount, when aggregated with repurchase amounts paid, deemed payable or for which payment has been requested under this Agreement and any similar agreement between Supplier (or an affiliate of Supplier) and Bombardier Capital Ltd. regarding floorplanned inventory in Canada (such agreement, as modified, supplemented and/or amended from time to time, the “Canadian WFA”) within the twelve (12) month period preceding the date of demand for repurchase (the “Measurement Period”), does not exceed the greater of (a) US$25,000,000 and (b) ten (10) percent of the average amount of financing outstanding under this Agreement and the Canadian WFA during the Measurement Period. For the purpose of calculating the average amount of financing outstanding under this Agreement and the Canadian WFA during the Measurement Period as provided for in Section 9.1(b) above, the amount of financing in Canadian dollars granted by BC to Supplier under the Canadian WFA will be converted to US currency using the exchange rate set by the Bank of Canada for converting Canadian dollars to US dollars on the date of demand of repurchase. The Supplier shall pay any such repurchase amounts payable hereunder within sixty (60) days after the earlier of (a) Supplier’s receipt of possession of the relevant Product or (b) the date such Product is picked up by a carrier arranged for by Supplier or (c) five (5) days after BC has confirmed in writing to Supplier that such Products are available for pick up, in each case in lawful money of the United States. Supplier shall have no obligation to repurchase any Products for which the conditions specified above have not been met. Supplier, at its option (upon request by BC), may provide assistance to BC, at BC’s sole cost, in remarketing Products it is not required to repurchase hereunder to other Dealers in its network. The outstanding balance owing with respect to any repurchase demand that remains unpaid for thirty (30) days shall begin to accrue interest at a rate equal to the then current Supplier financing rate for such Product, which shall be payable monthly, in arrears.

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9.2 BC must provide 24 hour advance notice to Supplier prior to repossession of any Products from a Dealer, and will endeavor to provide 48 hours notice to Supplier when practicable, in accordance with standard practice as of the date hereof.

9.3 In connection with any repurchase under Section 9.1 above, Supplier shall reimburse BC for transportation costs and storage fees to designated warehouses. Furthermore, Supplier shall reimburse BC for transportation costs to a non-designated warehouse if BC obtained prior authorization from Supplier.

9.4 Upon repossession, BC’s representative shall complete a condition report on the Product whenever possible and to the extent and ability of the technical expertise of the individual completing said report and submit a copy of such to Supplier with the request for payment on the Instrument covering such Product. Supplier has the responsibility and obligation to review and validate any discrepancies in such condition report within twenty (20) business days of receipt.

9.5 Upon thirty (30) days’ prior written notice to BC, Supplier may make an election (the “Sunset Election”), in its sole discretion, to impose a time limit on its obligation to repurchase products from BC under this Agreement, such that Supplier shall not be required to repurchase any Products from BC after the conclusion of such period (the “Repurchase Period”) and BC shall agree to such limit; provided that (i) the Repurchase Period shall be no less than 24 months; (ii) a curtailment program, created and administered in accordance with this Agreement, and reasonably agreeable to both BC and Supplier, shall have been put into effect with respect to the Dealers, which curtailment program shall provide that affected Dealers shall be required to pay no more than 2% curtailment per month, commencing six months before the end of the Repurchase Period and (iii) the curtailment program and the Repurchase Period limitation shall not apply to any Products sold prior to the effective date of the Sunset Election. Notwithstanding any other provision in this Agreement to the contrary, the Supplier shall not be required to repurchase any Products after the end of the related Repurchase Period; provided, in the event BC is unable to enforce its security interest in any Product as a result of bankruptcy proceedings or other litigation, mediation or arbitration affecting the Product which commence prior to the end of the Repurchase Period, Supplier’s repurchase obligations as to such Product shall be fixed, and shall not be affected by the further passage of time or subsequent failure to receive curtailments, as of the commencement date of such bankruptcy proceedings or other litigation, mediation or arbitration for no less than sixty (60) days subsequent to the dismissal or other termination of the proceedings giving rise to the stay.

10. Adjustments to a Free Floorplanning Program

10.1 Any change to a Financing Program requiring a manual or specific adjustment (with the exception of repossessed or transferred items), including any change to the length of the free floorplanning period for any Dealer or under the general terms of any Financing Program, must be approved by the Supplier’s Vice President of Finance (or, if none, the person in a similar function) or such

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person’s authorized assistant, and such approval shall not be unreasonably withheld or delayed.

10.2 Upon receipt of BC’s request for such a change, the Vice President of Finance (or, if none, the person in a similar function) or any duly authorized assistant may, in his or her reasonable discretion, approve such adjustment in writing and BC shall attach such writing to subsequent invoices sent to the Supplier in connection with Products subject to such program, and such approval shall not be unreasonably withheld or delayed.

11. Reporting

11.1 BC shall submit to Supplier various reports including units paid and/or transferred, prepaid daily report, outstanding balance report, demo units, distributor statements and units by region. BC shall be deemed to have complied with the foregoing as long as all information required in such reports appears in BC’s Capitalsurf^™ system and is available for review by Supplier’s authorized employees.

11.2 Supplier shall furnish to BC within one hundred twenty (120) days after the end of each fiscal year and within forty five (45) days after the end of each fiscal quarter, consolidated financial statements of Supplier’s parent as of the end of such fiscal period, fairly representing Supplier’s financial position, prepared in accordance with applicable generally accepted accounting principles (“GAAP”). The year-end statements, which statements shall consist of a balance sheet and related statements of income, retained earnings and cash flow, each with all footnotes, for the immediately preceding relevant fiscal period, shall be audited and shall be prepared by an internationally recognized major independent accounting firm.

12. Notices

Any notice to be sent by one party to the other shall be in writing, unless otherwise provided for in this Agreement and shall be addressed as follows:

12.1 To BC:

BOMBARDIER CAPITAL INC.

261 Mountain View Drive

P.O. Box 991

Colchester, VT 05446

Attn: Director of Operations – Recreational Products Finance

12.2 To the Supplier:

BOMBARDIER MOTOR CORPORATION OF AMERICA

c/o 6090851 CANADA INC.

1061 Parent Street

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Saint-Bruno, Quebec, Canada J3V 6P1

Attn.: Vice President—Finance and Administration

Tel: 450-461-7732

Fax: 450-461-7745

Any notice herein required or permitted to be given under any of the provisions of this Agreement shall be deemed to have been sufficiently and effectively given if delivered by hand or sent by registered mail, postage prepaid, or facsimile, and (i) a notice that is delivered by hand or by registered mail shall, if delivered on a business day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first business day following the day on which it is delivered, and (ii) a notice that is delivered by facsimile shall be deemed to be given and received on that day or, if such day is not a business day or if delivery occurs after 4:00 p.m. Eastern US time on such day shall be deemed to be given and received on the first business day following the day on which it is delivered.

Either one of the parties may advise the other in the manner aforesaid, of any change of address for the giving of notices.

13. Effective Date and Termination. Either party may terminate this Agreement by written notice to the other party, the termination to be effective one hundred eighty (180) days after the date of delivery thereof, but such termination shall not affect the Supplier’s liability with respect to Products financed by BC for or financial transactions entered into by BC with any Dealer prior to the effective date of termination, including, without limitation, Products not delivered or transactions that will not be completed until after the effective date of termination.

14. Amendment. This Agreement may not be amended except by written instrument signed by the parties hereto.

15. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. Neither party may assign its rights and obligations under this Agreement, including by operation of law, without the prior written consent of the other party, any such attempted assignment being null and void; provided, however, that without any such consent, (i) BC may assign its rights under this Agreement in connection with any securitization of receivables owed by Dealers hereunder, and (ii) BC may assign its rights and obligations under this Agreement to an entity directly or indirectly acquiring all or substantially all of BC’s interest in its floorplanning portfolio relating to the Products, whether by merger, sale of substantially all of its assets or otherwise, provided such entity has a credit rating (as published by a nationally recognized credit rating agency) that is not lower than the credit rating of BC as of the date of such assignment.

16. Waivers. Any failure of BC, on the one hand, or the Supplier, on the other, to comply with any obligation, covenant, agreement or condition herein may be expressly waived in writing by the Supplier or BC, respectively, but such waiver or failure to insist upon strict

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compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Except as otherwise specifically agreed between Supplier and BC, Supplier waives notice of non-payment, protest, and dishonor of any Instrument, and all other notices Supplier might otherwise be entitled to by law. Supplier waives any rights Supplier may have to require BC to proceed against any Dealer or to pursue any other remedy in BC’s power. Any delay by BC in repossessing Product that is subject to this Agreement shall not waive or modify Supplier’s obligations (as such obligations may be limited by the termination of any applicable Repurchase Period) hereunder, so long as BC pursues repossession in good faith.

17. Bailment. Until such time as BC has received payment for Products required to be repurchased by the Supplier pursuant to Section 9.1 of this Agreement, such Products shall be held by Supplier solely as bailee for BC and shall be subject to the superior possessory right of BC. Immediately upon demand from BC, Supplier shall surrender possession of any such unpaid Products pursuant to the instructions of BC, and Supplier’s repurchase obligations with respect to such surrendered Products shall terminate. Contemporaneously with full and final payment to BC for repurchased Products, the bailment shall terminate and BC shall transfer to Supplier any right, title, and interest BC may have in and to such Products.

18. Set Off and Extensions. Either party (the “Offsetting Party”) may deduct, set off, withhold, or apply any sums or payments due from the other party to the Offsetting Party, against any sums due from the Offsetting Party to the other party, provided that, the Offsetting Party has notified the other party of its intention to make such set off and the reasons for such set off in writing and has provided the other party with a 30 day grace period to resolve the issues giving rise to such proposed set off. BC may extend the time for payment of, modify, restructure, or defer the obligations of any Dealer without notice to Supplier and without altering Supplier’s obligations hereunder, provided that if BC, without Supplier’s consent, waives or reduces any curtailment payments which Supplier would be entitled to deduct (if uncollected) in calculating the appropriate repurchase amount for any Product, such payments (if uncollected) shall be deemed not to have been waived or reduced in calculating the applicable repurchase amount.

19. Governing Law. This Agreement and the legal relations among the parties hereto shall be governed by and construed in accordance with the laws of the State of New York.

20. Severability. If a court of competent jurisdiction should hold any of the provisions of this Agreement invalid, illegal or unenforceable in any respect, the remaining provisions shall nevertheless be given full effect and shall be construed as if such invalid, illegal or unenforceable provisions or part of a provision had never been contained in this Agreement.

21. Entire Agreement. This Agreement and the Strategic Alliance Exclusivity Agreement among Supplier, BC and certain other entities party thereto dated as of the date hereof set forth the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and supersede all prior agreements, promises, covenants,

US Wholesale Financing Agreement -10-

arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto, including, without limitation, the Old Financing Agreements, provided that this Agreement shall apply to all Products financed under the Old Financing Agreements, as well as those financed hereunder after the date hereof.

22. Third Parties. Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or corporation other than the parties hereto and their successors or assigns any rights or remedies under or by reason of this Agreement.

23. Independent Parties. Nothing contained in this Agreement shall be construed to constitute the parties hereto or any of them as partners, joint venturers, principal and agent, or employer and employee.

24. Headings. The headings in this Agreement have been included for reference purposes only and shall not determine the meaning or interpretation of this Agreement.

25. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[The remainder of this page is intentionally left blank.]

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IN WITNESS WHERE OF, the parties hereto have caused this Agreement to be executed as of the date first above written.

BOMBARDIER CAPITAL INC.	BOMBARDIER MOTOR CORPORATION OF AMERICA
By:	By:
Title:	Title:
By:	By:
Title:	Title:

[WHOLESALE FINANCING AGREEMENT (U.S.)]

EX-10.12

EXHIBIT 10.12

Execution Version

AMENDED AND RESTATED

WHOLESALE FINANCING AGREEMENT

This Amended and Restated Wholesale Financing Agreement (this “Agreement”) is made as of this      day of December, 2003 by and between 6090851 CANADA INC. (the “Supplier”) and BOMBARDIER CAPITAL LTD. (“BC”).

WHEREAS, (i) Bombardier Inc. (“BI”) through its Bombardier Recreational Products Division, as predecessor in interest to the Supplier, and BC entered into a Wholesale Financing Agreement dated August 27, 1998, and (ii) BI through its Bombardier Recreational Products Division, as predecessor in interest to the Supplier, and BC entered into a Floorplan Repurchase Agreement dated January 7, 2002 (the “Repurchase Agreement”) (collectively, the “Old Financing Agreements”);

WHEREAS, by this Agreement the Supplier and BC desire to amend, restate and replace in its entirety each of the Old Financing Agreements with respect to the relationship between the parties;

WHEREAS, the Supplier wishes to stimulate the sales of its products;

WHEREAS, the distributor and the dealer network is an essential asset of the Supplier;

WHEREAS, BC is in direct communication with the distributors and the dealers, and recognizes that it is of the utmost importance to maintain the image and reputation of the “Bombardier” brands, BC and the Supplier and maintain the best possible relations among BC, the Supplier, the distributors and the dealers;

WHEREAS, BC and the Supplier desire to make arrangements for the financing of sales made by the Supplier to distributors and dealers and for the increase of business with such distributors and dealers.

NOW, THEREFORE, the parties hereto agree as follows:

1. Preamble

The preamble forms an integral part hereof.

2. Definitions

Unless the context requires otherwise, the following definitions shall apply:

a) “Bridge Period” means, with respect to any Instrument, the number of days from, and including, the first business day after the date of delivery of such Instrument to BC pursuant to Section 6.1 of this Agreement to, but excluding, the last business day of the month in which such Instrument was delivered;

Canadian Wholesale Financing Agreement

b) “Dealers” shall mean and include all and any distributors and dealers who purchase and then sell the Supplier’s products, and each a “Dealer”;

c) “Financing Plan” means the credit plan or plans as established from time to time by BC to finance wholesale transactions with Dealers relating to products manufactured or distributed and sold to Dealers by the Supplier;

d) “Instrument” means all and any agreements and contracts in writing or any other documents evidencing the sale of Products, as hereinafter defined, by the Supplier to Dealers;

e) “Products” means all and any products or merchandise manufactured or distributed from time to time by the Supplier;

f) “Sales Program” means any plan, as established by the Supplier, existing now or in the future, to promote the sale of the Supplier’s Products;

g) “Security Interest” means any mortgage, hypothec, reservation of ownership, pledge, lien, encumbrance, charge, or other security interest, other than (X) statutory liens that attach by operation of law, in each case, so long as such liens are in respect of obligations which obligee(s) thereon regard(s) as not yet due and payable, (Y) any mortgage, hypothec, reservation of ownership, pledge, lien, encumbrance, charge, or other security interest granted by or arising as a result of conduct by the relevant Dealer and (Z) liens, security interests, hypothecs or reservations of ownership in favor of BC.

3. Object

Supplier intends to sell Products at wholesale to Dealers, who may require financial assistance from BC in order to make such purchases. To induce BC to finance the acquisition of Products from Supplier by any Dealer, Supplier agrees to provide certain repurchase benefits specified below and BC agrees to provide financial assistance in accordance with the terms of this Agreement.

4. Representations and Warranties

Supplier represents and warrants with respect to the Products covered by any Instrument at the time of delivery of such Instrument the following:

a) That Supplier transfers to the Dealer and/or BC, as the case may be, all right, title, and interest in and to the relevant Products, contingent upon BC’s financing the transaction;

b) That Supplier’s title to the relevant Products is free and clear of any Security Interest when transferred to the Dealer and/or BC, as the case may be, and shall remain free and clear of any Security Interest granted by or arising in respect of obligations of Supplier until the advance made by BC with respect to such Product has been repaid in full;

Canadian Wholesale Financing Agreement -2-

c) That the relevant Products have been the subject of a bona fide order placed by the Dealer with the Supplier and accepted by the Supplier and that the Dealer has agreed that the transaction be financed by BC;

d) That the relevant Products are new, unused, and free of any material defects; and

e) That the relevant Products have been shipped to the Dealer no more than ten (10) days prior to the relevant Instrument date, and that the relevant Instrument date is no more than twenty (20) days prior to delivery of such Instrument to BC.

In the event the Supplier breaches any of the foregoing representations and warranties with respect to any Products, the Supplier will immediately upon demand pay to BC, in cash, an amount equal to the outstanding balance owed to BC with respect to such Products (including any freight, duties, provincial sales taxes and/or harmonized sales tax and/or federal goods and services tax financed by BC (collectively the “Duties & Taxes”)) plus the costs and expenses, if any, incurred by BC in the enforcement of this Agreement. Upon receipt of such payment, BC shall immediately assign to the Supplier all of its rights, title and interest in any Instrument in respect of such Products and shall take such further actions as are necessary to effect such assignment.

5. Credit Approval

5.1 So long as BC has a live interface with Supplier’s enterprise resource planning (“ERP”) system with not less than the same functionalities for updating Dealer status as BC has as of the date of this Agreement, if at the time a shipment is being prepared for shipment it is indicated on Supplier’s ERP system that the relevant Dealer’s status would allow that shipment to be approved and funded by BC, then, to the extent such shipment is made that same business day, the relevant Instruments related to such shipment shall (to the extent such Instruments contain accurate and complete information and meet the requirements of Section 4 above) be accepted and funded by BC. Should BC become aware of a Dealer default that is not indicated on Supplier’s ERP system (and which event would prevent this shipment to be approved and funded by BC) on the day that a shipment is being prepared for delivery to such Dealer, BC will contact promptly Supplier in order to mutually agree on possible steps required (including, if such shipment has not already been made, the cancellation of such shipment and of the related Instruments) in order to reduce or mitigate losses that could be incurred by BC as a result of funding and making such shipment to said Dealer.

5.2 Supplier, in its sole discretion, shall first approve all new Dealer applications. Upon approval of such application by Supplier, Supplier shall submit the application to BC for credit approval, which shall be granted or denied in accordance with its usual and customary credit policies. Supplier agrees to remit

Canadian Wholesale Financing Agreement -3-

to BC (or to work with BC to obtain from the Dealer) all appropriate financial data and other pertinent information required by BC. Such information shall include Dealer’s financial statements for the last two years.

5.3 BC shall respond to any request for credit submitted by the Supplier (with respect to a new or an existing Dealer) within a reasonable time after receipt of the request with all supporting financial information.

6. Payment to Supplier

6.1 At the option of Supplier, BC shall pay the Supplier the full face value (including any Duties & Taxes) on any accepted Instrument either (a) on the last business day of each month for all Instruments delivered during such month, or (b) within one (1) business day after the date of delivery of each accepted Instrument to BC. As of the date of this Agreement, fundings by BC are being made as provided under clause 6.1 (a) above.

6.2 In the event that Supplier elects the funding option in 6.1(b) above, in consideration for meeting such funding schedule, Supplier shall, in addition to any other amounts payable by Supplier to BC hereunder, pay to BC for each month the amount determined according to the following formula:

(W/X x Y) x (Z/12), where
W=	total funding pursuant to this Agreement during such month;
X =	the number of days in such month;
Y =	the number of days equal to a weighted average (based on the total dollar amount for each Instrument) of the number of days in the Bridge Periods of all Instruments delivered to BC during such month; and
Z=	annual “all in” cost of funds rate for such month determined as the weighted average annual Canadian 30 day Bankers Acceptance rates (determined on the basis of a 360-day year) during such month plus the weighted average cost of funds spread experienced by BC during such month (such cost of funds spread may vary from time to time, but shall not exceed 2%).

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6.3 BC shall provide a reasonably detailed calculation of the fee payable by the Supplier hereunder with respect to each calendar month within three (3) business days after the end of such month. The Supplier shall pay such monthly fee plus any applicable taxes within five (5) business days after receipt of such calculation, provided that such fee is approved by Supplier’s Vice President of Finance (or, if none, the person in a similar function) or such person’s authorized assistant (which approval shall not be unreasonably withheld or delayed).

6.4 The Supplier may change its funding option on thirty (30) days’ prior written notice to BC; provided, the effective date for any such change shall be the first day of the first calendar month following the end of such thirty (30) day notice period.

7. Financing Rate

7.1 BC and Supplier shall agree in writing from time to time on the rates to be paid by Supplier for the “free floorplanning” period under the Financing Plans. Until a new rate is agreed upon, the previous rate will apply.

7.2 Upon request in writing by Supplier, BC agrees to confirm in writing to Supplier the applicable rates for Supplier and Dealers in force from time to time and as soon as any modification or modifications occur in the determination of such rate.

7.3 In addition to the provisions of Section 9.5 of this Agreement relating to curtailment, in the event that Supplier creates a curtailment program to reduce the amount of principal owed by Dealers for Products in possession of Dealers after a predetermined period, BC agrees to support and administer such curtailment program; provided that BC was involved in its development and believes it reasonable to administrate.

7.4 All special curtailment agreements and any waivers of curtailment agreements and any repurchase extensions shall be agreed in writing by BC and Supplier. Curtailment waivers and repurchase extensions shall be effective to the extent they have been executed by Supplier’s Vice President of Finance (or, if none, the person in a similar function) or such person’s authorized assistant.

8. Administration and Services

8.1 BC shall conduct or have conducted floorplan inspections of Dealers in accordance with its policies and procedures as amended from time to time. In the event Product is damaged in connection with any repossession of Product, BC agrees to provide a copy of its condition report, which shall list the damage to Products, missing parts, and mileage or hour use evident upon a cursory exterior inspection of inventory.

8.2 BC shall provide additional services not generally provided for other suppliers. These additional services include, without limitation, credit assessment, invoicing, accounts receivable, demonstrations and trade-in programs, Sales Program

Canadian Wholesale Financing Agreement -5-

administration, open account management, order entry system, transfers, prepayments, buyouts and special audits.

8.3 An authorized employee of BC shall be available during BC’s normal business hours to confirm to Supplier a Dealer’s current status, in order to complete a transaction between the Supplier and any Dealer.

8.4 BC endeavors in good faith to use best efforts to collect any and all amounts due on Instruments by the Dealers.

8.5 BC agrees to stop accruing interest to be charged to Supplier for any Product that is known to be stolen or destroyed by fire. Additionally, BC shall use all reasonable efforts to determine in good faith consistent with BC’s standard business practices whether Products have been sold out of trust during the free floorplanning period as soon as is reasonably practicable, and BC agrees that Supplier shall not be responsible for interest accrued after the earlier of (i) satisfaction by the relevant Dealer of its obligations in respect of such Products or (ii) seven (7) days from the date BC reasonably determines that such product was sold out of trust.

9. Repossession

9.1 If BC funds a Dealer’s purchase of Products from Supplier, Supplier agrees to repurchase any such Products from BC that BC repossesses (or that come into the possession of a carrier arranged for by Supplier at BC’s request) at an amount equal to the total unpaid principal (including any Duties & Taxes) owed by the relevant Dealer to BC with respect to such Products, less any scheduled but uncollected curtailment payments owing pursuant to an election under the terms provided for in Section 9.5 below or in connection with Supplier authorized rental programs or other Financing Programs otherwise agreed between BC and Supplier, plus any applicable provincial sales tax and/or federal goods and services tax and/or harmonized sales tax on such amount (individually the “Repurchase Amount” and collectively the “Repurchase Amounts”), if and to the extent each of the following conditions is met: (i) such Products have been repossessed from a Dealer in connection with a determination by BC that such Dealer is in default of its obligations to BC; (ii) such Products are new and unused (other than normal wear and tear from display or demonstration or a Supplier authorized rental or demonstration program); and (iii) such Repurchase Amount, when aggregated with Repurchase Amounts paid, deemed payable or for which payment has been requested under this Agreement and any similar agreement between Supplier (or an affiliate of Supplier) and Bombardier Capital Inc. regarding floorplanned inventory in the USA (such agreement, as modified, supplemented and/or amended from time to time, the “US WFA”) within the twelve (12) month period preceding the date of demand for repurchase (the “Measurement Period”), does not exceed the greater of (a) US$25,000,000 and (b) ten (10) percent of the average amount of financing outstanding under this Agreement and the US WFA during the Measurement Period. For the purpose of

Canadian Wholesale Financing Agreement -6-

calculating the average amount of financing outstanding under this Agreement and the US WFA during the Measurement Period as provided for in Section 9.1(b) above, the amount of financing in Canadian dollars granted by BC to Supplier under this Agreement will be converted to US currency using the exchange rate set by the Bank of Canada for converting Canadian dollars to US dollars on the date of demand of repurchase. The Supplier shall pay any such Repurchase Amounts payable hereunder within sixty (60) days after the earlier of (a) Supplier’s receipt of possession of the relevant Product or (b) the date such Product is picked up by a carrier arranged for by Supplier or (c) five (5) days after BC has confirmed in writing to Supplier that such Products are available for pick up, in each case in lawful money of Canada. Supplier shall have no obligation to repurchase any Products for which the conditions specified above have not been met. Supplier, at its option (upon request by BC), may provide assistance to BC, at BC’s sole cost, in remarketing Products it is not required to repurchase hereunder to other Dealers in its network. The outstanding balance owing with respect to any repurchase demand that remains unpaid for thirty (30) days shall begin to accrue interest at a rate equal to the then current Supplier financing rate for such Product, which shall be payable monthly, in arrears.

9.2 BC must provide 24 hour advance notice to Supplier prior to repossession of any Products from a Dealer, and will endeavor to provide 48 hours notice to Supplier when practicable, in accordance with standard practice as of the date hereof.

9.3 In connection with any repurchase under Section 9.1 above, Supplier shall reimburse BC for transportation costs and storage fees (including any applicable provincial sales taxes and/or federal goods and services taxes and/or harmonized sales taxes) to designated warehouses and will provide a list of such designated warehouses. Furthermore, Supplier shall reimburse BC for transportation costs to a non-designated warehouse if BC obtained prior authorization from Supplier.

9.4 Upon repossession, BC’s representative shall complete a condition report on the Product whenever possible and to the extent and ability of the technical expertise of the individual completing said report and submit a copy of such to Supplier with the request for payment on the Instrument covering such Product. Supplier has the responsibility and obligation to review and validate any discrepancies in such condition report within twenty (20) business days of receipt.

9.5 Upon thirty (30) days’ prior written notice to BC, Supplier may make an election (the “Sunset Election”), in its sole discretion, to impose a time limit on its obligation to repurchase products from BC under this Agreement, such that Supplier shall not be required to repurchase any Products from BC after the conclusion of such period (the “Repurchase Period”) and BC shall agree to such limit; provided that (i) the Repurchase Period shall be no less than 24 months; (ii) a curtailment program, created and administered in accordance with this Agreement, and reasonably agreeable to both BC and Supplier, shall have been put into effect with respect to the Dealers, which curtailment program shall provide that affected Dealers shall be required to pay no more than 2%

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curtailment per month, commencing six months before the end of the Repurchase Period and (iii) the curtailment program and the Repurchase Period limitation shall not apply to any Products sold prior to the effective date of the Sunset Election. Notwithstanding any other provision in this Agreement to the contrary, the Supplier shall not be required to repurchase any Products after the end of the related Repurchase Period; provided, in the event BC is unable to enforce its security interest, reservation of ownership or hypothec in any Product as a result of bankruptcy proceedings or other litigation, mediation or arbitration affecting the Product which commence prior to the end of the Repurchase Period, Supplier’s repurchase obligations as to such Product shall be fixed, and shall not be affected by the further passage of time or subsequent failure to receive curtailments, as of the commencement date of such bankruptcy proceedings or other litigation, mediation or arbitration for no less than sixty (60) days subsequent to the dismissal or other termination of the proceedings giving rise to the stay.

10. Adjustments to a Free Floorplanning Program

10.1 Any change to a Financing Program requiring a manual or specific adjustment (with the exception of repossessed or transferred items), including any change to the length of the free floorplanning period for any Dealer or under the general terms of any Financing Program, must be approved by the Supplier’s Vice President of Finance (or, if none, the person in a similar function) or such person’s authorized assistant, and such approval shall not be unreasonably withheld or delayed.

10.2 Upon receipt of BC’s request for such a change, the Vice President of Finance (or, if none, the person in a similar function) or any duly authorized assistant may, in his or her reasonable discretion, approve such adjustment in writing and BC shall attach such writing to subsequent invoices sent to the Supplier in connection with Products subject to such program, and such approval shall not be unreasonably withheld or delayed.

11. Reporting

11.1 BC shall submit to Supplier various reports including units paid and/or transferred, prepaid daily report, outstanding balance report, demo units, distributor statements and units by region. BC shall be deemed to have complied with the foregoing as long as all information required in such reports appears in BC’s Capitalsurf^™ system and is available for review by Supplier’s authorized employees.

11.2 Supplier shall furnish to BC within one hundred twenty (120) days after the end of each fiscal year and within forty five (45) days after the end of each fiscal quarter, consolidated financial statements of Supplier’s parent as of the end of such fiscal period, fairly representing Supplier’s financial position, prepared in accordance with applicable generally accepted accounting principles (“GAAP”).

Canadian Wholesale Financing Agreement -8-

The year-end statements, which statements shall consist of a balance sheet and related statements of income, retained earnings and cash flow, each with all footnotes, for the immediately preceding relevant fiscal period, shall be audited and shall be prepared by an internationally recognized major independent accounting firm.

12. Notices

Any notice to be sent by one party to the other shall be in writing, unless otherwise provided for in this Agreement and shall be addressed as follows:

12.1 To BC:

BOMBARDIER CAPITAL LTD.

6400 Auteuil, 2^nd floor

Brossard, Quebec, J4Z 3P5

Attn: Director of Operations – Recreational Products Finance

Tel: 450-443-4400

Fax : 450-443-8943

12.2 To the Supplier:

6090851 CANADA INC.

1061 Parent Street

Saint-Bruno, Quebec, Canada J3V 6P1

Attn.: Vice President—Finance and Administration

Tel: 450-461-7732

Fax: 450-461-7745

Any notice herein required or permitted to be given under any of the provisions of this Agreement shall be deemed to have been sufficiently and effectively given if delivered by hand or sent by registered mail, postage prepaid, or facsimile, and (i) a notice that is delivered by hand or by registered mail shall, if delivered on a business day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first business day following the day on which it is delivered, and (ii) a notice that is delivered by facsimile shall be deemed to be given and received on that day or, if such day is not a business day or if delivery occurs after 4:00 p.m. Eastern US time on such day shall be deemed to be given and received on the first business day following the day on which it is delivered.

Either one of the parties may advise the other in the manner aforesaid, of any change of address for the giving of notices.

Canadian Wholesale Financing Agreement -9-

13. Effective Date and Termination

Either party may terminate this Agreement by written notice to the other party, the termination to be effective one hundred eighty (180) days after the date of delivery thereof, but such termination shall not affect the Supplier’s liability with respect to Products financed by BC for or financial transactions entered into by BC with any Dealer prior to the effective date of termination, including, without limitation, Products not delivered or transactions that will not be completed until after the effective date of termination.

14. Amendment

This Agreement may not be amended except by written instrument signed by the parties hereto.

15. Assignment

This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. Neither party may assign its rights and obligations under this Agreement, including by operation of law, without the prior written consent of the other party, any such attempted assignment being null and void; provided, however, that without any such consent, (i) BC may assign its rights under this Agreement in connection with any securitization of receivables owed by Dealers hereunder, and (ii) BC may assign its rights and obligations under this Agreement to an entity directly or indirectly acquiring all or substantially all of BC’s interest in its floorplanning portfolio relating to the Products, whether by merger, sale of substantially all of its assets or otherwise, provided such entity has a credit rating (as published by a nationally recognized credit rating agency) that is not lower than the credit rating of BC as of the date of such assignment.

16. Waivers

Any failure of BC, on the one hand, or the Supplier, on the other, to comply with any obligation, covenant, agreement or condition herein may be expressly waived in writing by the Supplier or BC, respectively, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Except as otherwise specifically agreed between Supplier and BC, Supplier waives notice of non-payment, protest, and dishonor of any Instrument, and all other notices Supplier might otherwise be entitled to by law. Supplier waives any rights Supplier may have to require BC to proceed against any Dealer or to pursue any other remedy in BC’s power. Any delay by BC in repossessing Product that is subject to this Agreement shall not waive or modify Supplier’s obligations (as such obligations may be limited by the termination of any applicable Repurchase Period) hereunder, so long as BC pursues repossession in good faith.

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17. Deposit

Until such time as BC has received payment for Products required to be repurchased by the Supplier pursuant to Section 9.1 of this Agreement, such Products shall be held by Supplier solely as depository for BC at no cost for BC, and shall be subject to the superior possessory right of BC. Immediately upon demand from BC, Supplier shall surrender possession of any such unpaid Products pursuant to the instructions of BC, and Supplier’s repurchase obligations with respect to such surrendered Products shall terminate. Contemporaneously with full and final payment to BC for repurchased Products, the contract of deposit shall terminate and BC shall transfer to Supplier any right, title, and interest BC may have in and to such Products.

18. Set Off and Extensions

Either party (the “Offsetting Party”) may deduct, set off, withhold, or apply any sums or payments due from the other party to the Offsetting Party, against any sums due from the Offsetting Party to the other party, provided that, the Offsetting Party has notified the other party of its intention to make such set off and the reasons for such set off in writing and has provided the other party with a 30 day grace period to resolve the issues giving rise to such proposed set off. BC may extend the time for payment of, modify, restructure, or defer the obligations of any Dealer without notice to Supplier and without altering Supplier’s obligations hereunder, provided that if BC, without Supplier’s consent, waives or reduces any curtailment payments which Supplier would be entitled to deduct (if uncollected) in calculating the appropriate repurchase amount for any Product, such payments (if uncollected) shall be deemed not to have been waived or reduced in calculating the applicable Repurchase Amount.

19. Governing Law

This Agreement and the legal relations among the parties hereto shall be governed by and construed in accordance with the laws of the Province of Quebec.

20. Severability

If a court of competent jurisdiction should hold any of the provisions of this Agreement invalid, illegal or unenforceable in any respect, the remaining provisions shall nevertheless be given full effect and shall be construed as if such invalid, illegal or unenforceable provisions or part of a provision had never been contained in this Agreement.

21. Entire Agreement

This Agreement and the Strategic Alliance Exclusivity Agreement among Supplier, BC and certain other entities party thereto dated as of the date hereof set forth the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto, including, without limitation, the Old

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Financing Agreements, provided that this Agreement shall apply to all Products financed under the Old Financing Agreements, as well as those financed hereunder after the date hereof.

22. Third Parties

Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or corporation other than the parties hereto and their successors or assigns any rights or remedies under or by reason of this Agreement.

23. Independent Parties

Nothing contained in this Agreement shall be construed to constitute the parties hereto or any of them as partners, joint venturers, principal and agent, or employer and employee.

24. Headings

The headings in this Agreement have been included for reference purposes only and shall not determine the meaning or interpretation of this Agreement.

25. Counterparts

This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

26. Language

This Agreement and all related documents have been written in the English language at the express request of the parties. Le présent contrat a insiquetous les documentss’y rattachant ont été rédigés en anglais à la demande expresse des parties.

[The remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

BOMBARDIER CAPITAL LTD.	6090851 CANADA INC.
By:	By:
Title:	Title:
By:	By:
Title:	Title:

[WHOLESALE FINANCING AGREEMENT (CANADA)]

EX-10.13

PURCHASE AGREEMENT

Dated as of December 18, 2003

Among

BOMBARDIER MOTOR CORPORATION OF AMERICA

BOMBARDIER NORDTRAC AB

BOMBARDIER NORDTRAC AS and

BOMBARDIER-NORDTRAC OY

as Sellers and Servicers

and

BOMBARDIER RECREATIONAL PRODUCTS INC.

as Seller and Parent Servicer

and

BRP RECEIVABLES FUNDING, LLC

as Purchaser

TABLE OF CONTENTS

			Page
ARTICLE I	DEFINITIONS		1
	SECTION 1.01.	Certain Defined Terms	1
	SECTION 1.02.	Other Terms	13
ARTICLE II	AMOUNTS AND TERMS OF PURCHASES		13
	SECTION 2.01.	Facility	13
	SECTION 2.02.	Making Purchases	13
	SECTION 2.03.	Collections	14
	SECTION 2.04.	Settlement Procedures	15
	SECTION 2.05.	Payments and Computations, Etc.	16
	SECTION 2.06.	Cutoff Date	16
	SECTION 2.07.	Payments Free and Clear of Taxes, Etc.	16
	SECTION 2.08.	True Sales	17
ARTICLE III	CONDITIONS OF PURCHASES		18
	SECTION 3.01.	Conditions Precedent to Initial Purchase from the Sellers	18
	SECTION 3.02.	Conditions Precedent to All Purchases	20
ARTICLE IV	REPRESENTATIONS AND WARRANTIES		20
	SECTION 4.01.	Representations and Warranties of the Sellers	20
	SECTION 4.02.	Parent Warranties Regarding Receivables	23
ARTICLE V	COVENANTS		23
	SECTION 5.01.	Covenants of the Sellers	23
ARTICLE VI	ADMINISTRATION AND COLLECTION		28
	SECTION 6.01.	Designation of Servicers	28
	SECTION 6.02.	Duties of Servicers	28
	SECTION 6.03.	Servicer Fee	30
	SECTION 6.04.	Certain Rights of the Purchaser	30
	SECTION 6.05.	Rights and Remedies	31
	SECTION 6.06.	Transfer of Records to Purchaser	31
ARTICLE VII	EVENTS OF TEE TERMINATION		32
	SECTION 7.01.	Events of Termination	32
ARTICLE VIII	INDEMNIFICATION		34
	SECTION 8.01.	Indemnities by the Sellers	34
ARTICLE IX	MISCELLANEOUS		36
	SECTION 9.01.	Amendments, Etc.	36
	SECTION 9.02.	Notices, Etc.	37
	SECTION 9.03.	Binding Effect; Assignability	37

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SECTION 9.04.	Costs, Expenses and Taxes	37
SECTION 9.05.	No Proceedings	38
SECTION 9.06.	Confidentiality	38
SECTION 9.07.	GOVERNING LAW	38
SECTION 9.08.	Third Party Beneficiary	39
SECTION 9.09.	Execution in Counterparts	39
SECTION 9.10.	Consent to Jurisdiction	39
SECTION 9.11.	Judgment	40
SECTION 9.12.	Entire Agreement	40
SECTION 9.13.	Language	40

SCHEDULES

SCHEDULE I	-	Deposit Account(s)	Sch. I-1
SCHEDULE II	-	Addresses of Sellers, Purchaser and Servicers	Sch. II-1
SCHEDULE III	-	Approved Obligors	Sch. III-1
EXHIBITS
EXHIBIT A	-	Form of Promissory Note for Deferred Purchase Price	A-1
EXHIBIT B	-	Form of Notices to Obligors and Invoice Legends	B-1

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PURCHASE AGREEMENT

Dated as of December 18, 2003

BOMBARDIER MOTOR CORPORATION OF AMERICA, a Delaware corporation, as a Seller and a Servicer, BOMBARDIER NORDTRAC AB, a Swedish incorporated company, as a Seller and a Servicer, BOMBARDIER NORDTRAC AS, a Norwegian incorporated company, as a Seller and a Servicer, BOMBARDIER-NORDTRAC OY, a Finnish limited liability company, as a Seller and a Servicer, and BOMBARDIER RECREATIONAL PRODUCTS INC., a Canadian corporation, as a Seller and the Parent Servicer, and BRP RECEIVABLES FUNDING, LLC, a Delaware limited liability company (the “Purchaser”), agree as follows:

PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

(2) The Sellers have Receivables that they wish to sell to the Purchaser, and the Purchaser is prepared to purchase such Receivables on the terms set forth herein.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Adverse Claim” means a lien, security interest, mortgage, pledge, assignment, hypothec, hypothecation, privilege, title retention or other charge or encumbrance.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.

“Alternate Base Rate” means a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the highest of:

(a) the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time as Citibank, N.A.’s base rate;

(b)  ¹/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by

Citibank, N.A. on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank, N.A. from three New York certificate of deposit dealers of recognized standing selected by Citibank, N.A., in either case adjusted to the nearest  ¹/4 of one percent or, if there is no nearest  ¹/4 of one percent, to the next higher  ¹/4 of one percent; and

(c) the Federal Funds Rate.

“BCI” means Bombardier Capital Inc., a Massachusetts corporation.

“BCL” means Bombardier Capital Limited, a Quebec company.

“Bombardier Inc. Purchase Agreement” means the Purchase Agreement, dated December 2, 2003, between Bombardier Inc. and Bombardier Recreational Products Inc.

“Bombardier Motor” means Bombardier Motor Corporation of America, a Delaware corporation.

“Bombardier Nordtrac AB” means Bombardier Nordtrac AB, a Swedish incorporated company with the Swedish registration number 5563537413.

“Bombardier Nordtrac AS” means Bombardier Nordtrac AS, a Norwegian incorporated company with Norwegian registration number 974394197.

“Bombardier-Nordtrac Oy” means Bombardier-Nordtrac Oy, a Finnish limited liability company, Business Identity Code 0703296-1.

“Business Day” means any day on which banks are not authorized or required to close in New York City, New York, Montreal, Quebec or London, England.

“Canadian Dollars” means dollars in the lawful currency of Canada.

“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Receivable, in each case received after December 12, 2003 and all funds deemed to have been received by any Seller or any other Person as a Collection pursuant to Section 2.04.

“Contract” means a written agreement, invoice or purchase order between any Seller and an Obligor, pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time (including, without limitation an account, instrument, installment sales contract, chattel paper or general intangible).

“Credit and Collection Policy” means those customary receivables credit and collection policies and practices of the applicable Seller in effect on the date of this Agreement as applied by such Seller in the ordinary course of its lawful business, as such policies and procedures are modified from time to time in compliance with this Agreement, it being acknowledged in the

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case of the Parent that such policies and procedures refer to corresponding policies and procedures of Bombardier Inc. as in effect on the date hereof.

“Debt Rating” has the meaning assigned to that term in the Sale Agreement.

“Defaulted Receivable” means a Receivable:

(i) as to which any payment, or part thereof, remains unpaid for 91 or more days from the original due date for such payment;

(ii) as to which the Obligor thereof (or any of the Obligor’s Affiliates obligated thereon or owning any Related Security in respect thereof) has taken any action, or suffered any event to occur, of the type described in Section 7.01(g); or

(iii) which, consistent with the Credit and Collection Policy, would be written off the relevant Seller’s books as uncollectible within less than 91 days from the original due date for payment thereon.

“Deferred Purchase Price” means the portion of the Purchase Price of Purchased Receivables purchased on any Purchase Date from a Seller other than Bombardier Motor exceeding the amount of the Purchase Price under Section 2.02 to be paid in cash. The obligations of the Purchaser in respect of the Deferred Purchase Price shall be evidenced by the Purchaser’s subordinated promissory note in the form of Exhibit A hereto.

“Deposit Account” means a post office box administered by a Deposit Account Bank and/or an account maintained at a Deposit Account Bank, in each case as described in Schedule I.

“Deposit Account Bank” means any of the banks holding one or more Deposit Accounts.

“Diluted Receivable” means that portion (and only that portion) of any Receivable (a) which is reduced or canceled as a result of (i) any defective, rejected or returned merchandise or services or any failure by the relevant Seller to deliver any merchandise or provide any services or otherwise to perform under the underlying Contract, (ii) any change in the terms of or cancellation of, a Contract or any cash discount, discount for quick payment or other adjustment by the relevant Seller which in any of the foregoing cases reduces the amount payable by the Obligor on the related Receivable (except any such change or cancellation resulting solely from the financial inability to pay or insolvency of the Obligor of such Receivable) or (iii) any set-off by an Obligor in respect of any claim by such Obligor as to amounts owed by it on the related Receivable (whether such claim arises out of the same or a related transaction or an unrelated transaction), (b) the maturity of which is extended more than once or for more than 30 days as permitted by Section 6.02(c), (c) which is, without duplication of the reductions or cancellations referred to in clause (a), subject to any specific dispute, offset, counterclaim or defense whatsoever (except the discharge in bankruptcy of the Obligor thereof or any stay or defense arising solely as a result of applicable insolvency law affecting the Obligor) or (d) which is otherwise reduced by action or consent of the relevant Seller; provided that Diluted Receivables are calculated assuming that all chargebacks are resolved in the Obligor’s favor.

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“Dilution” means, with respect to any Receivable, (a) the aggregate amount of any reductions or adjustments in the Outstanding Balance of such Receivable as a result of any defective, rejected, or returned merchandise or services or any cash discount, discount for quick payment or (b) other adjustment or setoff, except any adjustment or setoff resulting solely from the financial inability to pay or insolvency of the Obligor of such Receivable.

“Discount” means, in respect of each Purchase, [5]% of the Outstanding Balance of the Receivables that are the subject of such Purchase; provided, however, the foregoing Discount may be revised prospectively by request of all of the parties hereto to reflect changes in recent experience with respect to write-offs, timing and cost of Collections and cost of funds, provided that such revision is consented to by both of the parties (it being understood that each party agrees to duly consider such request but shall have no obligation to give such consent).

“Dollar Equivalent” means, as of any date, the amount obtained by applying the rate for converting currency into Dollars at the 10:00 a.m. U.S. Federal Reserve spot rate of exchange for that currency.

“Dollars” or “$” means dollars in the lawful currency of the United States.

“Eligible Receivable” means a Receivable:

(i) the Obligor of which has a billing address in the United States (including, without limitation, Puerto Rico), Canada, Finland, Norway or Sweden;

(ii) the Obligor of which is not an Affiliate of any of the Sellers;

(iii) which is not a Defaulted Receivable and the Obligor of which is not the Obligor of any Defaulted Receivables which in the aggregate constitute 10% or more of the aggregate Outstanding Balance of all Receivables of such Obligor;

(iv) which, according to the Contract related thereto, is required to be paid in full either (A) within 90 days of the original billing date therefor or (B) with respect to Receivables originated by the Nordtrac Group, within not more than the lesser of (x) 180 days from the original billing date therefor and (y) the number of days from the original billing date related thereto to and including the first Business Day in the succeeding month of April;

(v) which is an obligation representing all or part of the sales price of merchandise or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and the nature of which is such that its purchase with the proceeds of notes would constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

(vi) which (A) in the case of a Receivable originated by Bombardier Motor, is an “account” or “chattel paper” within the meaning of Article 9 of the UCC of the applicable jurisdictions governing the perfection of the sale or assignment of such Receivable and (B) in the case of a Receivable originated by the Parent, is an “account” or “chattel paper” within the meaning of the PPSA;

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(vii) which (A) in the case of a Receivable originated by Bombardier Motor is denominated and payable only in Dollars in the United States, (B) in the case of a Receivable originated by the Parent, is denominated and payable only in Dollars or Canadian Dollars in the United States or Canada and (C) in the case of a Receivable originated by the Nordtrac Group, is denominated in Swedish Kronor and payable only in Sweden, denominated in Norwegian Kroner and payable only in Norway or denominated in Euros and payable only in Finland;

(viii) which is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable and is not subject to any Adverse Claim other than Permitted Liens or any dispute, offset, counterclaim or defense whatsoever (except the potential discharge in bankruptcy of such Obligor), provided that if a specific dispute, offset, counterclaim or defense has been asserted in an amount less than the Outstanding Balance of such Receivable, the portion of such Receivable in excess of such asserted amount shall continue to be an Eligible Receivable (unless it fails to satisfy one of the other clauses of this definition of Eligible Receivable);

(ix) which, together with the invoice or purchase order related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Contract related thereto is in violation of any such law, rule or regulation in any material respect;

(x) which arises under a Contract which does not contain a legally enforceable provision requiring the Obligor under such Contract to consent to the transfer, sale or assignment of the right to payment thereunder unless a written consent of the Obligor has been obtained;

(xi) which was generated in the ordinary course of the relevant Seller’s business;

(xii) which, at the time of the transfer of such Receivable under this Agreement, has not been extended, rewritten or otherwise modified from the original terms thereof except in accordance with Section 6.02(c) but nevertheless in all cases subject to being classified as a Diluted Receivable in accordance with the definition thereof;

(xiii) the transfer, sale or assignment of which does not contravene any applicable law, rule or regulation;

(xiv) which satisfies all applicable requirements of the Credit and Collection Policy;

(xv) as to which, at or prior to the later of the date of this Agreement and the date five Business Days before such Receivable is created, the Purchaser or its assignee has not notified the relevant Seller that such Receivable is no longer acceptable for

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purchase hereunder because (A) the relevant Obligor is in default under the terms of another financing arrangement with BCI or BCL, (B) the relevant Obligor has applied for credit from BCI or BCL for an equipment or inventory based financing arrangement and BCI or BCL has declined to provide such credit in accordance with BCI’s or BCL’s customary credit policies in effect at such time provided that this clause (B) shall not apply to (1) any refusal by BCI or BCL to increase the level of credit made available to an Obligor to which BCI or BCL is then already extending credit, (2) any determination by BCI or BCL not to extend credit for any snowgrooming equipment financing arrangement due to insufficient manufacturer recourse being offered to support such arrangement or (3) any Obligors specifically listed on Schedule III hereto, (C) such Obligor is party to one or more separate financing arrangements with BCI or BCL and is then in excess of the credit limit for such Obligor established by BCI or BCL for such Obligor in accordance with BCI’s or BCL’s customary credit policies in effect at such time, provided that an Obligor which is a Johnson/Evinrude dealer shall not be deemed to have exceeded such credit limit to the extent attributable to Receivables arising from the sale of parts, clothing and accessories, or (D) the relevant Obligor has been required to wind down or liquidate any separate financing arrangements with BCI or BCL, it being understood and agreed that from and after the time a Receivable is rendered ineligible by means of this clause (xv), all further receivables of such Obligor will be deemed to be Excluded Receivables;

(xvi) as to which the relevant Seller has satisfied and fully performed all obligations required to be fulfilled by it (as evidenced by an invoice or other statement) and the amount of such Receivable (as evidenced by said invoice or other statement) is not subject to any requirement that funds be reimbursed in the event of cancellation of the relevant Contract;

(xvii) the related invoice of which complies with Section 5.01(i)(iv) hereof to the extent applicable to such invoice;

(xviii) which is not a “restocking” charge, order cancellation fee or other fee (other than Finance Charges) charged to Obligors; and

(xix) which is not a Receivable of the type described in clauses (g)(iii) or (j) of the definition of Excluded Receivable (without taking into account the time periods referred to therein).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“Euro” or “€” means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended.

“Event of Termination” has the meaning specified in Section 7.01.

“Excluded Receivable” means any of the following: (a) a receivable due to any Seller from any Person which, at the time such receivable is invoiced, is an Affiliate of any Seller; (b) a

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receivable due from an Obligor who, at the time such receivable arises, also sells goods and/or services to the relevant Seller, unless such Obligor has, at or prior to the time such receivable arises, waived in writing any right to setoff amounts due from the relevant Seller against such receivable due to such Seller; (c) a receivable which is payable in a currency other than Canadian Dollars, Dollars, Swedish Kronor, Norwegian Kroner or Euros; (d) a receivable which if it were a Receivable would be a Defaulted Receivable on the date of this Agreement; (e) a receivable which arises under a Contract which contains a provision prohibiting the transfer, sale or assignment of the relevant Seller’s right to receive payments thereunder or is subject to a statute, rule or regulation requiring the Obligor thereunder to consent to the transfer, sale or assignment of the rights of the relevant Seller to receive payments thereunder, unless consent to the sale contemplated hereby has been obtained; (f) any receivable containing a confidentiality provision which would restrict performance contemplated by this Agreement, where an appropriate consent or waiver thereunder has not been obtained; (g) any receivable owing (i) by the Federal Government of Canada or any federal agency or federal Crown corporation, (ii) by the Federal Government of the United States, unless the relevant Seller has, at its expense, to the Purchaser’s satisfaction, taken all steps to comply with the Federal Assignment of Claims Act of 1940, as amended, and any other applicable law necessary to effect the transfer of such receivable to the Purchaser and (iii) by any other Governmental Body, unless the relevant Seller, at its expense, has obtained, to the satisfaction of the Purchaser, all consents required by the terms of the relevant Contract with such Governmental Body (whether or not such consent requirement is enforceable) and otherwise complied with any applicable law necessary to effect the transfer of such receivable to the Purchaser hereunder so long as the relevant Seller can separately track and segregate such receivable with respect to consent and compliance requirements, provided that any such receivable originated after sixty (60) days from the date of this Agreement whether or not separately tracked and segregable shall be an Excluded Receivable; (h) any receivable under a Contract in respect of which a specific dispute has arisen as of the time of transfer; (i) in the case of any Receivable originated by the Parent or Bombardier Motor, the Obligor has a billing address outside the United States or Canada and the Receivable is payable in a currency other than Canadian Dollars or Dollars; (j) any receivable to the extent it is paid immediately against presentation of the relevant invoice by a charge against the Obligor’s credit card, so long as the Seller is able to separately track and segregate such receivable, provided that any such credit card receivable originated after ninety (90) days from the date of this Agreement, whether or not separately tracked and segregable, shall be an Excluded Receivable; (k) any receivable that is paid by deduction against a cash advance previously paid to the relevant Seller, (1) any Receivable of a member of the Nordtrac Group where the Obligor is a natural person, sole proprietorship or general partnership unless otherwise approved by Purchaser, acting reasonably or (m) any receivable which is subject to any dealer floorplanning financing arrangement.

“Facility” means the commitment of the Purchaser to make Purchases of Receivables from the Sellers from time to time pursuant to the terms of this Agreement.

“Facility Termination Date” means the earliest of (i) June 18, 2005, (ii) the date of termination of the Facility pursuant to Section 7.01 and (iii) the date which any Seller designates by at least five Business Days’ notice to the Purchaser.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds

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transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Operating Agent (as such term is defined in the Sale Agreement) from three Federal funds brokers of recognized standing selected by it.

“Finance Charge” means, with respect to any Receivable, any interest or charges owing by an Obligor in connection with such Receivable not having been paid on the due date thereof.

“Fiscal Month” means a period beginning at the close of business on the last Friday of any calendar month and ending at the close of business on the last Friday of the succeeding calendar month, provided that if any such Friday is not a Business Day, such period shall begin and/or end (as applicable) at the close of business on the preceding Business Day and provided further that in any calendar month which is also a quarter end, the close of business on the last Business Day of such month rather than the last Friday of such month shall be used to begin and end the relevant Fiscal Months.

“General Trial Balance” of any Seller on any date means such Seller’s accounts receivable trial balance (whether in the form of a computer printout, magnetic tape or diskette) on such date, listing Obligors and the Receivables respectively owed by such Obligors on such date together with the aged Outstanding Balances of such Receivables, in form and substance satisfactory to the Purchaser.

“Governmental Body” means any federal, state, provincial, regional, municipal, local or other governmental or administrative authority, bureau, agency or regulatory body.

“GST” means all goods and services tax payable under Part IX of the Excise Tax Act (Canada), all QST and all harmonized sales tax in the Provinces of Nova Scotia, Newfoundland and New Brunswick payable under the Excise Tax Act (Canada), as such statutes may be amended, modified, supplemented or replaced from time to time, including any successor statute.

“Incipient Bankruptcy Event of Termination” means an event under Section 7.01(g) which but for notice or lapse of time or both would constitute an Event of Termination.

“Incipient Event of Termination” means an event that but for notice or lapse of time or both would constitute an Event of Termination.

“Indebtedness for Borrowed Money” means any obligation (whether present or future, actual or contingent, secured or unsecured, as principal, surety or otherwise) of a Person for the payment or repayment of money borrowed or raised (whether or not for cash consideration), by whatever means, including obligations under or in respect of (a) deposits and financial leasing; (b) any letter of credit securing financial accommodation; (c) promissory notes, certificates of deposit or like instruments (whether negotiable or otherwise); (d) acceptance credit, note purchase or bill acceptance or discounting facilities; or (e) like arrangements entered into by any Person in order to enable it to finance its operations or capital requirements; but excluding reimbursement obligations in respect of advance payments made by or on behalf of third party customers in relation to purchase orders of the Parent or to one of its Subsidiaries.

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“Indemnified Amounts” has the meaning specified in Section 8.01.

“Monthly Seller Report” means a monthly report, in form and substance satisfactory to the Purchaser and the Sellers, furnished by the Parent Servicer to the Purchaser pursuant to Section 6.02(b).

“Nordtrac Group” means, collectively, Bombardier Nordtrac AB, Bombardier Nordtrac AS and Bombardier-Nordtrac Oy.

“Norwegian Kroner” means the lawful currency of Norway.

“Obligor” means a Person obligated to make payments to any Seller pursuant to a Contract.

“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof plus Finance Charges; provided, that to the extent that the amount of any Receivables is, under the terms of the applicable Contract, expressed in Canadian Dollars, Swedish Kronor, Norwegian Kroner or Euros, such amount for the purposes of this definition shall be the Dollar Equivalent thereof at the relevant time. GST, PST, VAT and United States sales taxes which may be billed in connection with a Receivable are included in the Outstanding Balance. Finance Charges which may be billed in connection with a Receivable originated by the Parent are not included in the Outstanding Balance.

“Parent” means Bombardier Recreational Products Inc., a Canadian corporation.

“Parent Servicer” means at any time the Servicer then authorized pursuant to Section 6.01 to perform the duties of the Parent Servicer.

“Permitted Liens” means:

(i) liens for taxes (including withholding taxes) and source deductions imposed by statutes, in each case, which are not yet due and delinquent or are being contested in good faith and for which the Person owing such taxes or source deductions has taken an adequate reserve in accordance with applicable generally accepted accounting principles; and

(ii) with respect to the Parent only, liens arising out of judgements or awards with respect to which appeals or other proceedings for review are being prosecuted in good faith and for the payment of which adequate reserves have been provided as required by applicable generally accepted accounting principles.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“PPSA” means, with respect to any jurisdiction in Canada, the personal property security or similar legislation applicable in such jurisdiction, including with respect to the jurisdictions of

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Canada other than Quebec, the Personal Property Security Act applicable in such jurisdictions, in each case as from time to time in effect.

“PST” means all taxes payable under the Retail Sales Tax Act (Ontario) or any similar statute of another jurisdiction of Canada, other than GST and QST.

“Purchase” means a purchase by the Purchaser of Receivables from any Seller pursuant to Article II and includes the assignment and transfer of a Receivable created after the date of initial Purchase pursuant to Section 2.02(a)(ii)(y).

“Purchase Date” means each day on which a Purchase is made pursuant to Article II and includes the date of creation of each Receivable assigned and transferred pursuant to Section 2.02(a)(ii)(y).

“Purchase Price” for any Purchase means an amount equal to the Outstanding Balance of the Receivables that are the subject of such Purchase as set forth in the applicable Seller’s General Trial Balance, minus the Discount for such Purchase.

“Purchased Receivable” means any Receivable which is purchased by the Purchaser pursuant to Section 2.02.

“QST” means the tax payable under the Act Respecting the Quebec Sales Tax, R.S.Q.c.T-01, as amended.

“Receivable” means

(a) in the case of Bombardier Motor, all existing and hereafter arising indebtedness of an Obligor (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to Bombardier Motor under a Contract created, generated or arising in the ordinary course of the business of Bombardier Motor of selling or providing goods and services under the name of or in connection with its activities as conducted through its Utility Vehicles Division or its Outboard Engine Division, including the right to the payment of Finance Charges and other obligations of such Obligor with respect thereto;

(b) in the case of a Seller that is a member of the Nordtrac Group, all existing and hereafter arising indebtedness of an Obligor (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to such Seller under a Contract created, generated or arising in the ordinary course of the business of the Seller of selling or providing goods and services, including the right to the payment of Finance Charges and other obligations of such Obligor with respect thereto;

(c) in the case of the Parent,

(i) all existing and hereafter arising indebtedness of an Obligor (including, without limitation, a claim, account, book debt, receivable,

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instrument, installment sales contract, chattel paper or general intangible) to the Parent under a Contract:

(A) (x) created, generated or arising in the ordinary course of the business of Bombardier Inc. of selling or providing goods and services under the name of or in connection with the activities conducted through its Utility Vehicles Division or its Outboard Engine Division and (y) acquired by the Parent (or any predecessor of the Parent) from Bombardier Inc.; or

(B) created, generated or arising in the ordinary course of the business of the Parent of selling or providing goods and services under the name of or in connection with its activities as conducted through its Utility Vehicles Division or its Outboard Engine Division; or

(ii) all existing and hereafter arising indebtedness of John Deere Inc. (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to the Parent under a Contract:

(A) (x) between John Deere Inc. and Bombardier Inc. created, generated or arising in the ordinary course of the business of Bombardier Inc. of selling or providing goods and services to John Deere Inc. and (y) acquired by the Parent (or any predecessor of the Parent) from Bombardier Inc.; and

(B) between John Deere Inc. and the Parent created, generated or arising in the ordinary course of the business of the Parent of selling or providing goods and services to John Deere Inc.; and

in the case of (i) and (ii), including the right to the payment of all obligations of such Obligor with respect thereto but excluding Finance Charges payable under the related Contract but including PST and GST payable under the related Contract;

provided, however, that the term “Receivable” shall not include any Excluded Receivable. For greater clarity, it is understood and agreed that any distinct new line of business added to any of the businesses of a Seller referenced in the prior sentence after the date hereof shall not give rise to a Receivable, unless otherwise agreed in writing by the Sellers, the Purchaser and its assignee and all filings considered necessary or advisable in the reasonable judgment of the Purchaser or its assignee are made.

“Related Security” means with respect to any Receivable:

(i) all of the relevant Seller’s interest in any goods (including returned goods) relating to any sale giving rise to such Receivable;

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(ii) all security interests or Adverse Claims and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements or registration applications filed against an Obligor describing any collateral securing such Receivable;

(iii) all guaranties, insurance, letters of credit and other agreements or arrangements (including rights under credit card agreements) of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise; and

(iv) the related invoices and purchase orders issued pursuant to a related Contract and all other books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

“Sale Agreement” means that certain Receivables Purchase Agreement, dated as of the date hereof, among the Purchaser, as seller, BCI, as initial investor and operating agent, and the Sellers, as originators and servicers, as amended or restated from time to time.

“Sellers” means those Persons identified as Sellers in the preamble to this Agreement.

“Seller Report” means the Monthly Seller Report and/or the Weekly Seller Report.

“Servicers” means at any time the Person or Persons then authorized pursuant to Section 6.01 to service, administer and collect Transferred Receivables, including the Parent Servicer.

“Servicer Bankruptcy Event” means a proceeding of the type described in Section 7.01(g) instituted by or against any Servicer (without giving effect to any grace period provided therein).

“Servicer Fee” has the meaning specified in Section 6.03.

“Settlement Date” means the fifth Business Day prior to the end of each Fiscal Month or such other day as determined by the mutual agreement of the Sellers, the Purchaser and the Servicers.

“Subsidiary” means any corporation or other entity or Person of which securities having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Purchaser or one or more Sellers, as the case may be, or one or more Subsidiaries, or by the Purchaser or one or more Sellers, as the case may be, and one or more Subsidiaries.

“Swedish Kronor” means the lawful currency of Sweden.

“Transferred Receivable” means a Purchased Receivable.

“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

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“Undertakings” has the meaning assigned to that term in the Sale Agreement.

“VAT” means any value added tax payable on Receivables originated by the Nordtrac Group.

“Weekly Seller Report” means a weekly report, in form and substance satisfactory to the Purchaser and the Sellers, furnished by the Parent Servicer to the Purchaser pursuant to Section 6.02(b).

SECTION 1.02. Other Terms. Subject to the following sentence, all accounting terms not specifically defined herein shall be construed in accordance with U.S. generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

ARTICLE II

AMOUNTS AND TERMS OF PURCHASES

SECTION 2.01. Facility. On the terms and conditions hereinafter set forth and without recourse to the Sellers (except to the extent specifically provided herein), each Seller shall sell to the Purchaser all Receivables originated by it from time to time and the Purchaser shall purchase from such Seller all such Receivables from time to time, in each case during the period from the date hereof to the Facility Termination Date. In the event a Seller is removed as a party to the Sale Agreement pursuant to Section 2.01(d) thereof, such Seller shall cease to be a party hereto without being released from obligations accrued hereunder as of that time.

SECTION 2.02. Making Purchases.

(a) Initial Purchase. The Sellers shall give the Purchaser at least one Business Day’s written notice of the initial Purchase hereunder, which notice shall specify the date of such Purchase (which shall be a Business Day) and the proposed Purchase Price for such Purchase. On the date of such Purchase (i) each Seller (other than Parent) hereby sells, assigns and transfers to the Purchaser and the Purchaser hereby purchases from such Seller all such Seller’s right, title and interest in and to all Receivables originated by such Seller and existing at the close of business on December 12, 2003, together with all Related Security and Collections with respect to such Receivables and (ii) the Parent hereby sells, assigns and transfers to the Purchaser and the Purchaser hereby purchases from the Parent all of the Parent’s right title and interest in and to the universality of (x) all Receivables of the Parent existing at the close of business on December 12, 2003 and (y) all Receivables of the Parent created on or after December 13, 2003, in each case with all Related Security and Collections with respect to such Receivables. The Purchaser shall, upon satisfaction of the applicable conditions set forth in Article III, pay the Purchase Price for the portion of such Purchase in the manner provided in Section 2.02(c).

(b) Subsequent Purchases. On each Business Day following the initial Purchase, each Seller (other than the Parent) hereby sells and assigns to the Purchaser and the Purchaser hereby purchases from such Seller, upon satisfaction of the applicable conditions set forth in Article III, all of such Seller’s right, title and interest in and to all Receivables originated by such Seller which, together with the Related Security and all Collections with respect to such

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Receivables, have not previously been sold to the Purchaser without any furthur action or delivery of any further documentation. On or within five Business Days after the date of each such Purchase, the Purchaser shall pay the Purchase Price for such Purchase in the manner provided in Section 2.02(c).

(c) Payment of Purchase Price. The Purchase Price for each Purchase shall be paid on or within five Business Days after the Purchase Date therefor by means of any one or a combination of the following: (i) a deposit in same day funds to an account designated by the Parent as agent for the Sellers who hereby appoint the Parent to act as their agent for the purpose of receiving such payments and remitting the proceeds thereof to the relevant Sellers or (ii) (x) in the case of Bombardier Motor, an increase in the value of its equity investment in the Purchaser (with the Purchaser hereby agreeing to account for such portion of the Purchase Price owed to Bombardier Motor in such manner) and (y) in the case of the Parent and the members of the Nordtrac Group, an increase in the Deferred Purchase Price (subject at all times to the limitations contained in the definition thereof), as evidenced by a subordinated note of the Purchaser in the form of Exhibit A hereto payable to the order of the relevant Seller (other than Bombardier Motor). No portion of any Purchase Price due Bombardier Motor shall be paid by the Deferred Purchase Price. The allocation of the Purchase Price as among such methods of payment shall be pro rata in respect of the cash payable to the Sellers in accordance with the Outstanding Balance of the Eligible Receivables of each Seller comprising a portion of the relevant Purchase, unless otherwise agreed among the Sellers. The Purchase Price for all Receivables shall be payable in Dollars.

(d) Ownership of Receivables and Related Security. On each Purchase Date, after giving effect to the Purchase on such date, the Purchaser shall own all Receivables of the Sellers as of such date (including Receivables which have been previously sold to the Purchaser hereunder). The Purchase of any Receivable shall include all Related Security and Collections with respect to such Receivable.

(e) Undertaking to Reassign. The Parent and the Purchaser agree that all Purchases of Receivables, Related Security and Collections by the Purchaser from the Parent shall cease on and as of the Facility Termination Date and for the foregoing purposes the Purchaser hereby agrees that upon the Facility Termination Date it shall assign, transfer and convey to the Parent all of the Purchaser’s right, title and interest in and to all Receivables (and the Related Security, Collections and proceeds thereof) that are created after the Facility Termination Date and to execute and deliver such documents and take such action that may be necessary or advisable in order to fully evidence and render opposable to third parties such reassignment.

SECTION 2.03. Collections. (a) Unless otherwise agreed, the Parent Servicer shall, on each Settlement Date, deposit into an account of the Purchaser or the Purchaser’s assignee all Collections of Transferred Receivables then held by the Servicers. The Parent Servicer shall be responsible for the application of all Collections then held by any Servicer in accordance with the preceding sentence on a Dollar Equivalent basis but may accomplish such application itself or jointly with one or more of the other Servicers.

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(b) In the event that any Seller believes that collections which are not Collections of Transferred Receivables have been deposited into an account of the Purchaser or the Purchaser’s assignee, such Seller shall so advise the Purchaser and, on the Business Day following such identification, the Purchaser shall remit, or shall cause to be remitted, all collections so deposited which are identified, to the Purchaser’s satisfaction, not to be Collections of Transferred Receivables to such Seller.

(c) On each Settlement Date, the Purchaser shall pay to the relevant Seller accrued interest on the Deferred Purchase Price and the Purchaser may, at its option, prepay in whole or in part the principal amount of such Deferred Purchase Price and/or make equity distributions to Bombardier Motor; provided that each such payment shall be made solely from (i) Collections of Transferred Receivables after all other amounts then due from the Purchaser under the Sale Agreement have been paid in full and all amounts then required to be set aside by the Purchaser or the Parent Servicer under the Sale Agreement have been so set aside or (ii) excess cash flow from operations of the Purchaser which is not required to be applied to the payment of other obligations of the Purchaser; and provided further, that no such payment shall be made at any time when an Event of Termination shall have occurred and be continuing or would result, subject to the following sentence. At such time following the Facility Termination Date when all Capital, Yield and other amounts owed by the Purchaser under the Sale Agreement shall have been paid in full, the Purchaser shall apply all Collections of Transferred Receivables received by the Purchaser pursuant to Section 2.03(a) (and not previously distributed) first to the payment of accrued interest on the Deferred Purchase Price, and then to the reduction of the principal amount of the Deferred Purchase Price, such payments to be made to the Parent for the benefit of each relevant Seller, and/or to make equity distributions to Bombardier Motor.

SECTION 2.04. Settlement Procedures. (a) If on any day a Transferred Receivable becomes (in whole or in part) a Diluted Receivable, the Seller which sold such Receivable to the Purchaser shall be deemed to have received on such day a Collection of such Transferred Receivable in the amount of such Diluted Receivable. If such Seller is not a Servicer, such Seller shall pay to the Servicer of Transferred Receivables transferred by such Seller on or prior to the next Settlement Date all amounts deemed to have been received pursuant to this subsection, provided, that, so long as an Event of Termination has not occurred and is not continuing, such Seller shall have no obligation to make any payment in respect of deemed Collections so long as the sum of the Receivable Interests (as defined in the Sale Agreement), each expressed as a percentage, shall continue to be less than or equal to the Maximum Purchaser Interest (as defined in the Sale Agreement).

(b) Upon discovery by any Seller or the Purchaser of a breach of any of the representations and warranties made by such Seller in Section 4.01(i) with respect to any Transferred Receivable, such party shall give prompt written notice thereof to the Purchaser or the relevant Seller, as the case may be, as soon as practicable and in any event within three Business Days following such discovery. Such Seller shall, upon not less than two Business Days’ notice from the Purchaser or its assignee or designee, repurchase such Transferred Receivable on the next succeeding Settlement Date for a repurchase price equal to the Outstanding Balance of such Transferred Receivable. Each repurchase of a Transferred Receivable shall include the Related Security with respect to such Transferred Receivable. The

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proceeds of any such repurchase shall be deemed to be a Collection in respect of such Transferred Receivable. If such Seller is not a Servicer, such Seller shall pay to the Servicer of Transferred Receivables transferred by such Seller on or prior to the next Settlement Date the repurchase price required to be paid pursuant to this subsection.

(c) Except as stated in subsection (a) or (b) of this Section 2.04 or as otherwise required by law or the underlying Contract, all Collections from an Obligor of any Transferred Receivable shall be applied to the Receivables of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables.

(d) Deemed collections with respect to any Transferred Receivable payable by any Seller under this Section 2.04 shall be paid in Dollars.

SECTION 2.05. Payments and Computations, Etc. (a) All amounts to be paid or deposited by the Sellers or any Servicer hereunder shall be paid or deposited no later than 11:00 A.M. (New York City time) on the day when due in same day funds to an account or accounts designated by the Purchaser from time to time, which accounts, during the existence of the Sale Agreement, shall be those set forth in the Sale Agreement.

(b) Each Seller shall, to the extent permitted by law, pay to the Purchaser interest on any amount not paid or deposited by such Seller (whether as Servicer or otherwise) when due hereunder at an interest rate per annum equal to 4.00% per annum above the Alternate Base Rate, payable on demand.

(c) Other than as set forth in Section 2.05(d), all computations of interest and all computations of fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

(d) For purposes of the Interest Act (Canada), where in this Agreement a rate of interest is to be calculated on the basis of a period of less than one year, the yearly rate of interest to which the said rate is equivalent is the said rate divided by the actual number of days in the period for which such calculation is made and multiplied by 365 days (or 366 days in the case of a leap year).

SECTION 2.06. Cutoff Date. Notwithstanding the date of this Agreement, the initial Purchase hereunder shall apply to, and the initial Monthly Seller Report to be provided shall be calculated with respect to, all Receivables and Related Security outstanding at the close of business on December 12, 2003. All Collections in respect thereof received after December 12, 2003 shall be subject to this Agreement.

SECTION 2.07. Payments Free and Clear of Taxes, Etc.

(a) Any and all payments required to be made by the Parent, Bombardier Nordtrac AB, Bombardier Nordtrac AS or Bombardier-Nordtrac Oy hereunder shall be made

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free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of the Purchaser or its assigns, taxes imposed on its income by the United States (other than withholding taxes), and franchise taxes and net income taxes (or equivalent taxes computed under alternative methods, at least one of which is based on net income) imposed on it by the jurisdiction under the laws of which the Purchaser or its assigns (as the case may be) is organized or by any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Parent, Bombardier Nordtrac AB, Bombardier Nordtrac AS or Bombardier-Nordtrac Oy shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to (or for the benefit of) the Purchaser or its assigns, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Purchaser or its assigns (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Parent, Bombardier Nordtrac AB, Bombardier Nordtrac AS or Bombardier-Nordtrac Oy, as applicable, shall make such deductions and (iii) the Parent, Bombardier Nordtrac AB, Bombardier Nordtrac AS or Bombardier-Nordtrac Oy, as applicable, shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Parent agrees to pay any present or future stamp or other documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, other than U.S. federal or state taxes except for withholding taxes on interest (hereinafter referred to as “Other Taxes”).

(c) The Parent will indemnify the Purchaser or its assigns for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section, and excluding Taxes or Other Taxes resulting from the gross negligence or willful misconduct of the Purchaser or its assigns) paid by the Purchaser or its assigns (as the case may be) or deducted from any Collections (including any Taxes or amounts on account of Taxes deducted by any Obligor) and any 1iability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date the Purchaser or its assigns (as the case may be) makes written demand therefor. A certificate as to the amount of such indemnification submitted to the Parent by the Purchaser or its assigns (as the case may be) setting forth, in reasonable detail, the basis for and the calculation thereof, shall be conclusive and binding for all purposes absent manifest error.

(d) Without prejudice to the survival of any other agreement of the Parent hereunder, the agreements and obligations of the Parent contained in this Section 2.07 shall survive any termination of this Agreement.

SECTION 2.08. True Sales. The Sellers and the Purchaser intend the transfers of Transferred Receivables, Related Security, and Collections hereunder to be absolute conveyances by the Sellers to the Purchaser that are absolute and irrevocable and that provide the Purchaser with the full benefits of ownership of the Transferred Receivables, Related Security,

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and Collections and (other than for U.S. tax purposes as described below) none of the Sellers nor the Purchaser intend the transactions contemplated hereunder to be, or for any purpose to be characterized as, loans from the Purchaser to any Seller. Without limiting or otherwise affecting the preceding sentence, for U.S. tax purposes, the transactions contemplated by this Agreement and the Sale Agreement will be treated as a financing by Bombardier Motor. The parties agree that the foregoing sales as between Bombardier Motor and the Purchaser of Transferred Receivables constitute sales of “accounts” as described in the UCC and that this Agreement shall create a security interest in favor of the Purchaser as the purchaser of the Transferred Receivables, Related Security, and Collections of Bombardier Motor. Notwithstanding such intent, if the arrangements with respect to the Transferred Receivables, Related Security, and Collections hereunder as between Bombardier Motor and the Purchaser are deemed for any purpose to constitute a loan and not a purchase and sale of such Transferred Receivables, Related Security and Collections, it is the intention of the parties hereto that this Agreement shall constitute as between Bombardier Motor and the Purchaser a security agreement under applicable law, and Bombardier Motor hereby grants to the Purchaser a first priority perfected security interest in all of Bombardier Motor’s right, title and interest, whether now owned or hereafter acquired by it, in, to and under the Transferred Receivables, Related Security, and Collections and all other proceeds thereof (other than proceeds paid or payable to, received or receivable by such Seller in consideration of the sale or transfer of such Transferred Receivables, Related Security and Collections to the Purchaser), to secure its obligations hereunder, including, without limitation, its obligation to remit to the Purchaser, or its successors and assigns, all Collections and other proceeds of the Transferred Receivables and Related Security.

ARTICLE III

CONDITIONS OF PURCHASES

SECTION 3.01. Conditions Precedent to Initial Purchase from the Sellers. The initial Purchase of Receivables from the Sellers hereunder or, in the case of the Parent, the right to receive the Purchase Price for the Receivables existing as of the time of the Purchase under Section 2.02(a)(ii), is subject to the conditions precedent that:

(a) The transactions contemplated by the Bombardier Inc. Purchase Agreement shall have been consummated on or before the date of such purchase; and

(b) The Purchaser shall have received on or before the date of such Purchase the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Purchaser:

(i) Certified copies of the resolutions of the Board of Directors of each of the Sellers approving this Agreement and certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement.

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(ii) A certificate of the Managing Director, Secretary or Assistant Secretary of each of the Sellers certifying the names and true signatures of the officers of such Seller authorized to sign this Agreement and the other documents to be delivered by it hereunder.

(iii) Acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing) of proper financing statements, duly filed on or before the date of the initial Purchase, naming each Seller as the seller/debtor and the Purchaser as the purchaser/secured party, or other similar instruments or documents, as the Purchaser may deem necessary or desirable under the UCC or the PPSA of all appropriate jurisdictions (other than the Province of Quebec) or other applicable law and copies of proper forms RG for registration under the laws of the Province of Quebec, in each case to perfect or render opposable the Purchaser’s ownership interest in the Transferred Receivables and Related Security and Collections with respect thereto.

(iv) Acknowledgment copies or time stamped receipt copies of proper financing statements, if any, necessary to release all security interests and other rights of any Person in the Transferred Receivables, Contracts or Related Security previously granted by any Seller including, (a) without limitation, the liens and charges currently registered with respect to Bombardier Nordtrac AB in Sweden and (b) UCC and other equivalent forms executed by the Bank of Montreal as Administrative Agent under the Seller’s bank credit facility.

(v) Completed requests for information, dated on or before the date of such initial Purchase, listing all effective financing statements filed in the jurisdictions referred to in subsection (iii) above that name any Seller as debtor, together with copies (except that copies will not be required for Canada) of such other financing statements (none of which shall cover any Transferred Receivables, Contracts or Related Security).

(vi) A favorable opinion or opinions of (i) Ropes & Gray LLP, U.S. counsel for the Sellers, (ii) Osler, Hoskin & Harcourt, LLP, Canadian counsel for the Parent and (iii) Advokatfirman Vinge KB, Thommessen Krefting Greve Lund AS Advokatfirma and Hannes Snellman Attorneys at Law Ltd., Swedish, Norwegian and Finnish counsel for the members of the Nordtrac Group, each in form and substance reasonably satisfactory to the Purchaser, as to such matters as the Purchaser may reasonably request.

(vii) An executed copy of each of the Deposit Account Agreements.

(viii) An executed copy of each of the Undertakings.

(ix) An executed copy of a Repurchase Agreement among BCL, BCI, the Purchaser, the Nordtrac Group and the Sellers in respect of the termination of BCLs financing of the Nordtrac Group’s Receivables.

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(x) A written notice from the Sellers in compliance with Section 2.02(a).

SECTION 3.02. Conditions Precedent to AH Purchases. Each Purchase (including the initial Purchase or, with respect to the Parent, the Purchaser’s obligation to pay the Purchase Price for the Purchase of Receivables existing as of the time of Purchase under Section 2.02(a)(ii) hereunder but excluding the Purchase of any Receivable of the Parent created thereafter) shall be subject to the further conditions precedent that:

(a) with respect to any such Purchase, on or prior to the date of such Purchase, the Parent Servicer shall have delivered to the Purchaser, in form and substance satisfactory to the Purchaser, all completed Seller Reports required to have been delivered pursuant to Section 6.02(b);

(b) the relevant Seller shall have marked its master data processing records evidencing the Receivables which are the subject of such Purchase with a legend, acceptable to the Purchaser, stating that such Receivables, the Related Security and Collections with respect thereto, have been sold in accordance with this Agreement;

(c) in the case of Purchased Receivables originated by the Nordtrac Group, such Purchased Receivable complies with Section 5.01(i)(iv);

(d) on the date of such Purchase the following statements shall be true (and the relevant Seller, by accepting the Purchase Price for such Purchase shall be deemed to have certified that):

(i) The representations and warranties contained in Sections 4.01 and 4.02 are correct in all material respects on and as of the date of such Purchase as though made on and as of such date, and

(ii) No event has occurred and is continuing, or would result from such Purchase, that constitutes an Event of Termination or an Incipient Event of Termination; and

(e) the Purchaser shall have received such other approvals, opinions or documents as the Purchaser may reasonably request in connection with any changes in law or factual circumstances occurring after the date of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Sellers. Each Seller represents and warrants as to itself as follows:

(a) Such Seller is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified to do business, and is in good standing (or, in the case of the Nordtrac Group, otherwise has

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proper authority to conduct business), in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not have a material adverse effect on (i) the interests of the Purchaser hereunder, (ii) the collectibility of the Transferred Receivables, or (iii) the ability of such Seller or a Servicer to perform their respective obligations hereunder.

(b) The execution, delivery and performance by such Seller of this Agreement and the other documents to be delivered by it hereunder, including such Seller’s sale of Receivables hereunder and such Seller’s use of the proceeds of Purchases, (i) are within such Seller’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) such Seller’s charter or by-laws, (2) any law, rule or regulation applicable to such Seller, (3) any contractual restriction binding on or affecting such Seller or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting such Seller or its property, and (iv) do not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties (except for the transfer of such Seller’s interest in the Transferred Receivables pursuant to this Agreement). This Agreement has been duly executed and delivered by such Seller.

(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Seller of this Agreement or any other document to be delivered by it hereunder, except for the filing of UCC financing statements which are referred to herein.

(d) This Agreement constitutes the legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms.

(e) Sales made by such Seller pursuant to this Agreement will constitute a valid sale, transfer, and assignment of the Transferred Receivables to the Purchaser, enforceable against creditors of, and purchasers from, such Seller provided that the effect of the absence of any filing against Parent in Canada, other than in the Provinces of Quebec and Ontario and in the United States other than in the States of Illinois and Delaware and the District of Columbia as may be required by Quebec law prior to January 31, 2004 shall not constitute a breach of this representation. Such Seller shall have no remaining property interest in any Transferred Receivable.

(f) There is no pending or, to such Seller’s knowledge, threatened action, investigation or proceeding against such Seller or any of its subsidiaries before any court, governmental agency or arbitrator which is reasonably expected to materially adversely affect the ability of such Seller to perform its obligations under this Agreement, or which purports to affect the legality, validity or enforceability of this Agreement.

(g) No proceeds received by such Seller of any Purchase will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934.

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(h) No transaction contemplated hereby requires compliance with any bulk sales act, sale of an enterprise or similar law.

(i) Each Receivable characterized in any Seller Report as an Eligible Receivable is, as of the date of such Seller Report, an Eligible Receivable. Each Transferred Receivable is owned (immediately prior to its sale hereunder) by such Seller free and clear of any Adverse Claim (other than (i) Permitted Liens and (ii) any Adverse Claim arising solely as the result of any action taken by the Purchaser). When the Purchaser makes a Purchase it shall acquire valid and perfected first priority ownership of each Purchased Receivable and Collections with respect thereto provided that the effect of the absence of any filing against Parent in Canada, other than in the Provinces of Quebec and Ontario and in the United States other than in the States of Illinois and Delaware and the District of Columbia as may be required by Quebec law prior to January 31, 2004, shall not constitute a breach of this representation. No effective financing statement or other instrument similar in effect covering any Transferred Receivable, any Contract related thereto or Collections with respect thereto is on file in any recording office except such as may be filed in favor of Purchaser in accordance with this Agreement or in connection with any Adverse Claim arising solely as the result of any action taken by the Purchaser. The Parent, Bombardier Motor and the Nordtrac Group have complied with Section 5.01(i)(iv), and have not given any notice to any Obligor of the sale of any Purchased Receivables to any Person other than the Purchaser other than notices of sale, in the case of Bombardier Motor to Citibank, N.A. or the Nordtrac Group to BCL.

(j) Each Seller Report (if prepared by such Seller, or to the extent that information contained therein is supplied by such Seller), information, exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by such Seller to the Purchaser in connection with this Agreement is or will be accurate in all material respects as of its date or (except as otherwise disclosed to the Purchaser at such time) as of the date so furnished, and no such document contains or will contain any untrue statement of a material fact.

(k) The principal place of business, head office, and chief executive office of such Seller and the office where such Seller keeps its records concerning the Transferred Receivables are located at the address or addresses referred to in Section 5.01(b). Neither the Parent nor any member of the Nordtrac Group has any place of business in the United States.

(1) As of the date of this Agreement, such Seller is not known by and does not use any tradename or doing-business-as name.

(m) The Purchases of Transferred Receivables by such Seller to the Purchaser pursuant to this Agreement, and all other transactions between such Seller and the Purchaser, have been and will be made in good faith and without intent to hinder, delay or defraud creditors of such Seller. In the case of the Parent, it is not a bankrupt, an insolvent Person, in insolvent circumstances or on the eve of insolvency, or unable to meet its engagements, as applicable, and will not become an insolvent Person or be put in

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insolvent circumstances by entering into, or immediately after completion of the transactions contemplated by, this Agreement. In the case of Bombardier Motor, (i) the fair value of the property of Bombardier Motor is greater than the total amount of its liabilities, including contingent liabilities, (ii) the present fair salable value of the assets of Bombardier Motor is not less than the amount that will be required to pay all probable liabilities of Bombardier Motor on its debts as they become absolute and matured, (iii) Bombardier Motor does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay such debts and liabilities as they mature and (iv) Bombardier Motor is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which its property would constitute unreasonably small capital.

SECTION 4.02. Parent Warranties Regarding Receivables. The Parent represents and warrants to the Purchaser that on and as of the date of each Purchase by the Purchaser:

(a) the Parent has marked its master data processing records evidencing the Receivables which are the subject of such Purchase with a legend acceptable to the Purchaser, stating that such Receivables, the Related Security and Collections with respect thereto, have been sold in accordance with this Agreement;

(b) the following statements shall be true (and the Parent shall be deemed to have certified that):

(i) the representations and warranties as to itself contained in Section 4.01 are correct in all material respects on and as of the date of such Purchase as though made on and as of such date; and

(ii) no event has occurred and is continuing, or would result from such Purchase, that constitutes an Event of Termination or an Incipient Event of Termination.

ARTICLE V

COVENANTS

SECTION 5.01. Covenants of the Sellers. Each Seller covenants with respect to itself from the date hereof until the first day following the Facility Termination Date on which all of the Transferred Receivables are either collected in full or become Defaulted Receivables:

(a) Compliance with Laws, Etc. Such Seller will comply in all material respects with all applicable laws, rules, regulations and orders and preserve and maintain its corporate existence, rights, franchises, qualifications and privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and maintain such rights, franchises, qualifications, and privileges would not materially adversely affect the collectibility of the Transferred Receivables or the ability of such Seller to perform its obligations under this Agreement. In particular, but without limiting the generality of the foregoing, the Parent shall file all tax returns required by

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law to be filed by it with respect to the Transferred Receivables and shall promptly pay, remit or account for, as applicable, all sales taxes (including, without 1imitation, PST, VAT, QST and GST) paid or owing in connection with any Transferred Receivables, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with applicable generally accepted accounting principles shall have been set aside on its books.

(b) Offices, Records, Name and Organization. Such Seller will keep its principal place of business, domicile and chief executive office and the office where it keeps its records concerning the Transferred Receivables at the address of such Seller set forth under its name on Schedule II hereto or, upon 10 days’ prior written notice to the Purchaser, at any other locations within the United States, in the case of Bombardier Motor, Canada, in the case of the Parent, Sweden, in the case of Bombardier Nordtrac AB, Norway in the case of Bombardier Nordtrac AS, or Finland, in the case of Bombardier-Nordtrac Oy. Such Seller will not change its name or its jurisdiction of organization, unless (i) such Seller shall have provided the Purchaser with at least 10 days’ prior written notice thereof and (ii) no later than the effective date of such change, all actions required by Section 5.01(i) shall have been taken and completed. Such Seller also will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Transferred Receivables and related Contracts in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Transferred Receivables (including, without limitation, records adequate to permit the daily identification of each new Transferred Receivable and all Collections of and adjustments to each existing Transferred Receivable). Such Seller shall mark its master data processing records evidencing Transferred Receivables with a legend evidencing that such Transferred Receivables have been sold to the Purchaser hereunder.

(c) Performance and Compliance with Contracts and Credit and Collection Policy. Such Seller will, at its expense, timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts and comply and/or cause the Servicers or their subcontractors to timely and fully comply in all material respects with the Credit and Collection Policy in regard to each Transferred Receivable and the related Contract, in each case, where the failure to so perform and comply would adversely affect the collectibility of the Transferred Receivables.

(d) Sales, Liens, Etc. Except for the sales of Receivables contemplated herein, such Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or give notice to any Person of any such sale, assignment or disposition, or create or suffer to exist any Adverse Claim upon or with respect to, any Transferred Receivable, Contract, Related Security or Collections, or upon or with respect to any account to which any Collections of any Transferred Receivable are sent, or assign any right to receive income in respect thereof.

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(e) Extension or Amendment of Receivables. Except as provided in Section 6.02(c), such Seller will not extend, amend or otherwise modify the terms of any Transferred Receivable, or amend, modify or waive any term or condition of any Contract related thereto.

(f) Change in Business or Credit and Collection Policy. Such Seller will not change its business or make any change in the Credit and Collection Policy that would, in either case, materially adversely affect the collectibility of the Transferred Receivables or the ability of such Seller to perform its obligations under this Agreement.

(g) Deposits to Deposit Accounts. Until January 15, 2003 such Seller shall, and shall cause each Servicer (if it is the Parent or an Affiliate of the Parent) to, deposit all Collections which may be received by it or any Servicer in a Deposit Account, within no later than 2 Business Days (3 Business Days in the case of Collections received in Canada) after receipt, and thereafter no later than the next Business Day after such Seller or any Servicer learns or reasonably should have learned of such receipt. Such Seller will not deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Deposit Account cash or cash proceeds other than Collections of Transferred Receivables.

(h) Audits. Such Seller will, from time to time during regular business hours as reasonably requested by the Purchaser, permit the Purchaser, or its agents or representatives, (i) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of such Seller relating to Transferred Receivables and the Related Security, including, without limitation, the related Contracts, subject, however, to any confidentiality restrictions, and (ii) to visit the offices and properties of such Seller for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to Transferred Receivables and the Related Security or such Seller’s performance hereunder or under the Contracts relating to Transferred Receivables with any of the officers or employees of such Seller having knowledge of such matters. The foregoing rights shall be exercised at such reasonable time or times as will not interfere with the normal operations of such Seller. This Section 5.01(h) shall not inure to any assignee of the Purchaser.

(i) Further Assurances. (i) Such Seller agrees from time to time, at its expense, promptly to execute and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Purchaser or its assignee may reasonably request, to perfect, protect, make opposable or more fully evidence the Purchase of Receivables under this Agreement, or to enable the Purchaser or its assignee to exercise and enforce its respective rights and remedies under this Agreement. Without limiting the foregoing, such Seller will, upon the request of the Purchaser or its assignee, execute and file such financing or continuation statements, or amendments thereto, and such other instruments and documents, that may be necessary or desirable to perfect, protect or evidence such Transferred Receivables.

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(ii) Such Seller authorizes the Purchaser or its assignee to file financing or continuation statements, and amendments thereto and assignments thereof, relating to the Transferred Receivables and the Related Security, the related Contracts and the Collections with respect thereto.

(iii) Such Seller shall perform its obligations under the Contracts related to the Transferred Receivables to the same extent as if the Transferred Receivables had not been sold or transferred.

(iv) Each member of the Nordtrac Group will send notice of the sale hereunder to each Obligor of an outstanding Receivable originated by it no later than January 15, 2004, such notice to be in each case substantially in the form of notice appearing on Exhibit B hereto. Each member of the Nordtrac Group shall mark each invoice originated on and after January 15, 2004 related to a Receivable originated by it in a prominent place with a legend substantially in the form of Exhibit B hereto indicating that such invoice has been assigned to the Purchaser and is to be paid to a Deposit Account.

(j) Reporting Requirements. Such Seller (in the case of clauses (iii), (v), (vi) and (vii) below) and the Parent (in the case of clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) below) will provide to the Purchaser the following:

(i) as soon as available and in any event within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, an unaudited consolidated balance sheet of the Parent as of the end of such quarter and the related unaudited consolidated statements of income and statements of changes in financial position for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer of the Parent;

(ii) as soon as available and in any event within 120 days after the end of each fiscal year of the Parent, the audited consolidated balance sheet of the Parent as of the end of such fiscal year and the related statements of income and statements of changes in financial position for such fiscal year audited by independent public accountants of recognized standing;

(iii) promptly and in any event within five Business Days after the occurrence of each Event of Termination or Incipient Bankruptcy Event of Termination of which such Seller has knowledge, a statement of the chief financial officer of such Seller setting forth details of such Event of Termination or Incipient Bankruptcy Event of Termination and the action that such Seller has taken and proposes to take with respect thereto;

(iv) promptly after the sending or filing thereof, copies of all material information that the Parent sends to any of its securityholders, and copies of all public registration statements, annual information forms, prospectuses and similar

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offering materials that the Parent or any of its Subsidiaries files with the Securities and Exchange Commission or any securities exchange in Canada;

(v) promptly after the filing or receiving thereof, copies of all reports and notices that the Parent or any Affiliate files under ERISA with the Internal Revenue Service or the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or that the Parent or any Affiliate receives from any of the foregoing or from any multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to which the Parent or any Affiliate is or was, within the preceding five years, a contributing employer, in each case in respect of the assessment of withdrawal liability or an event or condition which could, in the aggregate, result in the imposition of liability on the Parent and/or any such Affiliate in excess of $5,000,000;

(vi) at least 10 days prior to any change in such Seller’s name, head office or chief executive office or such Seller’s jurisdiction of incorporation, a notice setting forth the new name, head office or chief executive office or jurisdiction of incorporation and the effective date thereof; and

(vii) such other information respecting the Transferred Receivables or relating to the performance by such Seller of its obligations hereunder, as the Purchaser may from time to time reasonably request.

Reports and financial statements required to be delivered pursuant to clauses (i), (ii) and (iv) of this Section 5.01(j) shall be deemed to have been delivered on the date on which the Parent posts such reports, or reports containing such financial statements, on the Parent’s website on the Internet or when such reports, or reports containing such financial statements, are posted on the SEC’s website at www.sec.gov; provided that the Parent shall deliver paper copies of the reports and financial statements referred to in clauses (i), (ii) and (iv) of this Section 5.01(j) to the Purchaser if the Purchaser requests the Parent to deliver such paper copies until written notice to cease delivering paper copies is given by the Purchaser.

(k) Separate Conduct of Business. Such Seller will: (i) maintain separate corporate records and books of account from those of the Purchaser; (ii) conduct its business from an office separate from that of the Purchaser (but which may be located in the same facility as the Purchaser); (iii) ensure that all oral and written communications, including without limitation, letters, invoices, purchase orders, contracts, statements and applications, will be made solely in its own name; (iv) have stationery and other business forms and a mailing address and a telephone number separate from those of the Purchaser; (v) not hold itself out as having agreed to pay, or as being liable for, the obligations of the Purchaser; (vi) not engage in any transaction with the Purchaser except as contemplated by this Agreement or as permitted by the Sale Agreement; (vii) continuously maintain as official records the resolutions, agreements and other instruments underlying the transactions contemplated by this Agreement; and (viii) disclose on its annual financial statements (A) the effects of the transactions

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contemplated by this Agreement in accordance with generally accepted accounting principles and (B) that the assets of the Purchaser are not available to pay its creditors.

(1) Filings. The Parent shall file proper forms RG in the Province of Quebec promptly following the Purchase under Section 2.02(a)(ii).

ARTICLE VI

ADMINISTRATION AND COLLECTION

SECTION 6.01. Designation of Servicers. The servicing, administration and collection of the Transferred Receivables shall be conducted by the Servicers so designated hereunder from time to time. Until the Purchaser or its assignee gives notice to the Sellers of the designation of a new Servicer in accordance with the provisions of the next sentence, (a) each Seller is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer in respect of Transferred Receivables originated by it pursuant to the terms hereof provided that the Parent Servicer will act as Servicer with respect to all Deposit Accounts maintained for the Nordtrac Group and (b) the Parent is hereby designated as, and hereby agrees to perform the duties and obligations of the Parent Servicer pursuant to the terms hereof. The Purchaser or its assignee may at any time after the occurrence and during the continuance of an Event of Termination or an Incipient Bankruptcy Event of Termination or a Servicer Bankruptcy Event designate, upon at least ten days prior written notice to the Servicers (unless such Servicer is in insolvency, bankruptcy or arrangement proceeding, in which case no such notice need be given), as Servicer any Person (including itself) to succeed all or any of the Servicers or any successor Servicer, if such Person shall consent and agree to the terms hereof. Any Servicer may, with the prior consent of the Purchaser (except that no consent is required if the subcontract is to another Seller), subcontract with any other Person or Persons (including a Seller or Sellers) for the servicing, administration or collection of Transferred Receivables. Any such subcontract shall not affect a Servicer’s liability for performance of its duties and obligations pursuant to the terms hereof, and any such subcontract shall terminate upon designation of a successor Servicer.

SECTION 6.02. Duties of Servicers. (a) Each Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Transferred Receivable originated by it from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy; provided, however, that the Servicers shall not be required (i) to perfect, render opposable, publish, make any filing or registration or take any other action for the purposes of perfecting or otherwise rendering opposable against any Person any reservation of ownership contained or provided for in any Contract or invoice relating to any Receivable originated by it or (ii) to perfect, render opposable, publish, make any filing or registration or take any other action under the laws of the domicile of any Obligor (other than Quebec, Ontario, Delaware, Illinois and the District of Columbia laws) for the purposes of perfecting or otherwise rendering opposable as against the Parent, or any third parties in relation to the Parent, the interests of the Purchaser in the Receivables, Related Security and Collections under this Agreement provided further that no later than January 31, 2004, the Parent Servicer shall effect filings contemplated by this clause (ii) in all other jurisdictions in the United States and Canada. The Purchaser hereby appoints the Servicers, from time to time designated pursuant to Section 6.01, as agent to enforce its

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ownership and other rights in the Transferred Receivables, the Related Security and the Collections with respect thereto. In performing its duties as Servicer, each Servicer shall exercise the same care and apply the same policies as it would exercise and apply if it owned the Transferred Receivables, except as otherwise provided herein.

(b) On the sixth Business Day before the end of each Fiscal Month, the Parent Servicer shall prepare and forward to the Purchaser (i) a Monthly Seller Report, relating to all then outstanding Transferred Receivables, and Collections with respect thereto, in each case, as of the close of business of the Parent Servicer on a day which is no more than five (5) calendar days prior to the delivery of such Monthly Report, provided that the first two (2) Monthly Seller Reports required after the initial Monthly Seller Report may be prepared as of six Business Days prior to the delivery of such Monthly Seller Report, and (ii) if requested by the Purchaser, a listing by Obligor of all Transferred Receivables. On the first Business Day of each week, the Parent Servicer shall prepare and forward to the Purchaser (i) a Weekly Seller Report relating to all then outstanding Transferred Receivables, and the Related Security and Collections with respect thereto, in each case, on the last Business Day of the immediately preceding week.

(c) If no Event of Termination or Incipient Bankruptcy Event of Termination shall have occurred and be continuing, but subject to Section 6.02(h), any Seller, while it is a Servicer (or while it is a subcontractor to a Servicer under Section 6.01), may, in accordance with the Credit and Collection Policy, (i) extend the maturity of any Transferred Receivable one time for up to 30 days or (ii) adjust the Outstanding Balance of any Transferred Receivable, in each case as such Seller deems appropriate to maximize Collections thereof; provided that if the maturity of any Transferred Receivable is extended more than once or for more than 30 days or the Outstanding Balance of any Transferred Receivable is reduced, such Transferred Receivable shall be classified as a Diluted Receivable; provided further that the classification of any such Transferred Receivable as a Defaulted Receivable shall not be affected by any such extension.

(d) Each Seller shall deliver to the Servicer that services such Seller’s Transferred Receivables, and such Servicer shall segregate and hold in trust for such Seller and the Purchaser in accordance with their respective interests, all documents, instruments and records (including, without limitation, computer tapes or disks) which evidence or relate to Transferred Receivables.

(e) Each Servicer shall as soon as practicable following receipt turn over to the relevant Seller any cash collections or other cash proceeds received with respect to Receivables not constituting Transferred Receivables.

(f) Each Servicer also shall perform the other obligations of “Servicers” set forth in this Agreement with respect to the Transferred Receivables serviced by such Servicer.

(g) No later than January 15, 2004, each Servicer will instruct the Obligors of the Transferred Receivables for which it is responsible to pay all Collections of such Transferred Receivables directly to a Deposit Account. Each Servicer shall deposit all Collections of Transferred Receivables received by it in a Deposit Account within the time called for by Section 5.01(g) and until it does so, shall segregate and hold such Collections in trust for, and as

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agent on behalf of, the Purchaser and its assignee. Servicers shall not deposit in or credit to any Deposit Account any cash or cash proceeds other than Collections of Transferred Receivables.

(h) Notwithstanding anything to the contrary contained herein, no Servicer (nor any Person to whom any Servicer delegates any of its responsibilities hereunder) shall (nor has authority to) enter into contracts or other agreements in the name of the Purchaser; and no Servicer (nor any such delegee) is permitted to (or has authority to) establish an office or other fixed place of business of the Purchaser in Canada, Finland, Norway or Sweden. To the extent any responsibilities of the Servicer hereunder involve or require such Person to enter into a contract or other agreement in the name of the Purchaser, such servicing responsibility shall be fulfilled solely by Bombardier Motor, and such Person is authorised to take such action, but only from a place of business outside Canada, Finland, Norway and Sweden, and such Person may not delegate such responsibility except upon consent of the Purchaser.

SECTION 6.03. Servicer Fee. The Purchaser shall pay to the Servicers (other than the Parent Servicer), so long as they are acting as Servicers hereunder, a periodic collection fee (the “Servicer Fee”) of 0.25% per annum on the average daily aggregate Outstanding Balance of the Transferred Receivables, payable to the Parent Servicer for distribution pro rata to all the applicable Servicers on each Settlement Date (or, if such day is not a Business Day, the immediately succeeding Business Day) or such other day during each calendar month as the Purchaser and the Parent Servicer shall agree. The Parent shall not be entitled to any Servicer Fee hereunder or under the Sale Agreement but agrees to sell the Receivables to be sold by it to the Purchaser hereunder on a fully serviced basis and shall accept as full compensation for its servicing duties hereunder and under the Sale Agreement the Purchase Prices (including the Deferred Purchase Prices) payable to it under this Agreement.

SECTION 6.04. Certain Rights of the Purchaser. At any time (i) following the designation of a Servicer other than a Seller pursuant to Section 6.01 or (ii) following and during the continuance of an Event of Termination or Incipient Bankruptcy Event of Termination or a Servicer Bankruptcy Event:

(a) The Purchaser may give notice of ownership and/or direct the Obligors of Transferred Receivables and any Person obligated on any Related Security, or any of them, that payment of all a mounts payable under any Transferred Receivable

shall be made directly to the Purchaser or its designee.

(b) At the Purchaser’s request and at the relevant Seller’s expense, such Seller and the relevant Servicer shall (A) assemble all of the documents, instruments and other records (including, without limitation, computer tapes and disks) that evidence or relate to the Transferred Receivables originated by the relevant Seller, and the related Contracts and Related Security, or that are otherwise necessary or desirable to collect such Transferred Receivables, and shall, subject to any confidentiality restrictions contained in such Contracts, make the same available to the Purchaser at a place selected by the Purchaser or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of such Transferred Receivables in a manner reasonably acceptable to the Purchaser and, promptly upon receipt, remit all such cash, checks and instruments, duly indorsed or with duly executed instruments of

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transfer, to the Purchaser or its designee. The Purchaser shall also have, upon its reasonable request, the right to make copies of all such documents, instruments and other records at any time.

(c) Each Seller authorizes the Purchaser to take any and all steps in such Seller’s name and on behalf of such Seller that are necessary or commercially reasonable, in the determination of the Purchaser, to collect amounts due under the Transferred Receivables, including, without limitation, endorsing such Seller’s name on checks and other instruments representing Collections of Transferred Receivables and enforcing the Transferred Receivables and the Related Security.

SECTION 6.05. Rights and Remedies. (a) If any Seller or any Servicer fails to perform any of its obligations under this Agreement, the Purchaser may (but shall not be required to), upon two Business Days’ prior notice to such Servicer if an Event of Termination or Incipient Bankruptcy Event of Termination shall then exist, and otherwise, upon 10 days’ prior notice to such Servicer, itself perform, or cause performance of, such obligation, and, if such Seller (as Servicer or otherwise) fails to so perform, the reasonable costs and expenses of the Purchaser incurred in connection therewith shall be payable by such Seller as provided in Section 8.01 or Section 9.04 as applicable.

(b) Each Seller shall perform all of its obligations under the Contracts related to the Transferred Receivables (insofar as such obligations relate to the Transferred Receivables) to the same extent as if such Seller had not sold Receivables hereunder and the exercise by the Purchaser of its rights hereunder shall not relieve such Seller from such obligations or its obligations with respect to the Transferred Receivables. The Purchaser shall not have any obligation or liability with respect to any Transferred Receivables or related Contracts, nor shall the Purchaser be obligated to perform any of the obligations of any Seller thereunder.

(c) Each Seller shall cooperate with the Servicers in collecting amounts due from Obligors in respect of the Transferred Receivables.

SECTION 6.06. Transfer of Records to Purchaser. Each Purchase of Receivables hereunder shall include the transfer to the Purchaser of the right to access and to use the records relating to such Receivables and in connection therewith, each Seller agrees to download from its computer system and distribute to Purchaser and its assignees all pertinent data and information in usable form as requested by the Purchaser or its assignees following an Event of Termination or Incipient Bankruptcy Event of Termination; provided, however, that such records shall include sufficient information to enable the Purchaser or its designee or a replacement Servicer to administer, collect and enforce the Transferred Receivables.

Each Seller shall take such action requested by the Purchaser, from time to time hereafter, that may be necessary or appropriate to ensure that the Purchaser has an enforceable ownership interest in the records relating to the Transferred Receivables and rights thereto.

In recognition of any Seller’s need to have access to the records transferred to the Purchaser hereunder, the Purchaser hereby grants to such Seller the irrevocable right to download, prepare, review and use all pertinent data and information in usable form as requested

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by the Seller, contained in such records in connection with any activity arising in the ordinary course of such Seller’s business or in performance of its duties as a Servicer, provided that (i) such Seller shall not disrupt or otherwise interfere with the Purchaser’s use of and access to such records during such license period and (ii) such Seller consents to the assignment and delivery of the records (including any information contained therein relating to such Seller or its operations) to any assignees or transferees of the Purchaser provided they agree to hold such records confidential.

ARTICLE VII

EVENTS OF TERMINATION

SECTION 7.01. Events of Termination. If any of the following events (“Events of Termination”) shall occur and be continuing:

(a) Any Servicer (i) shall fail to perform or observe any term, covenant or agreement under this Agreement (other than as referred to in clause (ii) or (iii) of this subsection (a)) and such failure shall remain unremedied for five Business Days or (ii) shall fail to make when due any payment or deposit to be made by it under this Agreement or (iii) shall fail to deliver any Seller Report when required and such failure shall remain unremedied for one Business Day; or

(b) Any Seller shall fail to make any payment required under Section 2.04(a) or 2.04(b) and such failure remains unremedied for one Business Day after such Seller obtains actual knowledge thereof or receives written notice from the Purchaser or the Purchaser’s assignee; or

(c) Any representation or warranty made or deemed made by any Seller (or any of its officers) under or in connection with this Agreement or any information or report delivered by any Seller pursuant to this Agreement shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered (unless either (i) such representation or warranty relates solely to one or more specific Transferred Receivables and such Seller pays a deemed Collection or repurchases such Transferred Receivables in accordance with Section 2.04(b) within two Business Days following the discovery of such breach of representation or warranty, or (ii) the breach of such representation or warranty is capable of being cured and is in fact cured (without any adverse impact on the Purchaser or its assignees or the collectibility of the Transferred Receivables) within five Business Days after the first date on which such Seller obtains actual knowledge or receives written notice of such breach from the Purchaser or its assignees); or

(d) Any Seller shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed and any such failure shall remain unremedied for 10 Business Days after written notice thereof shall have been given to such Seller by the Purchaser or its assignees; or

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(e) Any Seller (i) fails to pay at maturity or, in the event a period of grace is provided, within any such applicable period of grace, any payment with respect to Indebtedness for Borrowed Money or (ii) is in default under or fails to observe or perform any term, covenant or agreement contained in any agreement by which it is bound evidencing or securing Indebtedness for Borrowed Money and any grace period provided in such agreement to remedy such default or failure has expired if the effect of such default or failure is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness for Borrowed Money; provided, that there shall only be an Event of Termination under this Section 7.0 l(e) if the aggregate amount of Indebtedness for Borrowed Money which is not so paid and/or with respect to which such default or failure to observe or perform has occurred, exceeds U.S.$5,000,000 ( or the equivalent amount in other currencies) and provided further that no Event of Termination shall be deemed to have occurred under this Section 7.01(e) if the failure to pay or perform under the relevant agreement is waived, rescinded or annulled in writing by the relevant creditor(s); or

(f) Any Purchase of Receivables hereunder and the Collections with respect thereto shall for any reason cease to constitute valid and perfected ownership of such Receivables and Collections free and clear of any Adverse Claim (unless such defect in ownership relates solely to one or more specific Receivables and the Seller thereof either (i) cures such defect or (ii) pays a deemed Collection on account of such Receivables pursuant to Section 2.04, in each case within two Business Days after the first date on which such Seller obtains actual knowledge of such defect); or

(g) Any Seller shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Seller seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or arrangement of debts, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or any receiver, trustee, custodian, or other similar official for any Seller or for any substantial part of its property shall be appointed, whether under private right or pursuant to any such proceeding; or any Seller shall take any corporate action to authorize any of the actions set forth above in this subsection (g); or

(h) An “Event of Termination” shall have occurred under the Sale Agreement; or

(i) There shall have occurred any event which is reasonably expected to materially adversely affect the collectibility of the Transferred Receivables generally or

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the ability of any Seller to collect Transferred Receivables or otherwise perform its obligations under this Agreement (it being understood and agreed that (i) a downgrade in the Debt Rating of the Parent, alone and in and of itself, such shall not constitute a material adverse effect on the ability of the Parent to perform its obligations under this Agreement and (ii) any deterioration in the credit quality of the Obligors is not an event which may form the basis of an Event of Termination under this subsection (i)); or

(j) (i) the Parent or Bombardier Motor shall fail to make any payment required by its Undertaking when due, or (ii) the Parent or Bombardier Motor shall fail to perform or observe any other term, covenant or agreement contained in its Undertaking and such failure shall remain unremedied for 10 Business Days after written notice thereof shall have been given to the Parent or Bombardier Motor, as applicable, by the Purchaser or its designee, or (iii) either Undertaking shall be terminated, revoked or declared void or invalid or in any other manner ceases to exist;

then, and in any such event, the Purchaser may, by notice to the Sellers, take either or both of the following actions: (x) declare the Facility Termination Date to have occurred (in which case the Facility Termination Date shall be deemed to have occurred) and (y) designate another Person or Persons to succeed any or all Sellers as Servicer and Parent Servicer; provided, that, automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice) described in paragraph (g) of this Section 7.01, the Facility Termination Date shall occur, each Seller (if it is then serving as a Servicer) shall cease to be a Servicer, and the Purchaser (or its assigns or designees) shall become each Servicer and the Parent Servicer. Upon any such declaration or designation or upon such automatic termination, the Purchaser shall have, in addition to the rights and remedies under this Agreement, all other rights and remedies with respect to the Receivables provided after default under the UCC, the PPSA and under other applicable law, which rights and remedies shall be cumulative.

ARTICLE VIII

INDEMNIFICATION

SECTION 8.01. Indemnities by the Sellers. Without limiting any other rights which the Purchaser may have hereunder or under applicable law, each Seller hereby agrees to indemnify the Purchaser and its assigns and transferees (each, an “Indemnified Party”) from and against any and all claims, losses, liabilities, including reasonable attorneys’ fees (all of the foregoing being collectively referred to as “Indemnified Amounts”), awarded against or incurred by any Indemnified Party arising out of or as a result of this Agreement or the Purchase of any Transferred Receivables or in respect of any Transferred Receivable or any related Contract, including, without limitation, arising out of or as a result of:

(i) the inclusion, or purported inclusion, in any Purchase of any Receivable that is not an Eligible Receivable on the date of such Purchase, or the characterization in any Seller Report or other written statement made by or on behalf of such Seller of any Transferred Receivable as an Eligible Receivable which, as of the date of such Seller Report or other statement is not an Eligible Receivable;

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(ii) any representation or warranty or statement made or deemed made by such Seller (or any of its officers) under or in connection with this Agreement, which shall have been incorrect in any material respect when made;

(iii) the failure by such Seller to comply with any applicable law, rule or regulation with respect to any Transferred Receivable or the related Contract; or the failure of any Transferred Receivable or the related Contract to conform to any such applicable law, rule or regulation; or the failure by such Seller to pay, remit or account for any taxes (including PST, GST, VAT and United States sales taxes) related to or included in a Transferred Receivable when due;

(iv) the failure to vest in the Purchaser absolute ownership of the Receivables that are, or that purport to be, the subject of a Purchase under this Agreement and Collections in respect thereof, free and clear of any Adverse Claim;

(v) the failure of such Seller to have filed or sent, or any delay in filing or sending, financing statements, notices or other similar instruments or documents under the UCC, Quebec law or the PPSA of any applicable jurisdiction or other applicable laws with respect to any Receivables that are, or that purport to be, the subject of a Purchase under this Agreement and Collections in respect thereof, whether at the time of any Purchase or at any subsequent time; or the failure to have properly notified any Obligor of the transfer, sale or assignment of any Receivable pursuant to this Agreement and the Sale Agreement, to the extent such notice is required to perfect the same under Finnish law, Norwegian law or Swedish law; for purposes of this clause (v), “perfect” under Finnish law, Norwegian law and Swedish law means to render opposable, publish and allow the setting up of the purchaser’s interest in, and right to collect payment under, the assets which are the subject of such transfer, sale and assignment, and to make opposable, publish and allow the setting up of such transfer, sale and assignment as against Obligors and other third parties, including any trustee in bankruptcy; provided, however, that, for the purposes of this clause (v), “perfect” shall not include the actions referred to in clause (i) to the first proviso to the first sentence of Section 6.02;

(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable that is, or that purports to be, the subject of a Purchase under this Agreement (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), but only to the extent such Seller has not paid a deemed Collection on account of such Receivable pursuant to Section 2.04(a);

(vii) the inclusion as a Transferred Receivable in any Seller Report or other written statement made by or on behalf of such Seller of any receivable which is an Excluded Receivable as of the date of such Seller Report or other statement;

(viii) any products liability or other claim arising out of or in connection with merchandise or services which are the subject of any Contract relating to a Transferred Receivable;

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(ix) the commingling of Collections of Transferred Receivables by such Seller or a designee of such Seller, as Servicer or otherwise, at any time with other funds of such Seller or an Affiliate of such Seller;

(x) any investigation, litigation or proceeding (brought by a Person other than an Indemnified Party) related to this Agreement or the use of proceeds of Purchases or the ownership of Receivables, the Related Security, or Collections with respect thereto or in respect of any Receivable, Related Security or related Contract;

(xi) any failure of such Seller to perform and comply with its covenants and obligations contained in this Agreement;

(xii) any claim brought by any Person other than an Indemnified Party arising from any activity by such Seller or any Affiliate of such Seller in servicing, administering or collecting any Transferred Receivable;

(xiii) any failure by the Nordtrac Group to provide a notice to an Obligor required hereunder in respect of any Receivable;

(xiv) any Dilution with respect to any Transferred Receivable; or

(xv) any claim arising out of any failure by such Seller to obtain a consent from the relevant Obligor to the transfer, sale or assignment of any Transferred Receivable pursuant to this Agreement.

It is expressly agreed and understood by the parties hereto (i) that the foregoing indemnification is not intended to, and shall not, constitute a guarantee of the collectibility or payment, of the Transferred Receivables and (ii) that nothing in this Section 8.01 shall require any Seller to indemnify any Person (A) for Receivables which are not collected, not paid or uncollectible solely on account of the insolvency, bankruptcy, or financial inability to pay of the applicable Obligor, (B) for damages, losses, claims or liabilities or related costs or expenses to the extent resulting from such Person’s gross negligence or willful misconduct, or (C) for any income taxes or franchise taxes incurred by such Person arising out of or as a result of this Agreement or in respect of any Transferred Receivable or any Contract, other than to the extent the same arises as a result of a breach by a Servicer (if such Servicer is a Seller or an Affiliate thereof) of its obligations under Section 6.02(g).

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or consent to any departure by any Seller therefrom shall be effective unless in a writing signed by the Purchaser and, in the case of any amendment, also signed by the Sellers, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Purchaser to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single

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or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

SECTION 9.02. Notices, Etc. All notices and other communications hereunder shall, unless otherwise expressly stated herein, be in writing (which shall include facsimile communication) and be faxed or delivered, to each party hereto, at its address set forth under its name on Schedule II hereto or at such other address as shall be designated by such party in a written notice to the other parties hereto. Notices and communications by facsimile shall be effective when sent (and shall be followed by hard copy sent by regular mail), and notices and communications sent by other means shall be effective when received.

SECTION 9.03. Binding Effect; Assignability. (a) This Agreement shall be binding upon and inure to the benefit of the Sellers, the Purchaser, the Servicers and their respective successors and assigns; provided, however, that the Sellers and the Servicers may not assign their respective rights or obligations hereunder or any interest herein without the prior written consent of the Purchaser. In connection with any sale or assignment by the Purchaser of all or a portion of the Transferred Receivables, the buyer or assignee, as the case may be, shall, to the extent of its purchase or assignment, have all rights of the Purchaser under this Agreement (as if such buyer or assignee, as the case may be, were the Purchaser hereunder) except to the extent specifically provided in the agreement between the Purchaser and such buyer or assignee, as the case may be.

(b) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time, after the Facility Termination Date, when all of the Transferred Receivables are either collected in full or become Defaulted Receivables; provided, however, that rights and remedies with respect to any breach of any representation and warranty made by any Seller pursuant to Article IV and the provisions of Article VIII and Sections 9.04, 9.05 and 9.06 shall be continuing and shall survive any termination of this Agreement.

SECTION 9.04. Costs, Expenses and Taxes. (a) In addition to the rights of indemnification granted to the Purchaser pursuant to Article VIII hereof, each Seller jointly and severally agrees to pay on demand all reasonable costs and expenses of the Purchaser in connection with the preparation, execution and delivery of this Agreement and the other documents and agreements to be delivered hereunder, and any amendments or waivers hereof, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Purchaser with respect thereto and with respect to advising the Purchaser as to its rights and remedies under this Agreement following the occurrence of an Event of Termination or an Incipient Event of Termination, and each Seller jointly and severally agrees to pay all costs and expenses, if any (including reasonable counsel fees and expenses), in connection with the enforcement of this Agreement and the other documents to be delivered hereunder excluding, however, any costs of enforcement or collection of Transferred Receivables which are not paid on account of the insolvency, bankruptcy or financial inability to pay of the applicable Obligor.

(b) In addition, each Seller jointly and severally agrees to pay any and all stamp and other taxes and fees payable in connection with the execution, delivery, filing and recording of this Agreement or the other documents or agreements to be delivered hereunder,

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and each Seller agrees to save each Indemnified Party harmless from and against any liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.

SECTION 9.05. No Proceedings. Each Seller hereby agrees that it will not institute against, or join any other Person in instituting against, the Purchaser any proceeding of the type referred to in Section 7.01(g) so long as there shall not have elapsed one year plus one day since the later of (i) the Facility Termination Date and (ii) the date on which all of the Transferred Receivables are either collected in full or become Defaulted Receivables.

SECTION 9.06. Confidentiality. (a) Unless otherwise required by applicable law, each party hereto agrees to maintain the confidentiality of the terms of this Agreement in communications with third parties and otherwise; provided that this Agreement and its terms may be disclosed (i) to third parties to the extent such disclosure is made pursuant to a written agreement of confidentiality in form and substance reasonably satisfactory to the other parties hereto, (ii) to such party’s legal counsel and the Purchaser’s assignees, if they are advised of the confidential nature of such information and (iii) to the extent such party is otherwise permitted to disclose such information pursuant to the Sale Agreement.

(b) The Sellers (collectively, the “Seller Entities”) and the Purchaser hereby agree that, from the commencement of discussions with respect to the transaction contemplated by this Agreement and the other Transaction Documents (as such term is defined in the Sale Agreement) (the “Transaction”), each Seller Entity and the Purchaser (and each of their respective, and their respective affiliates’, employees, officers, directors, advisors, representatives and agents) are permitted to disclose to any and all persons, without limitation of any kind, the structure and tax aspects (as such terms are used in Internal Revenue Code Sections 6011, 6111 and 6112 and the regulations promulgated thereunder) of the Transaction, and all materials of any kind (including opinions or other tax analyses) that are provided to any Seller Entity or the Purchaser related to such structure and tax aspects. In this regard, each Seller Entity and the Purchaser acknowledges and agrees that the disclosure of the structure or tax aspects of the Transaction is not limited in any way by an express or implied understanding or agreement, oral or written (whether or not such understanding or agreement is legally binding). Furthermore, each Seller Entity and the Purchaser acknowledges and agrees that it does not know or have reason to know that its use or disclosure of information relating to the structure or tax aspects of the Transaction is limited in any other manner (such as where the Transaction is claimed to be proprietary or exclusive) for the benefit of any other person. To the extent that disclosure of the structure or tax aspects of the Transaction by any Seller Entity or the Purchaser is limited by any existing agreement between any Seller Entity and the Purchaser, such limitation is agreed to be void ab initio and such agreement is hereby amended to permit disclosure of the structure and tax aspects of the Transaction.

SECTION 9.07. GOVERNING LAW. THIS AGREEMENT, AS IT APPLIES TO BOMBARDIER MOTOR AND THE PURCHASER IN RESPECT OF BOMBARDIER MOTOR AND AS IT APPLIES AMONG THE SELLERS AND SERVICERS, SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF

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THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE PURCHASER’S OWNERSHIP OF OR SECURITY INTEREST IN THE RECEIVABLES ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS AGREEMENT, AS IT APPLIES TO THE PARENT AND THE PURCHASER IN RESPECT OF THE PARENT, SHALL BE GOVERNED BY THE LAWS OF THE PROVINCE OF QUEBEC AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN. THIS AGREEMENT, AS IT APPLIES TO EACH MEMBER OF THE NORDTRAC GROUP AND THE PURCHASER IN RESPECT OF EACH MEMBER OF THE NORDTRAC GROUP, SHALL BE GOVERNED BY THE LAWS OF FINLAND.

SECTION 9.08. Third Party Beneficiary. Each of the parties hereto hereby acknowledges that the Purchaser has assigned its rights under this Agreement pursuant to the Sale Agreement and that such assignee may (except as otherwise agreed to by such assignee, but subject to the terms of the Sale Agreement) further assign their rights under this Agreement, and the Sellers hereby consent to any such assignments. All such assignees, including parties to the Sale Agreement in the case of assignment to such parties, shall be third party beneficiaries of, and shall be entitled to enforce the Purchaser’s rights and remedies under, this Agreement to the same extent as if they were parties thereto, except to the extent specifically limited under the terms of their assignment.

SECTION 9.09. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

SECTION 9.10. Consent to Jurisdiction. (a) Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in New York City in any action or proceeding arising out of or relating to this Agreement, and each party hereto hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. The parties hereto hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The parties hereto agree that a final judgment in any such action or proceeding with respect to which there is no further right of appeal shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Each party hereto (other than Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy and the Parent) consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to it at its address specified in Section 9.02. Each of Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy and the Parent consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to CT Corporation System, 111 Eighth Avenue, New York, NY 10001, USA, or in any other manner permitted by applicable law. Nothing in this Section 9.10 shall affect (i) the right of the Purchaser or its assigns to serve

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legal process in any other manner permitted by law or affect the right of the Purchaser or its assigns to bring any action or proceeding against the Sellers, or any of their property in the courts of any other jurisdictions or (ii) the right of the Sellers or any Servicer to serve legal process in any manner permitted by law or affect the right of the Sellers or any Servicer to bring any action or proceeding against the Purchaser or its assigns or any of their property in the courts of any jurisdiction.

(c) To the extent that Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy or the Parent has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each of Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy and the Parent hereby irrevocably waives such immunity in respect of its obligations under this Agreement.

SECTION 9.1l. Judgment. (a) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Purchaser or its assigns could purchase Dollars with such other currency at New York, New York on the Business Day preceding that on which final judgment is given.

(b) The obligations of the Sellers and each Servicer (each, a “Payor”) in respect of any sum due from such Payor to the Purchaser or its assigns (each, a “Recipient”) hereunder shall, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day following such Recipient’s receipt of any sum adjudged to be so due in such other currency, such Recipient may, in accordance with normal banking procedures purchase (and remit in New York) Dollars with such other currency; if the Dollars so purchased and remitted are less than the sum originally due to such Recipient in Dollars, the relevant Payor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the relevant Recipient against such loss, and if the Dollars so purchased exceed the sum originally due to the relevant Recipient in Dollars, the relevant Recipient agrees to remit to the relevant Payor such excess.

SECTION 9.12. Entire Agreement. This Agreement (including the Schedules and Annexes relating hereto) and the other Transaction Documents (as such term is defined in the Sale Agreement) constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

SECTION 9.13. Language. This Agreement and all related documents have been written in the English language at the express request of the parties. Le présent contrat ainsi que tous les documents s’y rattachant ont été rédigés en anglais à la demande expresse des parties.

40

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

SELLER AND SERVICER:	BOMBARDIER MOTOR CORPORATION OF AMERICA
	By:
		Name:
		Title:
	By:
		Name:
		Title:
SELLER AND SERVICER:	BOMBARDIER NORDTRAC AB
	By:
		Name:
		Title:
	By:
		Name:
		Title:
SELLER AND SERVICER:	BOMBARDIER NORDTRAC AS
	By:
		Name:
		Title:
	By:
		Name:
		Title:

SELLER AND SERVICER:	BOMBARDIER-NORDTRAC OY
	By:
		Name:
		Title:
	By:
		Name:
		Title:
SELLER AND PARENT SERVICER:	BOMBARDIER RECREATIONAL PRODUCTS INC.
	By:
		Name:
		Title:
	By:
		Name:
		Title:
PURCHASER:	BRP RECEIVABLES FUNDING, LLC
	By:
		Name:
		Title:
	By:
		Name:
		Title:

EXHIBIT A

FORM OF

DEFERRED PURCHASE PRICE NOTE

New York, New York

                        , 200    

FOR VALUE RECEIVED, BRP RECEIVABLES FUNDING, LLC, a Delaware limited liability company (the “Purchaser”), hereby promises to pay to [SELLER OTHER THAN BOMBARDIER MOTOR] (the “Company”) the principal amount of this Note, determined as described below, together with interest thereon at a rate per annum equal at all times to 4% per annum above the Eurodollar Rate (as defined in the Sale Agreement) for periods of one month, in each case in lawful money of the United States of America. Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Purchase Agreement dated as of December 18, 2003 among Bombardier Motor Corporation of America, Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy and the Company as sellers and servicers and the Purchaser (such agreement, as it may from time to time be amended, restated or otherwise modified in accordance with its terms, the “Purchase Agreement”). This Note is the note referred to in the definition of “Deferred Purchase Price” in the Purchase Agreement.

The aggregate principal amount of this Note at any time shall be equal to the difference between (a) the sum of the aggregate principal amount of this Note on the date of the issuance hereof and each addition to the principal amount of this Note pursuant to the terms of Section 2.02 of the Purchase Agreement minus (b) the aggregate amount of all payments made in respect of the principal amount of this Note, in each case, as recorded on the schedule annexed to and constituting a part of this Note, but failure to so record shall not affect the obligations of the Purchaser to the Company.

The entire principal amount of this Note shall be due and payable one year and one day after the Facility Termination Date or such later date as may be agreed in writing by the Company and the Purchaser. The principal amount of this Note may, at the option of the Purchaser, be prepaid in whole at any time or in part from time to time. Interest on this Note shall be paid in arrears on each Settlement Date, at maturity and thereafter on demand. All payments hereunder shall be made by wire transfer of immediately available funds to such account of the Company as the Company may designate in writing.

Notwithstanding any other provisions contained in this Note, in no event shall the rate of interest payable by the Purchaser under this Note exceed the highest rate of interest permissible under applicable law.

For purposes of the Interest Act (Canada), where in this Note a rate of interest is to be calculated on the basis of a period of less than one year, the yearly rate of interest to which the said rate is equivalent is the said rate divided by the actual number of days in the period for which such calculation is made and multiplied by 365 days (or 366 days in the case of a leap year).

A-1

The obligations of the Purchaser under this Deferred Purchase Price Note are subordinated in right of payment, to the extent set forth in Section 2.03(c) of the Purchase Agreement, to the prior payment in full of all Capital, Yield and other obligations of the Purchaser under the Sale Agreement.

Notwithstanding any provision to the contrary in this Deferred Purchase Price Note or elsewhere, other than with respect to payments specifically permitted by Section 2.03(c) of the Purchase Agreement, no demand for any payment may be made hereunder, no payment shall be due with respect hereto and the Company shall have no claim for any payment hereunder prior to the occurrence of the Facility Termination Date and then only on the date, if ever, when all Capital, Yield and other obligations owing under the Sale Agreement shall have been paid in full.

In the event that, notwithstanding the foregoing provision limiting such payment, the Company shall receive any payment or distribution on this Deferred Purchase Price Note which is not specifically permitted by Section 2.03(c) of the Purchase Agreement, such payment shall be received and held in trust by the Company for the benefit of the entities to whom the obligations are owed under the Sale Agreement and shall be promptly paid over to such entities.

The Purchaser hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever. Neither this Note, nor any right of the Company to receive payments hereunder, shall, without the prior written consent of the Purchaser and (so long as the Sale Agreement remains in effect or any amounts remain outstanding thereunder) the Company under the Sale Agreement, be assigned, transferred, exchanged, pledged, hypothecated, participated or otherwise conveyed.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

BRP RECEIVABLES FUNDING, LLC
By:
	Name:
	Title:

By:
	Name:
	Title:

A-2

SCHEDULE TO DEFERRED PURCHASE PRICE NOTE

Date Addition to Principal Amount Amount of Principal Paid or Prepaid Unpaid Principal Balance Notation Made By

A-3

EXHIBIT B

FORM OF NOTICES TO OBLIGORS AND INVOICE LEGENDS

With Respect to Bombardier-Nordtrac Oy:

Legend for Receivables (Finnish):

Bombardier-Nordtrac Oy on siirtänyt kaikki Teiltä olevat saatavansa, kaikkine niihin liittyvine oikeuksineen sekä siihen liittyvät vakuudet ja niiden tuotton, BRP Receivables Funding, LLC:lle (“Siirronsaaja”). Kaikkiin näihin saataviin liittyvät maksusuoritukset tulee suorittaa Siirronsaajalle, ellette myöhemmin saa Siirronsaajalta muuta kirjallista ohjetta. Maksu tulee suorittaa tilille numero [BANK AND ACCOUNT NUMBER].

English translation:

Bombardier-Nordtrac Ltd. has transferred all of its claims towards you, including all rights related thereto and all related security and guaranties and all proceeds thereof, to BRP Receivables Funding, LLC (the “Purchaser”). All payments pursuant to these receivable shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser. Payment shall be made to [BANK AND ACCOUNT NUMBER].

Notice for Receivables (Finnish):

Ilmoitamme täten, että tämän laskun mukainen saatava, sekä kaikki siihen liittyvät oikeudet sekä niihin liittyvät vakuudet ja niiden tuoton, on siirretty BRP Receivables Funding, LLC:lle (“Siirronsaaja”). Saatavaan liittyvät maksusuoritukset tulee suorittaa Siirronsaajalle, ellette myöhemmin saa Siirronsaajalta muuta kirjallista ohjetta. Maksu tulee suorittaa tilille numero [BANK AND ACCOUNT NUMBER].

English translation:

We hereby notify you that the receivable evidenced by the above-mentioned invoice, including all rights related thereto and all related security and guaranties and all proceeds thereof, have been transferred to BRP Receivables Funding, LLC (the “Purchaser”). Payment pursuant to this receivable shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser. Payment shall be made to [BANK AND ACCOUNT NUMBER].

With Respect to Bombardier Nordtrac AB:

Legend for Receivables (Swedish):

Vi får härmed informera er om att denna faktura samt samtliga säkerheter och garantier knutna till denna faktura, har överlåtits till BRP Receivables Funding, LLC (“Förvärvaren”). Betalning

B-l

enligt denna faktura kan med befriande verkan enbart ske till Förvärvaren. Betalning kan inte med befriande verkan ske till annan förutsatt att ni inte skriftligen informerats om annat av Förvärvaren, eller annan som företräder denne. Betalning skall erläggas till bankkonto nummer [l].

English translation:

We hereby notify you that the receivable evidenced by the above-mentioned invoice, all related security and guarantees and all proceeds thereof have been sold, assigned and transferred to BRP Receivables Funding, LLC (the “Purchaser”). Payment pursuant to this receivable shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser or on its behalf. Payment shall be made to bank account no. [l].

Notice for Receivables (Swedish):

Bombardier Nordtrac AB har överlåtit alla sina fordringar mot er, samt alla säkerheter och garantier knutna till dessa fordringar, till BRP Rececivables Funding, LLC (“Förvärvaren”). Betalning för dessa fordringar kan därför med befriande verkan enbart erläggas till Förvärvarens bankkonto nummer [l].

English translation:

Bombardier Nordtrac AB has transferred all its claims towards you to BRP Receivables Funding, LLC (the “Purchaser”) together with all related securities and guarantees. Payment of these claims can therefore not be made to any other party than to the Purchaser’s bank account no. [l].

With Respect to Bombardier Nordtrac AS:

Legend for Receivables (Norwegian):

Vi informerer Dem hermed om at denne faktura og samtlige sikkerheter vi har i forhold til D em e r o verført til BRP Receivables Funding, LLC ( “Erververen”). Frigjørende betaling av denne faktura kan kun skje til Erververen med mindre De skriftlig informert om annet av Erververen eller av noen som representerer Erververen. Betaling skal skje til bankkontonummer [l].

English translation:

We hereby notify you that the receivable evidenced by this invoice, all related security and guarantees and all proceeds thereof have been sold, assigned and transferred to BRP Receivables Funding, LLC (the “Purchaser”). Payment shall be made to bank account no. [l]. Payment of this invoice shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser or on its behalf.

B-2

Notice for Receivables (Norwegian):

Bombardier Nordtrac AS har overdratt alle sine fordringer mot Dem til BRP Receivables Funding, LLC (“Erververen”) sammen med samtlige sikkerheter vi har i forhold ti Dem. Betaling av disse fordringer kan dermed kun skje med frigjørende virkning til Erververens bankkonto nr. [l].

English translation:

Bombardier Nordtrac AS has transferred all of its claims towards you to BRP Receivables Funding, LLC (the “Purchaser”) together with all related securities and guaranties. Payment of these claims can therefore not be made to any other party than to the Purchaser’s bank account no. [l].

B-3

SCHEDULE I

DEPOSIT ACCOUNTS

Name and Address of
Deposit Account Bank Account Holders Account Number

Sch. I-1

SCHEDULE II

Addresses of Sellers, Purchaser and Servicers

Sch. II-1

SCHEDULE III

Approved Obligors

Sch. III-1

EX-10.14

Exhibit 10.14

RECEIVABLES PURCHASE AGREEMENT

Dated as of December 18, 2003

Among

BRP RECEIVABLES FUNDING, LLC

as the Seller

and

BOMBARDIER CAPITAL INC.

as the initial Investor and Operating Agent

and

BOMBARDIER MOTOR CORPORATION OF AMERICA

BOMBARDIER NORDTRAC AB

BOMBARDIER NORDTRAC AS and

BOMBARDIER-NORDTRAC OY

as Originators and Servicers

and

BOMBARDIER RECREATIONAL PRODUCTS INC.

as an Originator and as the Parent Servicer

TABLE OF CONTENTS

		Page
PRELIMINARY STATEMENT		1
ARTICLE I
DEFINITIONS		1
SECTION 1.01.	Certain Defined Terms	1
SECTION 1.02.	Other Terms	19
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES		19
SECTION 2.01.	Purchase Facility	19
SECTION 2.02.	Making Purchases	20
SECTION 2.03.	Receivable Interest Computation	21
SECTION 2.04.	Settlement Procedures	21
SECTION 2.05.	Fees	24
SECTION 2.06.	Payments and Computations, Etc.	24
SECTION 2.07.	Dividing or Combining Receivable Interests	25
SECTION 2.08.	Increased Costs	25
SECTION 2.09.	Additional Yield on Receivable Interests Bearing a Eurodollar Rate	26
SECTION 2.10.	Taxes	26
SECTION 2.11.	True Sales	28
SECTION 2.12.	Sharing of Payments	28
SECTION 2.13.	Cutoff Date	29
ARTICLE III
CONDITIONS OF PURCHASES		29
SECTION 3.01.	Conditions Precedent to Initial Purchase	29
SECTION 3.02.	Conditions Precedent to All Purchases and Reinvestments	31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES		32
SECTION 4.01.	Representations and Warranties of the Seller	32
SECTION 4.02.	Representations and Warranties of the Servicers	34
ARTICLE V
COVENANTS		35
SECTION 5.01.	Covenants of the Seller	35
SECTION 5.02.	Covenant of the Seller and the Originators	41

i

ARTICLE VI
ADMINISTRATION AND COLLECTION OF POOL RECEIVABLES		42
SECTION 6.01.	Designation of Servicers	42
SECTION 6.02.	Duties of Servicers	42
SECTION 6.03.	Certain Rights of the Operating Agent	45
SECTION 6.04.	Rights and Remedies	46
SECTION 6.05.	Further Actions Evidencing Purchases	46
SECTION 6.06.	Covenants of the Servicers and the Originators	47
SECTION 6.07.	Indemnities by the Servicers	47
ARTICLE VII
EVENTS OF TERMINATION		48
SECTION 7.01.	Events of Termination	48
ARTICLE VIII
THE OPERATING AGENT		52
SECTION 8.01.	Authorization and Action	52
SECTION 8.02.	Operating Agent’s Reliance, Etc.	52
SECTION 8.03.	Business with Seller, any Servicer or any Obligor	52
SECTION 8.04.	Investor’s Purchase Decision	52
ARTICLE IX
INDEMNIFICATION		53
SECTION 9.01.	Indemnities by the Seller	53
ARTICLE X
MISCELLANEOUS		55
SECTION 10.01.	Amendments, Etc.	55
SECTION 10.02.	Notices, Etc.	55
SECTION 10.03.	Assignability	56
SECTION 10.04.	Costs and Expenses	56
SECTION 10.05.	Waiver of Consequential Damages	56
SECTION 10.06.	Confidentiality	57
SECTION 10.07.	GOVERNING LAW	58
SECTION 10.08.	Execution in Counterparts	58
SECTION 10.09.	Survival of Termination	59
SECTION 10.10.	Consent to Jurisdiction	59
SECTION 10.11.	WAIVER OF JURY TRIAL	59
SECTION 10.12.	Judgment	60
SECTION 10.13.	Entire Agreement	60
SECTION 10:14.	Language	60

ii

SCHEDULES
SCHEDULE I	-	Deposit Accounts
SCHEDULE II	-	Addresses of Seller, Originators, Investor, Operating Agent and Servicers
SCHEDULE III	-	Approved Obligors
		ANNEXES
ANNEX A-1	-	Form of Monthly Seller Report
ANNEX A-2	-	Form of Weekly Seller Report
ANNEX B	-	Form of U.S. Deposit Account Agreement
ANNEX C-l	-	Form of Opinion(s) of Ropes & Gray LLP
ANNEX C-2	-	Form of Opinion of Osler, Hoskin & Harcourt, LLP
ANNEX C-3	-	Form of Opinion of Hannes Snellman Attorneys at Law Ltd.
ANNEX C-4	-	Form of Opinion of Advokatfirman Vinge KB
ANNEX C-5	-	Form of Opinion of Thommessen Krefting Greve Lund AS Advokatfirma
ANNEX D	-	Form of Assignment and Acceptance
ANNEX E	-	Form of Funds Transfer Letter
ANNEX F-l	-	Form of Undertaking (Parent)
ANNEX F-2	-	Form of Undertaking (Bombardier Motor)
ANNEX G	-	Form of Notices to Obligors and Invoice Legends

iii

RECEIVABLES

PURCHASE AGREEMENT

Dated as of December 18, 2003

BRP RECEIVABLES FUNDING, LLC, a Delaware limited liability company (the “Seller”), BOMBARDIER CAPITAL INC., a Massachusetts corporation, as an Investor and as operating agent (the “Operating Agent”) for the Investors, BOMBARDIER MOTOR CORPORATION OF AMERICA, a Delaware corporation, as an Originator and a Servicer, BOMBARDIER NORDTRAC AB, a Swedish incorporated company, as an Originator and a Servicer, BOMBARDIER NORDTRAC AS, a Norwegian incorporated company, as an Originator and a Servicer, BOMBARDIER-NORDTRAC OY, a Finnish limited liability company, as an Originator and a Servicer, and BOMBARDIER RECREATIONAL PRODUCTS INC., a Canadian corporation, as an Originator and the Parent Servicer, agree as follows:

PRELIMINARY STATEMENT. The Seller has acquired, and may continue to acquire, Receivables from the Originators (as hereinafter defined). The Seller is prepared to sell undivided fractional ownership interests (referred to herein as “Receivable Interests”) in the Receivables. The Investors have agreed to purchase such Receivable Interests on the terms set forth herein. Accordingly, the parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Adjusted Eurodollar Rate” means, for any Fixed Period, an interest rate per annum equal to the rate per annum obtained by dividing (i) the Eurodollar Rate for such Fixed Period by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Fixed Period.

“Adverse Claim” means a lien, security interest, mortgage, pledge, assignment, hypothec, hypothecation, privilege, title retention or other charge or encumbrance.

“Affected Person” has the meaning specified in Section 2.08(a).

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person or is a director or officer of such Person.

“Affiliated Obligor” means any Obligor that is an Affiliate of another Obligor.

“Alternate Base Rate” means a fluctuating interest rate per annum as shall be in effect from time to time, which rate shall be at all times equal to the highest of:

(a) the rate of interest announced publicly by Citibank, N.A. in New York, New York, from time to time as Citibank, N.A.’s base rate;

(b) 1/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank, N.A. on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank, N.A. from three New York certificate of deposit dealers of recognized standing selected by Citibank, N.A., in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent; and

(c) the Federal Funds Rate.

“Applicable Rate” for any Fixed Period for any Receivable Interest means an interest rate per annum equal to the Adjusted Eurodollar Rate for such Fixed Period plus 4.0% plus (at any time when an Event of Termination shall exist) another 3.0%; provided, however, that in case of:

(i) any Fixed Period on or prior to the first day of which an Investor shall have notified the Operating Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Investor to fund such Receivable Interest at the Applicable Rate set forth above (and such Investor shall not have subsequently notified the Operating Agent that such circumstances no longer exist), or

(ii) any Fixed Period for a Receivable Interest the Capital of which allocated to the Investors is less than $500,000,

the “ Applicable Rate” for such Fixed Period shall be an interest rate per annum equal to the Alternate Base Rate in effect from time to time during such Fixed Period plus 2.0% plus (at any time when an Event of Termination shall exist) another 2.0%; provided further that the Operating Agent and the Seller may agree in writing from time to time upon a different “Applicable Rate”.

“Assignment and Acceptance” means an assignment and acceptance agreement entered into by an Investor, an Eligible Assignee and the Operating Agent, pursuant to which such Eligible Assignee may become a party to this Agreement, in substantially the form of Annex D hereto, it being agreed that the Operating Agent will not amend the terms of Section 4,

2

5a or 8 thereof without the consent of the Seller, which consent shall not be unreasonably withheld.

“BCI” means Bombardier Capital Inc., a Massachusetts corporation, and any successor or permitted assign under Section 10.03 of BCI.

“BCI Subservicer Fee” has the meaning provided in Section 2.05(b) hereof.

“BCL” means Bombardier Capital Limited, a Quebec company.

“Bombardier Inc. Purchase Agreement” means the Purchase Agreement, dated December 2, 2003, between Bombardier Inc. and Bombardier Recreational Products Inc.

“Bombardier Motor” means Bombardier Motor Corporation of America, a Delaware corporation.

“Bombardier Nordtrac AB” means Bombardier Nordtrac AB, a Swedish incorporated company with the Swedish registration number 5563537413.

“Bombardier Nordtrac AS” means Bombardier Nordtrac AS, a Norwegian incorporated company with Norwegian registration number 974394197.

“Bombardier-Nordtrac Oy” means Bombardier-Nordtrac Oy, a Finnish limited liability company, Business Identity Code 0703296-1.

“Business Day” means any day on which (i) banks are not authorized or required to close in New York City, Montreal, Quebec or London, and (ii) if this definition of “Business Day” is utilized in connection with the Eurodollar Rate, dealings are carried out in the London interbank market.

“Canadian Dollars” means dollars in the lawful currency of Canada.

“Capital” of any Receivable Interest means the original amount paid to the Seller for such Receivable Interest at the time of its purchase by an Investor pursuant to this Agreement or such amount divided or combined in accordance with Section 2.07, in each case reduced from time to time by Collections distributed on account of such Capital pursuant to Section 2.04(d); provided that if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution, as though it had not been made.

“Collections” means, with respect to any Receivable, all cash collections and other cash proceeds of such Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Receivable, in each case received after December 12, 2003 and any Collection of such Receivable deemed to have been received pursuant to Section 2.04.

3

“Competitor” means any Person engaged, or whose direct or indirect parent (or any Subsidiary thereof) or Subsidiaries or any sister corporation of any thereof are engaged, in a material respect in one of the same lines of business as the Parent or its Subsidiaries.

“Concentration Limit” for any Obligor means at any time 5% of the Net Receivables Pool Balance (such amount being the “Normal Concentration Limit”); provided that (a) a special concentration limit shall be established for John Deere Inc., equal to 25% of the Net Receivables Pool Balance and (b) in the case of an Obligor with any Affiliated Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliated Obligor are one Obligor; provided further that in no event shall the aggregate Outstanding Balance of all Eligible Receivables originated (a) by the Nordtrac Group in the Net Receivables Pool Balance at any time exceed an aggregate of $55,000,000 and (b) by Bombardier Motor and Bombardier Recreational Products Inc. in the Net Receivables Pool Balance at any time exceed an aggregate of $60,000,000.

“Contract” means a written agreement, invoice or purchase order between an Originator and an Obligor pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time (including, without limitation, an account, instrument, installment sales contract, chattel paper or general intangible).

“Credit and Collection Policy” means those customary receivables credit and collection policies and practices of the Originators and the Seller in effect on the date of this Agreement as applied by such Originator or Seller in the ordinary course of its lawful business, as such policies and procedures are modified from time to time in compliance with this Agreement, it being acknowledged in the case of the Parent that such policies and procedures refer to corresponding policies and procedures of Bombardier Inc. as in effect on the date hereof.

“Debt” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above and (vi) interest rate swaps, currency hedges or other similar arrangements intended to protect a Person from fluctuations in interest rates or currency valuations.

“Debt Rating” for any Person means the rating by S&P or Moody’s of such Person’s long-term public senior unsecured noncredit- enhanced debt.

“Defaulted Receivable” means an Originator Receivable:

(i) as to which any payment, or part thereof, remains unpaid for 91 or more days from the original due date for such payment;

4

(ii) as to which the Obligor thereof (or any of the Obligor’s Affiliates obligated thereon or owning any Related Security in respect thereof) has taken any action, or suffered any event to occur, of the type described in Section 7.0l (g); or

(iii) which, consistent with the Credit and Collection Policy, would be written off the relevant Originator’s or the Seller’s books as uncollectible within less than 91 days form the original due date for payment thereon.

“Deferred Purchase Price” has the meaning specified in the Originator Purchase Agreement.

“Deposit Account” means a post office box administered by a Deposit Account Bank and/or an account maintained at a Deposit Account Bank, in each case as described in Schedule I.

“Deposit Account Agreement” means an agreement, in substantially the form of Annex B or with such changes therein as are appropriate for use outside the United States as shall be reasonably satisfactory to the Operating Agent and its counsel.

“Deposit Account Bank” means any of the banks holding one or more Deposit Accounts.

“Diluted Receivable” means that portion (and only that portion) of any Originator Receivable (a) which is reduced or canceled as a result of (i) any defective, rejected or returned merchandise or services or any failure by the Originator to deliver any merchandise or provide any services or otherwise to perform under the underlying Contract, (ii) any change in the terms of or cancellation of, a Contract or any cash discount, discount for quick payment or other adjustment by the Originator which in any of the foregoing cases reduces the amount payable by the Obligor on the related Originator Receivable (except any such change or cancellation resulting solely from the financial inability to pay or insolvency of the Obligor of such Originator Receivable) or (iii) any set-off by an Obligor in respect of any claim by such Obligor as to amounts owed by it on the related Originator Receivable (whether such claim arises out of the same or a related transaction or an unrelated transaction), (b) the maturity of which is extended more than once or for more than 30 days as permitted by Section 6.02(c), (c) which is, without duplication of the reductions or cancellations referred to in clause (a), subject to any specific dispute, offset, counterclaim or defense whatsoever (except the discharge in bankruptcy of the Obligor thereof or any stay or defense arising solely as a result of applicable insolvency law affecting the Obligor) or (d) which is otherwise reduced by action or consent of the relevant Originator; provided that Diluted Receivables are calculated assuming that all chargebacks are resolved in the Obligor’s favor.

“Dollar Equivalent” means, as of any date, the amount obtained by applying the rate for converting currency into Dollars at the 10:00 a.m. U.S. Federal Reserve spot rate of exchange for that currency.

“Dollars” or “$” means dollars in the lawful currency of the United States.

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“E-Mail Seller Report” has the meaning specified in Section 6.02(g).

“Eligible Assignee” means Bombardier Capital Limited or any of its Affiliates or any financial or other institution acceptable to the Operating Agent to which the Seller shall consent, such consent not to be unreasonably withheld or delayed, provided, that upon the occurrence of an Event of Termination, the Seller’s consent shall not be required, unless the proposed assignee is a Competitor (but in such case Seller’s consent shall not be unreasonably withheld).

“Eligible Receivable” means, at any time, a Receivable:

(i) the Obligor of which has a billing address in the United States (including, without limitation, Puerto Rico), Canada, Finland, Norway or Sweden;

(ii) the Obligor of which is not an Affiliate of any of the Originators;

(iii) which is not a Defaulted Receivable and the Obligor of which is not the Obligor of any Defaulted Receivables which in the aggregate constitute 10% or more of the aggregate Outstanding Balance of all Receivables of such Obligor;

(iv) which, according to the Contract related thereto, is required to be paid in full either (A) within 90 days of the original billing date therefor or (B) with respect to Pool Receivables originated by the Nordtrac Group, within not more than the lesser of (x) 180 days from the original billing date therefor and (y) the number of days from the original billing date therefor to and including the first Business Day in the succeeding month of April;

(v) which is an obligation representing all or part of the sales price of merchandise or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, and the nature of which is such that its purchase with the proceeds of notes would constitute a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;

(vi) which (A) in the case of a Receivable originated by Bombardier Motor, is an “account” or “chattel paper” within the meaning of Article 9 of the UCC of the applicable jurisdictions governing the perfection of the interest created by a Receivable Interest and (B) in the case of a Receivable originated by the Parent, is an “account” or “chattel paper” within the meaning of the PPSA;

(vii) which (A) in the case of a Receivable originated by Bombardier Motor, is denominated and payable only in Dollars in the United States, (B) in the case of a Receivable originated by the Parent, is denominated and payable only in Dollars or Canadian Dollars in the United States or Canada and (C) in the case of a Receivable originated by the Nordtrac Group, is denominated in Swedish Kronor and payable only in Sweden, denominated in Norwegian Kroner and payable only in Norway or denominated in Euros and payable only in Finland;

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(viii) which is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable and is not subject to any Adverse Claim other than Permitted Liens or any dispute, offset, counterclaim or defense whatsoever (except the potential discharge in bankruptcy of such Obligor), provided that if a specific dispute, offset, counterclaim or defense has been asserted in an amount less than the Outstanding Balance of such Receivable, the portion of such Receivable in excess of such asserted amount shall continue to be an Eligible Receivable (unless it fails to satisfy one of the other clauses of this definition of Eligible Receivable);

(ix) which, together with the invoice or purchase order related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which none of the Seller, the relevant Originator or the Obligor is in violation of any such law, rule or regulation in any material respect;

(x) which arises under a Contract which does not contain a legally enforceable provision requiring the Obligor thereunder to consent to the transfer, sale or assignment of the right to payment thereunder unless a written consent of the Obligor has been obtained;

(xi) which was generated in the ordinary course of the relevant Originator’s business;

(xii) which has not been extended, rewritten or otherwise modified from the original terms thereof except in accordance with Section 6.02(c) but nevertheless in all cases subject to being classified as a Diluted Receivable in accordance with the definition thereof;

(xiii) the transfer, sale or assignment of which does not contravene any applicable law, rule or regulation;

(xiv) which satisfies all applicable requirements of the Credit and Collection Policy;

(xv) as to which, at or prior to the later of the date of this Agreement and the date five Business Days before such Receivable is created, the Operating Agent has not notified the Seller that such Receivable is no longer acceptable for purchase by the Investors hereunder because (A) the relevant Obligor is in default under the terms of another financing arrangement with BCI or BCL, (B) the relevant Obligor has applied for credit from BCI or BCL for an equipment or inventory based financing arrangement and BCI or BCL has declined to provide such credit in accordance with BCI’s or BCL’s customary credit policies in effect at such time provided that this clause (B) shall not apply to (1) any refusal by BCI

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or BCL to increase the level of credit made available to an Obligor to which BCI or BCL is then already extending credit, (2) any determination by BCI or BCL not to extend credit for any snowgrooming equipment financing arrangement due to insufficient manufacturer recourse being offered to support such arrangement or (3) any Obligors specifically listed on Schedule III hereto, (C) such Obligor is party to one or more separate financing arrangements with BCI or BCL and is then in excess of the credit limit for such Obligor established by BCI or BCL for such Obligor in accordance with BCI’s or BCL’s customary credit policies in effect at such time, provided that an Obligor which is a Johnson/Evinrude dealer shall not be deemed to have exceeded such credit limit to the extent attributable to Receivables arising from the sale of parts, clothing and accessories, or (D) the relevant Obligor has been required to wind down or liquidate any separate financing arrangements with BCI or BCL, it being understood and agreed that from and after the time a Receivable is rendered ineligible by means of this clause (xv), all further receivables of such Obligor will be deemed to be Excluded Receivables;

(xvi) as to which the relevant Originator has satisfied and fully performed all obligations required to be fulfilled by it (as evidenced by an invoice or other statement) and the amount of such Receivable (as evidenced by said invoice or other statement) is not subject to any requirement that funds be reimbursed in the event of cancellation of the relevant Contract;

(xvii) the related invoice of which complies with the notice and legend requirements of Section 6.02(k) hereof to the extent applicable to such invoice;

(xviii) which is not a “restocking” charge, order cancellation fee or other fee (other than Finance Charges) charged to Obligors; and

(xix) which is not a Receivable of the type described in clauses (g)(iii) or (j) of the definition of Excluded Receivable (without taking account of the time periods referred to therein).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“Euro” or “€” means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended.

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Rate” means, for any Fixed Period, an interest rate per annum equal to (i) the interest rate per annum for deposits of Dollars for a maturity most nearly comparable to such Fixed Period which appears on page 3750 of the Dow Jones Telerate Screen as of 11:00 A.M. (London time) on the second Business Day prior to the commencement of such Fixed

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Period or (ii) if the rate referred to in clause (i) above is not available on such day, the interest rate per annum for deposits of Dollars for a maturity most nearly comparable to such Fixed Period which appears on the LIBO page of the Reuters Screen as of 11:00 A.M. (London time) on the second Business Day prior to the commencement of such Fixed Period or (iii) if the rates referred to in clauses (i) and (ii) above are not available on such day or the rates quoted in accordance with clauses (i) or (ii) on said Screens are for interest periods of durations that are not comparable to such Fixed Period, the interest rate per annum equal to the rate per annum at which Citibank, N.A. offers deposits of Dollars in the interbank market at or about 10:00 A.M. (New York City time) on the second Business Day prior to the commencement of such Fixed Period in an amount substantially equal to the Capital associated with such Fixed Period, for delivery on the first day of such Fixed Period for the number of days comprised therein.

“Eurodollar Rate Reserve Percentage” of any Investor for any Fixed Period in respect of which Yield is computed by reference to the Eurodollar Rate means the reserve percentage applicable two Business Days before the first day of such Fixed Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) (or if more than one such percentage shall be applicable, the daily average of such percentages for those days in such Fixed Period during which any such percentage shall be so applicable) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Investor with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurocurrency Liabilities is determined) having a term equal to such Fixed Period.

“Event of Termination” has the meaning specified in Section 7.01.

“Excluded Receivable” means any of the following: (a) a receivable due to any Originator from any Person which, at the time such receivable is invoiced, is an Affiliate of any Originator; (b) a receivable due from an Obligor who, at the time such receivable arises, also sells goods and/or services to the relevant Originator, unless such Obligor has, at or prior to the time such receivable arises, waived in writing any right to setoff amounts due from the relevant Originator against such receivable due to such Originator; (c) a receivable which is payable in a currency other than Canadian Dollars, Dollars, Swedish Kronor, Norwegian Kroner or Euros; (d) a receivable which if it were an Originator Receivable would be a Defaulted Receivable on the date of this Agreement; (e) a receivable which arises under a Contract which contains a provision prohibiting the transfer, sale of assignment of the relevant Originator’s right to receive payments thereunder or is subject to a statute, rule or regulation requiring the Obligor thereunder to consent to the transfer, sale or assignment of the rights of the relevant Originator to receive payments thereunder, unless consent to the sale contemplated hereby has been obtained; (f) any Receivable containing a confidentiality provision which would restrict performance contemplated by this Agreement, where an appropriate consent or waiver thereunder has not been obtained; (g) any receivable owing (i) by the Federal Government of Canada or any federal agency or federal Crown corporation, (ii) by the Federal Government of the United States, unless the relevant Originator has, at its expense, to the Operating Agent’s satisfaction, taken all steps necessary to comply with the Federal Assignment of Claims Act of 1940, as amended, and any other applicable law necessary to effect the transfer of such receivable to the Seller and (iii) by any other Governmental Body, unless the relevant Originator, at its expense, has obtained, to the

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satisfaction of the Operating Agent, all consents required by the terms of the relevant Contract with such Governmental Body (whether or not such consent requirement is enforceable) and otherwise complied with any applicable law necessary to effect the transfer of such receivable to the Seller hereunder so long as the Originator can separately track and segregate such receivable with respect to consent and compliance requirements, provided that any such receivable originated after sixty (60) days from the date of this Agreement whether or not separately tracked and segregable shall be an Excluded Receivable; (h) any Receivable under a Contract in respect of which a specific dispute has arisen as of the time of transfer; (i) in the case of any Receivable originated by the Parent or Bombardier Motor, the Obligor has a billing address outside the United States or Canada and the Receivable is payable in a currency other than Canadian Dollars or Dollars; (j) any receivable to the extent it is paid immediately against presentation of the relevant invoice by a charge against the Obligor’s credit card, so long as the Originator is able to separately track and segregate such receivable, provided that any such credit card receivable originated after ninety (90) days from the date of this Agreement, whether or not separately tracked and segregable, shall be an Excluded Receivable, (k) any receivable that is paid by deduction against a cash advance previously paid to the relevant Originator, (1) any Receivable of a member of the Nordtrac Group where the Obligor is a natural person, sole proprietorship or general partnership, unless otherwise approved by the Operating Agent, acting reasonably or (m) any receivable which is subject to any dealer floorplanning financing arrangement.

“Facility Termination Date” means the earliest of (a) June [•], 2005 or (b) the date determined pursuant to Section 7.01 or (c) the date the Purchase Limit reduces to zero pursuant to Section 2.0 l(b).

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Operating Agent from three Federal funds brokers of recognized standing selected by it.

“Finance Charge” means, with respect to any Receivable, any interest or charges owing by an Obligor in connection with such Receivable not having been paid on the due date thereof.

“Fiscal Month” means a period beginning at the close of business on the last Friday of any calendar month and ending at the close of business on the last Friday of the succeeding calendar month, provided that if any such Friday is not a Business Day, such period shall begin and/or end (as applicable) at the close of business on the preceding Business Day and provided further that in any calendar month which is also a quarter end, the close of business on the last Business Day of such month rather than the last Friday of such month shall be used to begin and end the relevant Fiscal Months.

“Fixed Period” means, with respect to any Receivable Interest, each successive period of one month, each such Fixed Period for such Receivable Interest to commence on the

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last day of the immediately preceding Fixed Period for such Receivable Interest (or, if there is no such Fixed Period, on the date of purchase of such Receivable Interest); provided, however, that:

(i) any Fixed Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day (provided, however, if Yield in respect of such Fixed Period is computed by reference to the Eurodollar Rate, and such Fixed Period would otherwise end on a day which is not a Business Day, and there is no subsequent Business Day in the same calendar month as such day, such Fixed Period shall end on the next preceding Business Day); and

(ii) in the case of any Fixed Period for any Receivable Interest which commences before the Termination Date for such Receivable Interest and would otherwise end on a date occurring after such Termination Date, such Fixed Period shall end on such Termination Date and the duration of each Fixed Period which commences on or after the Termination Date for such Receivable Interest shall be of such duration (including, without limitation, one day) as shall be selected by the Operating Agent or, in the absence of any such selection, each period of thirty days from the last day of the immediately preceding Fixed Period.

“Funds Transfer Letter” means a letter in substantially the form of Annex E hereto executed and delivered by the Seller to the Operating Agent, as the same may be amended or restated in accordance with the terms thereof.

“Governmental Body” means any federal, state, provincial, regional, municipal, local or other governmental or administrative authority, bureau, agency or regulatory body.

“GST” means all goods and services tax payable under Part IX of the Excise Tax Act (Canada), all QST and all harmonized sales tax in the Provinces of Nova Scotia, Newfoundland and New Brunswick payable under the Excise Tax Act (Canada), as such statutes may be amended, modified, supplemented or replaced from time to time, including any successor statute.

“Incipient Bankruptcy Event of Termination” means an event under Section 7.0l(g) which but for notice or lapse of time or both would constitute an Event of Termination.

“Incipient Event of Termination” means an event that but for notice or lapse of time or both would constitute an Event of Termination.

“Indebtedness for Borrowed Money” means any obligation (whether present or future, actual or contingent, secured or unsecured, as principal, surety or otherwise) of a Person for the payment or repayment of money borrowed or raised (whether or not for cash consideration), by whatever means, including obligations under or in respect of (a) deposits and financial leasing; (b) any letter of credit securing financial accommodation; (c) promissory notes, certificates of deposit or like instruments (whether negotiable or otherwise); (d) acceptance credit, note purchase or bill acceptance or discounting facilities; or (e) like arrangements entered

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into by any Person in order to enable it to finance its operations or capital requirements; but excluding reimbursement obligations in respect of advance payments made by or on behalf of third party customers in relation to purchase orders of the Parent or to one of its Subsidiaries.

“Indemnified Party” has the meaning specified in Section 9.01.

“Investor” means BCI and each Eligible Assignee that shall become a party to this Agreement pursuant to Section 10.03.

“Investor Commitment” of any Investor means, (a) with respect to BCI, $115,000,000 or such amount as reduced or increased by any Assignment and Acceptance entered into between BCI and other Investors; or (b) with respect to an Investor that has entered into an Assignment and Acceptance, the amount set forth therein as such Investor’s Investor Commitment, in each case as such amount may be reduced or increased by an Assignment and Acceptance entered into between such Investor and an Eligible Assignee, and as may be further reduced ( or terminated) pursuant to the next sentence. Any reduction (or termination) of the Purchase Limit pursuant to the terms of this Agreement shall reduce ratably (or terminate) each Investor’s Investor Commitment.

“Liquidation Day” means, for any Receivable Interest, (i) each day during a Fixed Period for such Receivable Interest on which the conditions set forth in Section 3.02 were not satisfied or waived on the date of the relevant purchase or reinvestment, and (ii) each day which occurs on or after the Termination Date for such Receivable Interest.

“Liquidation Fee” means, for any Fixed Period for which Yield is computed by reference to the Eurodollar Rate and a reduction of Capital is made for any reason on any day other than the last day of such Fixed Period, the amount, if any, by which (A) the additional Yield (calculated without taking into account any Liquidation Fee or any shortened duration of such Fixed Period pursuant to clause (iii) of the definition thereof but excluding margin) which would have accrued from the date of such repayment to the last day of such Fixed Period on the reductions of Capital of the Receivable Interest relating to such Fixed Period had such reductions remained as Capital, exceeds (B) the income, if any, received by the Investors which hold such Receivable Interest from the investment of the proceeds of such reductions of Capital, it being understood and agreed that each relevant Investor agrees to take commercially reasonable measures, consistent with its customary practices to minimize the amount of such Liquidation Fee.

“Maximum Purchaser Interest” means 85%.

“Monthly Seller Report” means a report in substantially the form of Annex A-l hereto and containing such additional information reasonably available to the Parent Servicer as the Operating Agent may reasonably request from time to time, furnished by the Parent Servicer to the Operating Agent pursuant to Section 6.02(g). Without limiting the foregoing, the Seller Report shall include a measure of the level of Excluded Receivables during the relevant Fiscal Month, broken down by Originator, as shall be reasonably satisfactory to the Operating Agent.

“Moody’s” means Moody’s Investors Service, Inc.

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“Net Receivables Pool Balance” means at any time the Outstanding Balance of Eligible Receivables then in the Receivables Pool reduced by the sum of (without duplication) (i) the aggregate amount by which the Outstanding Balance of Eligible Receivables of each Obligor then in the Receivables Pool exceeds the Concentration Limit for such Obligor, (ii) the aggregate amount by which the Outstanding Balance of the Eligible Receivables then in the Receivables Pool of all Obligors of the Nordtrac Group and/or all Obligors of the Parent and Bombardier Motor exceeds the relevant Concentration Limit for such Obligors; (iii) the aggregate amount of Collections (expressed as the Dollar Equivalent, if any such amount is in Canadian Dollars, Swedish Kronor, Norwegian Kroner or Euros) which have been received by the Servicers at such time for payment on account of any Eligible Receivables, the Obligor of which has not been identified, and (iv) the aggregate Outstanding Balance of all Eligible Receivables in respect of which any credit memo issued by the Originator or the Seller is outstanding at such time to the extent deemed Collections have not been paid pursuant to Section 2.04(e).

“Nordtrac Group” means, collectively, Bombardier Nordtrac AB, Bombardier Nordtrac AS and Bombardier-Nordtrac Oy.

“Norwegian Kroner” means the lawful currency of Norway.

“Obligor” means a Person obligated to make payments pursuant to a Contract.

“Operating Agent’s Account” means the special account (account number 3752133837 for Dollars) of the Operating Agent named Bombardier-Capital Inventory Finance Division maintained at the office of the Bank of America in Dallas, TX ABA #111-000-012.

“Originator” means each of Bombardier Motor, Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy and the Parent.

“Originator Purchase Agreement” means the Purchase Agreement dated as of the date of this Agreement among the Originators, as sellers and servicers, and the Seller, as purchaser.

“Originator Receivable” means:

(a) in the case of Bombardier Motor, all existing and hereafter arising indebtedness of an Obligor (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to Bombardier Motor under a Contract created, generated or arising in the ordinary course of the business of Bombardier Motor of selling or providing goods and services under the name of or in connection with its activities as conducted through its Utility Vehicles Division or its Outboard Engine Division, including the right to the payment of Finance Charges and other obligations of such Obligor with respect thereto;

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(b) in the case of an Originator that is a member of the Nordtrac Group, all existing and hereafter arising indebtedness of an Obligor (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to such Originator under a Contract created, generated or arising in the ordinary course of the business of the Originator of selling or providing goods and services, including the right to the payment of Finance Charges and other obligations of such Obligor with respect thereto;

(c) in the case of the Parent,

(i) all existing and hereafter arising indebtedness of an Obligor (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to the Parent under a Contract:

(A) (x) created, generated or arising in the ordinary course of the business of Bombardier Inc. of selling or providing goods and services under the name of or in connection with the activities conducted through its Utility Vehicles Division or its Outboard Engine Division and (y) acquired by the Parent (or any predecessor of the Parent) from Bombardier Inc.; or

(B) created, generated or arising in the ordinary course of the business of the Parent of selling or providing goods and services under the name of or in connection with its activities as conducted through its Utility Vehicles Division or its Outboard Engine Division; or

(ii) all existing and hereafter arising indebtedness of John Deere Inc. (including, without limitation, a claim, account, book debt, receivable, instrument, installment sales contract, chattel paper or general intangible) to the Parent under a Contract:

(A) (x) between John Deere Inc. and Bombardier Inc. created, generated or arising in the ordinary course of the business of Bombardier Inc. of selling or providing goods and services to John Deere Inc. and (y) acquired by the Parent (or any predecessor of the Parent) from Bombardier Inc.; and

(B) between John Deere Inc. and the Parent created, generated or arising in the ordinary course of the business of the Parent of selling or providing goods and services to John Deere Inc.; and

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in the case of (i) and (ii), including the right to the payment of all obligations of such Obligor with respect thereto but excluding Finance Charges payable under the related Contract but including PST and GST payable under the related Contract;

provided, however, that the term “Receivable” shall not include any Excluded Receivable. For greater clarity, it is understood and agreed that any distinct new line of business added to any of the businesses of an Originator referenced in the prior sentence after the date hereof shall not give rise to an Originator Receivable, unless otherwise agreed in writing by the Originators, the Seller and the Operating Agent and all filings considered necessary or advisable in the reasonable judgment of the Operating Agent or its assignee are made.

“Other Companies” means the Originators, the Parent and all of their Subsidiaries except the Seller.

“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof plus Finance Charges; provided, that to the extent that the amount of any Receivables is, under the terms of the applicable Contract, expressed in Canadian Dollars, Swedish Kronor, Norwegian Kroner or Euros, such amount for the purposes of this definition shall be the Dollar Equivalent thereof at the relevant time. GST, PST, VAT and United States sales taxes which may be billed in connection with a Receivable are included in the Outstanding Balance. Finance Charges which may be billed in connection with a Receivable originated by the Parent are not included in the Outstanding Balance.

“Parent” means Bombardier Recreational Products Inc., a Canadian corporation.

“Parent Servicer” means at any time the Servicer then authorized pursuant to Section 6.01 to perform the duties of the Parent Servicer.

“Percentage” of any Investor means, (a) with respect to BCI, the percentage set forth on the signature page to this Agreement, or such amount as reduced or increased by any Assignment and Acceptance entered into with an Eligible Assignee, or (b) with respect to an Investor that has entered into an Assignment and Acceptance, the amount set forth therein as such Investor’s Percentage, or such amount as reduced or increased by an Assignment and Acceptance entered into between such Investor and an Eligible Assignee.

“Permitted Liens” means:

(a) liens for taxes (including withholding taxes) and source deductions imposed by statutes, in each case, which are not yet due and delinquent or are being contested in good faith and for which the Person owing such taxes or source deductions has taken an adequate reserve in accordance with applicable generally accepted accounting principles;

(b) with respect to the Parent only, liens arising out of judgements or awards with respect to which appeals or other proceedings for review are being

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prosecuted in good faith and for the payment of which adequate reserves have been provided as required by applicable generally accepted accounting principles.

“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“Pool Receivable” means a Receivable in the Receivables Pool.

“PPSA” means, with respect to any jurisdiction in Canada, the personal property security or similar legislation applicable in such jurisdiction, including with respect to the jurisdictions of Canada other than Quebec, the Personal Property Security Act applicable in such jurisdictions, in each case as from time to time in effect.

“PST” means all taxes payable under the Retail Sales Tax Act (Ontario) or any similar statute of another jurisdiction of Canada, other than GST and QST.

“Purchase Limit” means $115,000,000, as such amount may be reduced pursuant to Section 2.0l(b). References to the unused portion of the Purchase Limit shall mean, at any time, the Purchase Limit, as then reduced pursuant to Section 2.01 (b), minus the then outstanding Capital of Receivable Interests under this Agreement.

“QST” means the tax payable under the Act Respecting the Quebec Sales Tax, R.S.Q. c.T-01, as amended.

“Receivable” means any account receivable of the Seller resulting from the provision or sale of goods or services by the Seller or any Originator in the normal course of business including any Originator Receivable which has been acquired by the Seller from the relevant Originator by purchase pursuant to the Originator Purchase Agreement.

“Receivable Interest” means, at any time, an undivided percentage ownership interest in (i) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.03, (ii) all Related Security with respect to such Pool Receivables, and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided percentage interest shall be computed as a fraction the numerator of which shall be the Capital of such Receivable Interest at the time of computation and the denominator of which shall be the sum of (a) the Net Receivables Pool Balance, (b) the Collections on deposit in the Deposit Accounts (less the portion of Collections held pursuant to Section 2.04(b)(i)) at the time of computation and (c) any cash held in the Deposit Accounts as a contribution to the capital of the Seller by Bombardier Motor. Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.03.

“Receivables Pool” means at any time the aggregation of each then outstanding Receivable.

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“Related Security” means with respect to any Receivable

(i) all of the Seller’s interest in any goods (including returned goods) relating to any sale giving rise to such Receivable;

(ii) all security interests or Adverse Claims and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements or registration applications filed against an Obligor describing any collateral securing such Receivable;

(iii) all guaranties, insurance, letters of credit and other agreements or arrangements (including rights under credit card agreements) of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise; and

(iv) the related invoices and purchase orders issued pursuant to a related Contract and all other books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

“S&P” means Standard and Poor’s, a division of The McGraw-Hill Companies, Inc.

“SEC” means the Securities and Exchange Commission.

“Secured Obligations” has the meaning given in Section 2.11 hereof.

“Seller Report” means the Monthly Seller Report and/or the Weekly Seller Report.

“Servicers” means at any time the Person or Persons then authorized pursuant to Section 6.01 to administer and collect Pool Receivables, including the Parent Servicer.

“Servicer Bankruptcy Event” means a proceeding of the type described in Section 7.01(g) instituted by or against any Servicer (without giving effect to any grace period provided therein).

“Servicer Fee” has the meaning specified in Section 2.05(a).

“Settlement Date” for any Receivable Interest means the last day of each Fixed Period for such Receivable Interest.

“Subsidiary” means any corporation or other entity or Person of which securities having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by the Seller or one or

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more Originators, as the case may be, or one or more Subsidiaries, or by the Seller or one or more Originators, as the case may be, and one or more Subsidiaries.

“Swedish Kronor” means the lawful currency of Sweden.

“Tangible Net Worth” means at any time the excess of (i) the sum of (a) the product of (x) 100% minus the Discount (as such term is defined in the Originator Purchase Agreement) multiplied by (y) the Outstanding Balance of all Receivables other than Defaulted Receivables plus (b) cash and cash equivalents of the Seller, minus (ii) the sum of (a) Capital plus (b) the Deferred Purchase Price.

“Termination Date” for any Receivable Interest means, in the case of a Receivable Interest owned by an Investor, the earlier of (i) the Business Day which the Seller so designates by notice to the Operating Agent at least one Business Day in advance for such Receivable Interest and (ii) the Facility Termination Date.

“Transaction Document” means any of this Agreement, the Originator Purchase Agreement, the Deposit Account Agreements, the Undertakings, the Letter Agreement referred to in Section 2.05(b) and all other agreements entered into (i) by an Originator, the Seller or an Originator, as Servicer with or in favor of any one or more of the Seller, the Operating Agent or the Investors or (ii) among the Originators and the Seller, in each case relating to the transactions referred to in this Agreement.

“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

“Undertakings” means each of the Undertaking Agreements dated as of the date hereof made by (a) the Parent in favor of the Seller and relating to obligations of Bombardier Motor and the Nordtrac Group and (b) Bombardier Motor in favor of the Seller and relating to the obligations of the Nordtrac Group, substantially in the form of Annexes F-l and F-2, respectively, hereto.

“VAT” means any value added tax payable on Receivables originated by the Nordtrac Group.

“Weekly Seller Report” means a report substantially in the form of Annex A-2 hereto and containing such additional information reasonably available to the Parent Servicer as the Operating Agent may reasonably request from time to time, furnished by the Parent Servicer to the Operating Agent pursuant to Section 6.02(g).

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“Yield” means for each Receivable Interest for each Fixed Period, for each day during such Fixed Period,

		AR x C x	ED	+LF
			360
where:
AR	=	the Applicable Rate for such Receivable Interest for such Fixed Period
C	=	the Capital of such Receivable Interest during such Fixed Period
ED	=	the actual number of days elapsed during such Fixed Period
LF	=	the Liquidation Fee, if any, for such Receivable Interest for such Fixed Period

provided that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; and provided further that Yield for any Receivable Interest shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

SECTION 1.02. Other Terms. Subject to the following sentence, all accounting terms not specifically defined herein shall be construed in accordance with U.S. generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. References to any agreement or document herein are to such agreement or document as amended, modified or restated from time to time in accordance with its terms, whether or not so specified.

ARTICLE II

AMOUNTS AND TERMS OF THE PURCHASES

SECTION 2.01. Purchase Facility. (a) On the terms and conditions hereinafter set forth, the Investors shall, ratably in accordance with their respective Investor Commitments, purchase Receivable Interests from the Seller from time to time during the period from the date hereof to the Facility Termination Date. Under no circumstances shall the Investor be obligated to make any such purchase if after giving effect to such purchase the aggregate outstanding Capital of Receivable Interests would exceed the Purchase Limit.

(b) The Seller may at any time, upon at least five Business Days’ notice to the Operating Agent, terminate the facility provided for in this Agreement in whole or, from time to time, reduce in part the unused portion of the Purchase Limit; provided that each partial reduction shall be in the amount of at least $1,000,000 or an integral multiple thereof.

(c) The Operating Agent, on behalf of the Investors which own Receivable Interests, shall have the Collections attributable to such Receivable Interests automatically

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reinvested pursuant to Section 2.04 in additional undivided percentage interests in the Pool Receivables resulting in a recomputation of such Receivable Interests pursuant to Section 2.03.

(d) Provided no Event of Termination or Incipient Event of Termination is continuing or would result, upon the request of the Seller, the Operating Agent shall remove an Originator (without releasing such Originator from any accrued obligations hereunder) and all thereafter arising Originator Receivables originated by such Originator from this Agreement and the other Transaction Documents; provided that the Nordtrac Group shall only be removed as an entirety and shall constitute a single Originator for purposes of this Section 2.01(d) and provided further that, upon the removal of such Originator from this Agreement and the other Transaction Documents, the Operating Agent on behalf of the Investors shall have the right as a condition to such removal to require that all Receivables in the Receivables Pool originated by such Originator shall be simultaneously repurchased by any of the remaining Originators or its designee at a purchase price equal to the fair value (as agreed by such Originator and the Operating Agent) of all Eligible Receivables originated by such removed Originator then in the Receivables Pool but not less than the sum of the Receivable Interests expressed as a percentage as of the date of removal multiplied by the Outstanding Balance of all Eligible Receivables originated by such removed Originator then in the Receivables Pool, plus, in either case, all accrued but unpaid Yield on Capital respecting such Eligible Receivables.

SECTION 2.02. Making Purchases. (a) Each purchase of a Receivable Interest by the Investors shall be made (i) on at least one Business Day’s notice, if Yield for such Receivable Interest is to be calculated based on the Alternate Base Rate, and (ii) on at least three Business Days’ notice, if Yield for such Receivable Interest is to be calculated based on the Eurodollar Rate, in each case from the Seller to the Operating Agent. In no event shall more than one purchase be made in any one calendar month. Purchases after the initial Purchase shall occur only on the first Business Day following delivery of the Monthly Seller Report pursuant to Section 6.02(g) for the prior reporting period. Each such notice of a purchase shall specify (i) the amount requested to be paid to the Seller (such amount, which shall not be an amount between zero and less than $1,000,000, being referred to herein as the initial “Capital” of the Receivable Interest then being purchased) and (ii) the date of such purchase.

The Operating Agent shall promptly send notice of the proposed purchase to all of the Investors concurrently by telecopier, telex or cable specifying the date of such purchase, each Investor’s Percentage multiplied by the aggregate amount of Capital of Receivable Interest being purchased and whether the Yield for the Fixed Period for such Receivable Interest is calculated based on the Eurodollar Rate (which may be selected only if such notice is given at least three Business Days prior to the purchase date) or the Alternate Base Rate.

(b) On the date of each such purchase of a Receivable Interest, the Investors shall, upon satisfaction of the applicable conditions set forth in Article III, make available to the Seller in same day funds an amount equal to the initial Capital of such Receivable Interest, at the account set forth in the Funds Transfer Letter.

(c) Effective on the date of each purchase pursuant to this Section 2.02 and each reinvestment pursuant to Section 2.04, the Seller hereby sells and assigns to the Operating Agent, for the benefit of the Investors, an undivided percentage ownership interest, to the extent

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of the Receivable Interest then being purchased, in each Pool Receivable then existing and in the Related Security and Collections with respect thereto.

(d) Notwithstanding the foregoing, an Investor shall not be obligated to make purchases under this Section 2.02 at any time in an amount which would exceed such Investor’s Investor Commitment less such Investor’s ratable share of the aggregate outstanding Capital, after giving effect to any reductions of the Capital to be made on the date of such purchase (whether from the distribution of Collections or from the proceeds of purchases by the Investors). Each Investor’s obligation shall be several, such that the failure of any Investor to make available to the Seller any funds in connection with any purchase shall not relieve any other Investor of its obligation, if any, hereunder to make funds available on the date of such purchase, but no Investor shall be responsible for the failure of any other Investor to make funds available in connection with any purchase.

SECTION 2.03. Receivable Interest Computation. Each Receivable Interest shall be initially computed on its date of purchase. Thereafter until the Termination Date for such Receivable Interest, such Receivable Interest shall be recomputed by the Parent Servicer on each day on which funds are withdrawn from the Deposit Accounts for reinvestment in Receivables pursuant to Section 2.04(b)(ii) and Section 2.04(c). Any Receivable Interest shall be computed as of the day immediately preceding the Termination Date for such Receivable Interest and shall thereafter remain constant; provided, however, that from and after the date on which the Termination Date shall have occurred for all Receivable Interests and until each Receivable Interest becomes zero in accordance with the next sentence, each Receivable Interest shall be calculated as the percentage equivalent of a fraction the numerator of which is the percentage representing such Receivable Interest immediately prior to such date and the denominator of which is the sum of the percentages representing all Receivable Interests which were outstanding immediately prior to such date. Each Receivable Interest shall become zero when Capital thereof and Yield thereon shall have been paid in full, and all other amounts owed by the Seller hereunder to the Investors or the Operating Agent are paid and the Parent Servicer shall have received the accrued Servicer Fee thereon.

SECTION 2.04. Settlement Procedures. (a) Collection of the Pool Receivables shall be administered by the Servicers, in accordance with the terms of Article VI of this Agreement. The Seller shall provide to the Servicers (if other than the Seller) on a timely basis all information needed for such administration, including notice of the occurrence of any Liquidation Day and current computations of each Receivable Interest.

(b) The Parent Servicer shall allocate Collections on deposit in the Deposit Accounts in the following order of priority:

(i) with respect to each Receivable Interest, the Parent Servicer shall hold in trust and segregate (by retention in the relevant Deposit Account) for the Investors that hold such Receivable Interest, out of the percentage of such Collections represented by such Receivable Interest, an amount equal to the Yield, Servicer Fee and the BCI Subservicer Fee accrued through the date of allocation for such Receivable Interest and not previously set aside;

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(ii) with respect to each Receivable Interest, if no Liquidation Day for such Receivable Interest has occurred and is then continuing, the Parent Servicer shall apply the percentage of such Collections represented by such Receivable Interest (w) to reinvest with the Seller on behalf of the Investors that hold such Receivable Interest by recomputation of such Receivable Interest pursuant to Section 2.03, (x) after accounting for such reinvestment, as may be required to prevent the aggregate Receivable Interest from exceeding the Maximum Purchaser Interest, to reduce the outstanding Capital of such Receivable Interest, (y) in any combination of the allocations set forth in clauses (w) and (x), or (z) to further reduce the outstanding Capital of such Receivable Interest (after giving effect to clauses (w), (x) and (y));

(iii) if a Liquidation Day for any one or more Receivable Interests has occurred and is continuing, apply to the outstanding Capital of each such Receivable Interest and to any other amounts payable by the Seller hereunder (x) if such day is a Liquidation Day for less than all of the Receivable Interests, the percentage of such Collections represented by such Receivable Interests, and (y) if such day is a Liquidation Day for all of the Receivable Interests, all of the remaining Collections (but not in excess of the Capital of such Receivable Interests and any other amounts payable by the Seller hereunder); and

(iv) during such times as amounts are permitted to be reinvested in accordance with the foregoing subsection (ii) and Section 2.04(c), release to the Seller for its own account any Collections remaining after application of subsection (i) and (ii) above and the distribution of such amounts pursuant to Section 2.04(c).

The Parent Servicer shall be responsible for the application of all Collections received in any Deposit Account in accordance with the foregoing subsections (i) through (iv) on a Dollar Equivalent basis but may accomplish such application itself or jointly with one or more of the other Servicers.

(c) The Parent Servicer shall deposit into the Operating Agent’s Account, on the Settlement Date for each Receivable Interest, Collections held for the Investors that relate to such Receivable Interest pursuant to Section 2.04(b)(i) in the amount of accrued Yield, Servicer Fee and BCI Subservicer Fee through the most recent completed Fixed Period ending on or prior to such Settlement Date. The Parent Servicer shall make withdrawals from the Deposit Accounts pursuant to the allocations set forth in Sections 2.04(b)(ii), (iii) or (iv) on each Settlement Date and otherwise at its discretion but no less frequently then weekly and shall deposit into the Operating Agent’s Account on the date of such withdrawal all amounts so withdrawn and not either applied to reinvestment in the Receivables or released to the Seller to the extent permitted by Section 2.04(b)(iv). No withdrawal from the Deposit Accounts for reinvestment in Receivables and no release pursuant to Section 2.04(b)(iv) may occur if after giving effect to such reinvestment or release the sum of the Receivable Interests, each expressed as a percentage, would be greater than the Maximum Purchaser Interest or an Event of Termination would be continuing. The Parent Servicer shall deposit any amounts paid pursuant to Section 2.0l(d) into the Operating Agent’s Account.

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(d) Upon receipt of funds deposited into the Operating Agent’s Account, the Operating Agent shall distribute them as follows:

(i) if the date of distribution is a Settlement Date, first, to the Investors in payment in full of all accrued Yield, second to BCI in payment in full of all accrued BCI Subservicer Fee, third to the Parent Servicer in payment in full of all accrued Servicer Fee, fourth to such Investors in reduction to zero of all Capital, and fifth to such Investors or the Operating Agent in payment of any other amounts owed by the Seller hereunder; and

(ii) if the date of distribution is not a Settlement Date, first, to the Investors in payment in full of such portion, if any, of accrued Yield as the Operating Agent in its discretion shall deem, second to such Investors in reduction to zero of all Capital, and third to such Investors or the Operating Agent in payment of any other amounts (including accrued and unpaid Yield) owed by the Seller hereunder.

After the Capital, Yield and BCI Subservicer Fee with respect to a Receivable Interest, and any other amounts payable by the Seller to the Investors or the Operating Agent hereunder, have been paid in full and any contingent obligations of the Operating Agent under any Deposit Account Agreement have been released, all additional Collections with respect to such Receivable Interest shall be paid to the Seller for its own account.

(e) For the purposes of this Section 2.04:

(i) if on any day the Outstanding Balance of any Pool Receivable becomes (in whole or in part) a Diluted Receivable, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in the amount of such Diluted Receivable;

(ii) if on any day any of the representations or warranties contained in Section 4.0l(h) is no longer true with respect to any Pool Receivable, the Seller shall be deemed to have received on such day a Collection of such Pool Receivable in full;

(iii) except as provided in subsection (i) or (ii) of this Section 2.04(e), or as otherwise required by applicable law or the relevant Contract, all Collections received from an Obligor of any Receivables shall be applied to the Receivables of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, unless such Obligor designates its payment for application to specific Receivables; and

(iv) if and to the extent the Operating Agent or the Investors shall be required for any reason to pay over to an Obligor any amount received on its behalf hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Seller and, accordingly, the Operating Agent or the Investors, as the case may be, shall have a claim against the Seller for such

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amount, payable when and to the extent that any distribution from or on behalf of such Obligor is made in respect thereof;

provided, that, so long as an Event of Termination has not occurred and is not continuing, the Seller shall have no obligation to make any payment in respect of deemed Collections so long as the sum of the Receivable Interests, each expressed as a percentage, shall continue to be less than or equal to the Maximum Purchaser Interest.

(f) All amounts payable by the Seller or any Servicer under this Agreement to the Operating Agent for its own account or for the account of the Investors shall be paid in Dollars. The purchase price for Receivable Interests and all other amounts payable by the Investors under this Agreement shall be payable in Dollars.

(g) While this Agreement is in effect, the settlement procedures set forth in Section 2.04(c) shall prevail over the first sentence of Section 2.03 of the Originator Purchase Agreement.

SECTION 2.05. Fees, (a) The Operating Agent as agent for each Investor shall pay to the Servicers (other than the Parent Servicer) a single aggregate fee (the “Servicer Fee”) of 1/4 of 1% per annum on the average daily Capital of each Receivable Interest owned by such Investor, from the date of purchase of such Receivable Interest until the later of the Termination Date for such Receivable Interest or the date on which such Capital is reduced to zero, payable on the Settlement Date for such Receivable Interest. Upon three Business Days’ notice to the Operating Agent, the Parent Servicer (if not the Parent, another Originator, the Seller or its designee or an Affiliate of the Seller) may elect on behalf of the Servicers to be paid, as such fee, another percentage per annum on the average daily Capital of such Receivable Interest, but in no event in excess for all Receivable Interests relating to the Receivables Pool of 110% of the reasonable costs and expenses of the Servicers in administering and collecting the Receivables in the Receivables Pool. The Servicer Fee shall be payable to the Parent Servicer for distribution pro rata to all the other Servicers only from Collections pursuant to, and subject to the priority of payment set forth in, Section 2.04. So long as the Parent is acting as the Parent Servicer hereunder, amounts paid as the Servicer Fee pursuant to this Section 2.05(a) shall reduce, on a dollar-for-dollar basis, the obligation of the Seller to pay the “Servicer Fee” pursuant to Section 6.03 of the Originator Purchase Agreement, provided that such obligation of the Seller shall in no event be reduced below zero.

(b) The Operating Agent on behalf of Bombardier Motor shall pay the BCI Subservicing Fee due to BCI under the Letter Agreement, dated the date hereof, between BCI and Bombardier Motor.

SECTION 2.06. Payments and Computations, Etc. (a) All amounts to be paid or deposited by the Seller or any Servicer hereunder shall be paid or deposited no later than 11:00 A.M. (New York City time) on the day when due in same day funds to the Operating Agent’s Account.

(b) All computations of Yield, fees, and other amounts hereunder shall be made in Dollars on the basis of a year of 360 days for the actual number of days (including the

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first but excluding the last day) elapsed. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit.

SECTION 2.07. Dividing or Combining Receivable Interests. Either the Seller or the Operating Agent may, upon notice to the other party received at least three Business Days prior to the last day of any Fixed Period in the case of the Seller giving notice, or up to the last day of such Fixed Period in the case of the Operating Agent giving notice, either (i) divide any Receivable Interest into two or more Receivable Interests having aggregate Capital equal to the Capital of such divided Receivable Interest, or (ii) combine any two or more Receivable Interests originating on such last day or having Fixed Periods ending on such last day into a single Receivable Interest having Capital equal to the aggregate of the Capital of such Receivable Interests.

SECTION 2.08. Increased Costs. (a) If any Investor, any entity which purchases or enters into a commitment to purchase Receivable Interests or interests therein, or any of their respective Affiliates (each an “Affected Person”) determines that by reason of any change therein after the date of this Agreement compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of the capital required or expected to be maintained by such Affected Person and such Affected Person determines that the amount of such capital is increased by or based upon the existence of any commitment to make purchases of or otherwise to maintain the investment in Pool Receivables or interests therein related to this Agreement or to the funding thereof and other commitments of the same type, then, upon written demand by such Affected Person (with a copy to the Operating Agent), the Seller shall promptly, but in no event more than 10 Business Days after such demand, pay to the Operating Agent for the account of such Affected Person (as a third-party beneficiary), from time to time as specified by such Affected Person, additional amounts sufficient to compensate such Affected Person in the light of such circumstances, to the extent that such Affected Person reasonably determines such increase in capital to be allocable to the existence of any of such commitments.

(b) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements referred to in Section 2.09) in or in the interpretation of any law or regulation or (ii) compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law) issued or made after the date of this Agreement, there shall be any increase in the cost to any Investor of agreeing to purchase or purchasing, or maintaining the ownership of Receivable Interests in respect of which Yield is computed by reference to the Eurodollar Rate, then, upon written demand by such Investor (with a copy to the Operating Agent), the Seller shall promptly, but in no event more than 10 Business Days after such demand, pay to the Operating Agent, for the account of such Investor (as a third-party beneficiary), from time to time as specified by such Investor, additional amounts sufficient to compensate such Investor for such increased costs.

(c) A certificate of the Affected Person setting forth such amount or amounts (including the basis of calculation of such amount or amounts) as shall be necessary to compensate an Affected Person as specified in paragraph (a) or (b) above, as the case may be,

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shall be delivered to the Seller and shall constitute prima facie evidence of such compensation payable to such Affected Person in the absence of manifest error. Such Affected Person shall also provide the Seller and the Operating Agent (if other than the Affected Person) a photocopy of the applicable law, rule, guideline, regulation, treaty or official directive. Such Affected Person shall be entitled to be paid such additional compensation from time to time to the extent that the provisions of this Section 2.08 are then applicable notwithstanding that such Affected Person has previously been paid any additional compensation. Such Affected Person shall make commercially reasonable efforts to limit the incidence of any such additional compensation, including seeking recovery for the account of the Seller, by appealing any assessment at the expense of the Seller upon the Seller’s request, provided such Affected Person, in its sole determination, suffers no appreciable economic, legal, regulatory or other disadvantage.

SECTION 2.09. Additional Yield on Receivable Interests Bearing a Eurodollar Rate. The Seller shall pay to any Investor, so long as such Investor shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional Yield on the unpaid Capital of each Receivable Interest of such Investor during each Fixed Period in respect of which Yield is computed by reference to the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all times during such Fixed Period to the remainder obtained by subtracting (i) the Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing such Eurodollar Rate referred to in clause (i) above by that percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Investor for such Fixed Period, payable on each date on which Yield is payable on such Receivable Interest. Such additional Yield shall be determined by such Investor and notice thereof given to the Seller through the Operating Agent within 30 days after any Yield payment is made with respect to which such additional Yield is requested. A certificate as to such additional Yield submitted to the Seller and the Operating Agent by such Investor shall be conclusive and binding for all purposes, absent manifest error.

SECTION 2.10. Taxes. (a) Any and all payments and deposits required to be made hereunder or under any other Transaction Document by any Servicer, any Originator or the Seller shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes that are imposed on an Affected Person by the United States (other than withholding taxes) and franchise taxes and net income taxes (or equivalent taxes computed under alternative methods, at least one of which is based on net income) that are imposed on an Affected Person by the state or foreign jurisdiction under the laws of which such Affected Person is organized or any political subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If any Servicer, any Originator or the Seller shall be required by law to deduct any Taxes from or in respect of any sum payable or deposited hereunder to (or for the benefit of) any Affected Person, (i) the Seller shall make an additional payment to such Affected Person, in an amount sufficient so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.10), such Affected Person receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Seller or such Servicer, as the case may be, shall make such deductions and (iii) the Seller or such Servicer, as the case may be,

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shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Seller agrees to pay any present or future stamp or other documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any other Transaction Document or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Transaction Document, other than U.S. federal taxes except for withholding taxes on interest (hereinafter referred to as “Other Taxes”).

(c) The Seller will indemnify each Affected Person for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.10 and excluding Taxes and Other Taxes resulting from such Affected Person’s gross negligence or willful misconduct) paid by such Affected Person or deducted from any Collections (including any Taxes or amounts on account of Taxes deducted by any Obligor) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within thirty days from the date the Affected Person makes written demand therefor (and a copy of such demand shall be delivered to the Operating Agent (if other than the Affected Person)). A certificate as to the amount of such indemnification submitted to the Seller and the Operating Agent (if other than the Affected Person) by such Affected Person, setting forth, in reasonable detail, the basis for and the calculation thereof, shall be conclusive and binding for all purposes absent manifest error.

(d) Each Affected Person which is organized outside the United States (or, in the case of any Person which becomes an Affected Person after the date hereof, on the date on which it so becomes an Affected Person with respect to any payments under this Agreement) shall, on or prior to the date hereof (or, in the case of any Person who becomes an Affected Person after the date hereof, on or prior to the date on which it so becomes an Affected Person), deliver to the Seller such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as amended or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form W-8BEN or Form W-8ECI and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1 or Section 1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Affected Person as will, insofar as the laws of the United States are applicable, permit such payments to be made without withholding. Each such Affected Person shall from time to time thereafter, upon written request from the Seller, deliver to the Seller any new certificates, documents or other evidence as described in the preceding sentence as will, insofar as the laws of the United States are applicable, permit payments under this Agreement to be made without withholding or at a reduced rate (but only so long as such Affected Person is legally able to do so).

(e) The Seller shall not be required to pay any amounts to any Affected Person in respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and (c) above to the extent the obligation to pay such amounts is attributable to the failure by such Affected Person to comply with the provisions of paragraph (d) above; provided, however, that should an Affected Person become subject to Taxes because of its failure to deliver a form required hereunder, the

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Seller and the applicable Servicer shall take such steps as such Affected Person shall reasonably request to assist such Affected Person to recover such Taxes.

SECTION 2.11. True Sales. The parties intend the transfers of Receivable Interests hereunder to be absolute conveyances by the Seller to the Investors that are absolute and irrevocable and that provide the Investors with the full benefits of ownership of the Receivable Interests, and the other property of Seller referred to in clauses (A), (B), (C) and (D) below and (other than for tax purposes) none of the parties intend the transactions contemplated hereunder to be, or for any purpose to be characterized as, loans from the Investors to the Seller. Without limiting or otherwise affecting the preceding sentence, for tax purposes, the transactions contemplated by this Agreement and the Originator Purchase Agreement will be treated as a financing by Bombardier Motor. The parties agree that the foregoing sales of Receivable Interests constitute sales of “accounts” as described in the UCC, and that this Agreement shall create a security interest in favor of the Investors as the purchasers of the Receivable Interests. Notwithstanding such intent, if the arrangements with respect to the Receivable Interests hereunder are deemed for any purpose to constitute a loan and not a purchase and sale of such Receivable Interests, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and accordingly, as collateral security for the performance by the Seller of all the terms, covenants and agreements on the part of the Seller (whether as Seller or otherwise) to be performed under this Agreement or any document delivered in connection with this Agreement in accordance with the terms thereof, including the punctual payment when due of all obligations of the Seller hereunder or thereunder, whether for indemnification payments, fees, expenses or otherwise (collectively, the “Secured Obligations”), the Seller hereby assigns to the Operating Agent for its benefit and the ratable benefit of the Investors, and hereby grants to the Operating Agent for its benefit and the ratable benefit of the Investors, a security interest in, all of the Seller’s right, title and interest in and to (A) the Originator Purchase Agreement and the Undertakings, including, without limitation, (i) all rights of the Seller to receive moneys due or to become due under or pursuant to the Originator Purchase Agreement or the Undertakings, (ii) all security interests and property subject thereto from time to time purporting to secure payment of monies due or to become due under or pursuant to the Originator Purchase Agreement or the Undertakings, (iii) all rights of the Seller to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Originator Purchase Agreement or the Undertakings, (iv) claims of the Seller for damages arising out of or for breach of or default under the Originator Purchase Agreement or the Undertakings, and (v) the right of the Seller to compel performance and otherwise exercise all remedies thereunder, (B) all Receivables, whether now owned and existing or hereafter acquired or arising, the Related Security with respect thereto and the Collections, including, without limitation, all accounts and chattel paper (as those terms are defined in the UCC), including undivided interests in any of the foregoing, (C) the Deposit Accounts and (D) to the extent not included in the foregoing, all other proceeds of any and all of the foregoing.

SECTION 2.12. Sharing of Payments. If any Investor (for purposes of this Section only, referred to as a “Recipient”) shall obtain payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of the Capital of, or Yield on, any Receivable Interest or portion thereof owned by it in excess of its ratable share of payments made on account of the Capital of, or Yield on, all of the Receivable Interests owned

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by the Investors (other than as a result of a payment of Liquidation Fee or different methods for calculating Yield), such Recipient shall forthwith purchase from the Investors which received less than their ratable share participations in the Receivable Interests owned by such Persons as shall be necessary to cause such Recipient to share the excess payment ratably with each such other Person; provided, however, that if all or any portion of such excess payment is thereafter recovered from such Recipient, such purchase from each such other Person shall be rescinded and each such other Person shall repay to the Recipient the purchase price paid by such Recipient for such participation to the extent of such recovery, together with an amount equal to such other Person’s ratable share (according to the proportion of (a) the amount of such other Person’s required payment to (b) the total amount so recovered from the Recipient) of any interest or other amount paid or payable by the Recipient in respect of the total amount so recovered.

SECTION 2.13. Cutoff Date. Notwithstanding the date of this Agreement, the initial purchase of Receivable Interests hereunder shall apply to, and the initial monthly Seller Report to be provided shall be calculated with respect to, all Originator Receivables and Related Security outstanding at the close of business on December 12, 2003. All Collections in respect thereof received after December 12, 2003 shall be subject to this Agreement.

ARTICLE III

CONDITIONS OF PURCHASES

SECTION 3.01. Conditions Precedent to Initial Purchase. The initial purchase of a Receivable Interest under this Agreement is subject to the conditions precedent that:

(a) The transactions contemplated by the Bombardier Inc. Purchase Agreement shall have been consummated on or before the date of such purchase; and

(b) The Operating Agent shall have received on or before the date of such purchase the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Operating Agent:

(i) Certified copies of the resolutions of the Board of Directors or equivalent body of the Seller and each of the Originators approving this Agreement and any other Transaction Documents to which it is a party and certified copies of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Agreement and any such other Transaction Documents.

(ii) A certificate of the Managing Director, Secretary or Assistant Secretary of the Seller and each of the Originators certifying the names and true signatures of the officers of the Seller and each of the Originators authorized to sign this Agreement, the other Transaction Documents and the other documents to be delivered by it hereunder and thereunder.

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(iii) Acknowledgment copies or time stamped receipt copies (or other satisfactory evidence of filing) of proper financing statements, duly filed on or before the date of such initial purchase under the UCC and PPSA or other applicable law of all jurisdictions (other than the Province of Quebec) and copies of proper forms RG for registration under the laws of the Province of Quebec, in each case that the Operating Agent may deem necessary or desirable in order to perfect or render opposable the ownership and security interests contemplated by this Agreement and the other Transaction Documents.

(iv) Acknowledgment copies or time stamped receipt copies of proper financing statements, if any, necessary to release all security interests and other rights of any Person in (i) the Receivables, Contracts or Related Security previously granted by the Seller or any Originator and (ii) the collateral security referred to in Section 2.11 previously granted by the Seller including, (a) without limitation, the liens and charges currently registered with respect to Bombardier Nordtrac AB in Sweden and (b) UCC and other equivalent forms executed by the Bank of Montreal as Administrative Agent under the Originators’ bank credit facility.

(v) Completed requests for information, dated on or before the date of such initial purchase, listing all effective financing statements filed in the jurisdictions referred to in subsection (iii) above that name the Seller or any Originator as debtor, together with copies (except that copies will not be required for jurisdictions outside the United States) of such financing statements (none of which shall cover any Receivables, Contracts, Related Security or the collateral security referred to in Section 2.11).

(vi) An executed copy of each of the Deposit Account Agreements.

(vii) A favorable opinion or opinions of (i) Ropes & Gray LLP, U.S. counsel for the Seller, Bombardier Motor and the Parent, (ii) Osler, Hoskin & Harcourt, LLP, Canadian counsel for the Parent and (iii) Advokatfirman Vinge KB, Thommessen Krefting Greve Lund AS Advokatfirma and Hannes Snellman Attorneys at Law Ltd., Swedish, Norwegian and Finnish counsel for the members of the Nordtrac Group, substantially in the forms of Annexes C-l, C-2, C-3, C-4 and C-5 hereto and as to such other matters as the Operating Agent may reasonably request.

(viii) The Funds Transfer Letter.

(ix) An executed copy of the Originator Purchase Agreement, together with satisfactory evidence that all conditions precedent to the initial purchase thereunder have been satisfied.

(x) A copy of the by-laws or equivalent document of the Seller and each of the Originators, certified by the Manager, Secretary or Assistant Secretary of the Seller or the relevant Originator, as the case may be.

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(xi) A copy of the certificate or articles of incorporation or equivalent document of the Seller and each of the Originators, certified as of a recent date by the Secretary of State or other appropriate official of the state or country of its organization, and a certificate as to the good standing of the Seller and each Originator from such Secretary of State or other official, dated as of a recent date.

(xii) A letter from the Seller addressed to the Operating Agent setting forth, among other things, the Seller’s initial capital contribution and the amount of the Deferred Purchase Price immediately following the initial purchase under the Originator Purchase Agreement.

(xiii) An executed copy of each of the Undertakings.

(xiv) Executed copies of letters from CT Corporation accepting its appointment as agent for service of process for Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy, the Parent and the Servicers (other than Bombardier Motor) under any Transaction Document to which Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy, the Parent and such Servicers are parties.

(xv) A Monthly Seller Report prepared as of December 12, 2003.

(xvi) An executed copy of a Repurchase Agreement among BCL, BCI, the Seller and the Originators, in respect of the termination of BCL’s financing of the Nordtrac Group’s Receivables.

SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments. Each purchase (including the initial purchase) and each reinvestment shall be subject to the further conditions precedent that (a) in the case of each purchase, the Parent Servicer shall have delivered to the Operating Agent all completed Seller Reports required to have been delivered pursuant to Section 6.02(g) on or before such date and demonstrating that after giving effect to such purchase no Event of Termination or Incipient Event of Termination under Section 7.01 (h) would occur, (b) in the case of each reinvestment, the Parent Servicer shall have delivered to the Operating Agent on or prior to the date of such reinvestment, in form and substance satisfactory to the Operating Agent, all Seller Reports required to have been delivered pursuant to Section 6.02(g) on or before such date, (c) on the date of such purchase or reinvestment the following statements shall be true (and acceptance of the proceeds of such purchase or reinvestment shall be deemed a representation and warranty by the Seller and each Servicer (each as to itself) that such statement is then true):

(i) The representations and warranties contained in Sections 4.01 and 4.02 are correct in all material respects on and as of the date of such purchase or reinvestment as though made on and as of such date,

(ii) No event has occurred and is continuing, or would result from such purchase or reinvestment, that constitutes an Event of Termination or an Incipient Event of Termination, and

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(iii) The Originators shall have sold to the Seller, pursuant to the Originator Purchase Agreement, all Originator Receivables arising on or prior to such date, and

(d) The Operating Agent shall have received such other approvals, opinions or documents as it may reasonably request in connection with any changes in law or factual circumstances occurring after the date of this Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Seller. The Seller hereby represents and warrants as follows:

(a) The Seller is a limited liability company duly formed, validly existing and in good standing under the laws of Delaware, and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not have a material adverse effect on (i) the interests of the Investors hereunder, (ii) the collectibility of the Receivables Pool, or (iii) the ability of the Seller to perform its obligations hereunder.

(b) The execution, delivery and performance by the Seller of the Transaction Documents to which it is a party and the other documents to be delivered by it hereunder, including the Seller’s use of the proceeds of purchases and reinvestments, (i) are within the Seller’s limited liability company powers, (ii) have been duly authorized by all necessary limited liability company action, (iii) do not contravene (1) the Seller’s charter or by-laws or equivalent documents, (2) any law, rule or regulation applicable to the Seller, (3) any contractual restriction binding on or affecting the Seller or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting the Seller or its property, and (iv) do not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties (except for the interest created pursuant to this Agreement). Each of the Transaction Documents has been duly executed and delivered by the Seller.

(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Seller of the Transaction Documents or any other document to be delivered thereunder, except for the filing of UCC financing statements which are referred to therein.

(d) Each of the Transaction Documents constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms.

(e) The opening pro forma balance sheet of the Seller as at December 18, 2003, giving effect to the initial purchase to be made under this Agreement, a copy of which shall be furnished to the Operating Agent within 20 days after the date of this Agreement, fairly presents the pro forma financial condition of the Seller as at such date, in accordance with U.S.

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generally accepted accounting principles, and since December 18, 2003 there has been no material adverse change in the business, operations, property or financial or other condition of the Seller.

(f) There is no pending or threatened action, investigation or proceeding affecting the Seller before any court, governmental agency or arbitrator which may materially adversely affect the financial condition or operations of the Seller or the ability of the Seller to perform its obligations under the Transaction Documents.

(g) No proceeds of any purchase or reinvestment will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934.

(h) Immediately prior to the purchase by the Investor, the Seller is the legal and beneficial owner of the Pool Receivables, free and clear of any Adverse Claim other than Permitted Liens; upon each purchase or reinvestment, the Investors shall acquire a valid and perfected first priority undivided percentage ownership or security interest to the extent of the pertinent Receivable Interest in each Pool Receivable then existing or thereafter arising and Collections with respect thereto. No effective financing statement or other instrument similar in effect covering any Pool Receivable, any Contract related thereto or Collections with respect thereto is on file in any recording office, except those filed in favor of the Operating Agent relating to this Agreement and those filed by the Seller pursuant to the Originator Purchase Agreement. Each Receivable characterized in any Seller Report or other written statement made by or on behalf of the Seller as an Eligible Receivable or as included in the Net Receivables Pool Balance is, as of the date of such Seller Report or other statement, an Eligible Receivable or properly included in the Net Receivables Pool Balance. The Seller has not granted the right to any Person other than the Operating Agent to take dominion and/or control over any Deposit Account at a future time or upon the occurrence of a future event.

(i) Each Seller Report (if prepared by the Seller or one of its Affiliates, or to the extent that information contained therein is supplied by the Seller or an Affiliate), information, exhibit, financial statement, document, book, record or report furnished or to be furnished at any time by or on behalf of the Seller to the Operating Agent or the Investors in connection with this Agreement is or will be accurate in all material respects as of its date or (except as otherwise disclosed to the Operating Agent or Investors, as the case may be, at such time) as of the date so furnished, and no such document contains or will contain any untrue statement of a material fact.

(j) The principal place of business and chief executive office of the Seller and the office where the Seller keeps its records concerning the Pool Receivables are located at the address or addresses referred to in Section 5.01 (b).

(k) Each purchase of a Receivable Interest and each reinvestment of Collections in Pool Receivables will constitute (i) a “current transaction” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended, and (ii) a purchase or other acquisition of notes, drafts, acceptances, open accounts receivable or other obligations representing part or

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all of the sales price of merchandise, insurance or services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended.

(1) The Seller is not known by and does not use any tradename or doing-business-as name.

(m) The Seller was formed on December 9, 2003 and the Seller did not engage in any business activities prior to the date of this Agreement. The Seller has no Subsidiaries.

(n) (i) The fair value of the property of the Seller is greater than the total amount of liabilities, including contingent liabilities, of the Seller, (ii) the present fair salable value of the assets of the Seller is not less than the amount that will be required to pay all probable liabilities of the Seller on its debts as they become absolute and matured, (iii) the Seller does not intend to, and does not believe that it will, incur debts or liabilities beyond the Seller’s abilities to pay such debts and liabilities as they mature and (iv) the Seller is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which the Seller’s property would constitute unreasonably small capital.

(o) With respect to each Pool Receivable, the Seller shall have purchased such Pool Receivable from the relevant Originator in exchange for payment (made by the Seller to such Originator in accordance with the provisions of the Originator Purchase Agreement) of cash, Deferred Purchase Price, increase in equity investment or a combination thereof in an amount which constitutes fair consideration and reasonably equivalent value. Each such sale referred to in clause (ii) of the preceding sentence shall not have been made for or on account of an antecedent debt owed by an Originator to the Seller and no such sale is or may be voidable or subject to avoidance under any section of the Federal Bankruptcy Code.

SECTION 4.02. Representations and Warranties of the Servicers. Each Servicer hereby represents and warrants as to itself as follows:

(a) Such Servicer is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified to do business, and is in good standing (or, in the case of the Nordtrac Group, otherwise has proper authority to conduct business), in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not have a material adverse effect on (i) the interests of the Investors hereunder, (ii) the collectibility of the Receivables Pool, or (iii) the ability of the Servicer to perform its obligations hereunder.

(b) The execution, delivery and performance by such Servicer of this Agreement and any other documents to be delivered by it hereunder (i) are within such Servicer’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene (1) such Servicer’s charter or bylaws, (2) any law, rule or regulation applicable to the Servicer, (3) any contractual restriction binding on or affecting such Servicer or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting such Servicer or its property, and (iv) do not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties. This Agreement has been duly executed and delivered by such Servicer.

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(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Servicer of this Agreement or any other document to be delivered by it hereunder.

(d) This Agreement constitutes the legal, valid and binding obligation of such Servicer enforceable against the Servicer in accordance with its terms.

(e) Since December 18, 2003 there has been no material adverse change in the business, operations, property or financial or other condition of the Parent Servicer on a consolidated basis.

(f) There is no pending or, to such Servicer’s knowledge, threatened action, investigation or proceeding against such Servicer or any of its Subsidiaries before any court, governmental agency or arbitrator which is reasonably expected to materially adversely affect the ability of such Servicer to perform its obligations under this Agreement, or which purports to affect the legality, validity or enforceability of this Agreement.

(g) On the date of each purchase and reinvestment (and after giving effect thereto), the sum of the Receivable Interests is not greater than the Maximum Purchaser Interest on such date. Each Receivable characterized in any Seller Report as an Eligible Receivable or as included in the Net Receivables Pool Balance is, as of the date of such Seller Report, an Eligible Receivable or properly included in the Net Receivables Pool Balance.

ARTICLE V

COVENANTS

SECTION 5.01. Covenants of the Seller. Until the latest of the Facility Termination Date or the date on which no Capital of or Yield on any Receivable Interest shall be outstanding or the date all other amounts owed by the Seller hereunder to the Investors or the Operating Agent are paid in full:

(a) Compliance with Laws, Etc. The Seller will comply in all material respects with all applicable laws, rules, regulations and orders and preserve and maintain its corporate existence, rights, franchises, qualifications, and privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve and maintain such rights, franchises, qualifications, and privileges would not materially adversely affect the collectibility of the Receivables Pool or the ability of the Seller to perform its obligations under the Transaction Documents.

(b) Offices, Records, Name and Organization. The Seller will keep its principal place of business and chief executive office and the office where it keeps its records concerning the Pool Receivables at the address of the Seller set forth under its name on Schedule II hereto or, upon 10 days’ prior written notice to the Operating Agent, at any other locations within the United States. The Seller will not change its name or its jurisdiction of organization, unless (i) the Seller shall have provided the Operating Agent with at least 10 days’

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prior written notice thereof and (ii) no later than the effective date of such change, all actions reasonably requested by the Operating Agent to protect and perfect the interest in the Pool Receivables have been taken and completed. The Seller also will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Pool Receivables and related Contracts in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable and all Collections of and adjustments to each existing Pool Receivable).

(c) Performance and Compliance with Credit and Collection Policy. The Seller will, at its expense, timely and fully comply and/or cause the Servicers or their subcontractors to timely and fully comply in all material respects with the Credit and Collection Policy in regard to each Pool Receivable.

(d) Sales, Liens, Etc. Except for the ownership and security interests created hereunder in favor of the Operating Agent, the Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, the Seller’s undivided interest in any Pool Receivable, related Contract or Collections, or upon or with respect to any account to which any Collections of any Pool Receivable are sent, or assign any right to receive income in respect thereof.

(e) Extension or Amendment of Receivables. Except as provided in Section 6.02(c), the Seller will not extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related thereto.

(f) Change in Business or Credit and Collection Policy. The Seller will not make any change in the character of its business or in the Credit and Collection Policy that would, in either case, materially adversely affect the collectibility of the Receivables Pool or the ability of the Seller to perform its obligations under this Agreement.

(g) Deposit Accounts. The Seller will not terminate any Deposit Account.

(h) Deposits to Deposit Accounts. Until January 15, 2003, the Seller shall, and shall cause each Servicer (if it is the Parent or an Affiliate of the Parent) to, deposit all Collections which may be received by any Originator, the Seller or any Servicer in a Deposit Account no later than 2 Business Days (3 Business Days in the case of collections received in Canada) after receipt, and thereafter no later than the next Business Day Seller or a Servicer learns or should reasonably have learned of such receipt. No cash or cash proceeds other than Collections of Receivables will be deposited or otherwise credited to any Deposit Account.

(i) Marking of Records. At its expense, the Seller will mark its master data processing records evidencing Pool Receivables with a legend evidencing that Receivable Interests related to such Pool Receivables have been sold in accordance with this Agreement.

(j) Further Assurances. (i) The Seller agrees from time to time, at its expense, promptly to execute and deliver all further instruments and documents, and to take all

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further actions, that may be necessary or desirable, or that the Operating Agent may reasonably request, to perfect, protect or more fully evidence the Receivable Interests purchased under this Agreement, or to enable the Investors or the Operating Agent to exercise and enforce their respective rights and remedies under this Agreement.

(ii) The Seller authorizes the Operating Agent to file financing or continuation statements, and amendments thereto and assignments thereof, relating to the Pool Receivables and the Related Security and the Collections with respect thereto, copies of which financing statements only shall be promptly provided to the Seller.

(k) Reporting Requirements. The Seller will provide to the Operating Agent (in multiple copies, if requested by the Operating Agent) the following:

(i) as soon as available and in any event within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, an unaudited consolidated balance sheet of the Parent as of the end of such quarter and the related unaudited consolidated statements of income and statements of changes in financial position for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer of the Parent;

(ii) as soon as available and in any event within 120 days after the end of each fiscal year of the Parent, the audited consolidated balance sheet of the Parent as of the end of such fiscal year and the related statements of income and statements of changes in financial position for such fiscal year audited by independent public accountants of recognized standing;

(iii) as soon as available and in any event within 60 days after the end of each of the first three fiscal quarters and within 120 days after the end of the fourth fiscal quarter of each fiscal year of the Seller, an unaudited balance sheet of the Seller as of the end of such quarter and the related unaudited statements of income and statements of changes in financial position for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer of the Seller;

(iv) promptly and in any event within five Business Days after the occurrence of each Event of Termination or Incipient Bankruptcy Event of Termination of which the Seller has knowledge, a statement of the chief financial officer of the Seller setting forth details of such Event of Termination or Incipient Bankruptcy Event of Termination and the action that the Seller has taken and proposes to take with respect thereto;

(v) promptly after the sending or filing thereof, copies of all material information that the Parent sends to any of its security holders, and copies of all public registration statements, annual information forms, prospectuses and similar

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offering materials that the Parent or any of its Subsidiaries files with the SEC or any securities exchange in Canada;

(vi) promptly after the filing or receiving thereof, copies of all reports and notices that the Seller or any Affiliate files under ERISA with the Internal Revenue Service or the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or that the Seller or any Affiliate receives from any of the foregoing or from any multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA) to which the Seller or any Affiliate is or was, within the preceding five years, a contributing employer, in each case in respect of the assessment of withdrawal liability or an event or condition which could, in the aggregate, result in the imposition of liability on the Seller and/or any such Affiliate in excess of $5,000,000;

(vii) at least 10 days prior to any change in the name, head office or chief executive office or jurisdiction of organization of any Originator, a notice setting forth the new name, head office or chief executive office or jurisdiction of organization and the effective date thereof;

(viii) promptly after the Seller obtains knowledge thereof, notice of any “Event of Termination” or “Facility Termination Date” under the Originator Purchase Agreement;

(ix) so long as any Capital shall be outstanding, as soon as possible and in any event no later than the day of occurrence thereof, notice that an Originator has stopped selling to the Seller, pursuant to the Originator Purchase Agreement, all newly arising Originator Receivables;

(x) at the time of the delivery of the financial statements provided for in clauses (i) and (ii) of this paragraph, a certificate of the chief financial officer or the treasurer of the Seller to the effect that, to the best of such officer’s knowledge, no Event of Termination has occurred and is continuing or, if any Event of Termination has occurred and is continuing, specifying the nature and extent thereof;

(xi) promptly after receipt thereof, copies of all notices received by the Seller from any Originator under the Originator Purchase Agreement;

(xii) such other information respecting the Receivables or the condition or operations, financial or otherwise, of the Seller as the Operating Agent may from time to time reasonably request.

Reports and financial statements required to be delivered pursuant to clauses (i), (ii) and (v) of this Section 5.01(k) shall be deemed to have been delivered on the date on which the Parent posts such reports, or reports containing such financial statements, on the Parent’s website on the Internet or when such reports, or reports containing such financial statements, are posted on the SEC’s website at www.sec.gov; provided that the Parent shall deliver paper copies

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of the reports and financial statements referred to in clauses (i), (ii) and (v) of this Section 5.01 (k) to the Operating Agent or any Investor who requests the Parent to deliver such paper copies until written notice to cease delivering paper copies is given by the Operating Agent or such Investor, as applicable.

(l) Separateness. (i) The Seller shall at all times maintain at least one independent manager who (x) is not currently and has not been during the five years preceding the date of this Agreement an officer, director or employee of an Affiliate of the Seller or any Other Company (except as an independent manager of an Affiliate of the Seller which is a bankruptcy-remote special purpose entity), (y) is not a current or former officer or employee of the Seller and (z) is not a stockholder of any Other Company or any of their respective Affiliates.

(ii) The Seller shall not direct or participate in the management of any of the Other Companies’ operations.

(iii) The Seller shall conduct its business from an office separate from that of the Other Companies (but which may be located in the same facility as one or more of the Other Companies). The Seller shall have stationery and other business forms and a mailing address and a telephone number separate from that of the Other Companies.

(iv) The Seller shall at all times be adequately capitalized in light of its contemplated business.

(v) The Seller shall at all times provide for its own operating expenses and liabilities from its own funds except that common overhead expenses may be shared by the Seller and the Other Companies on a basis reasonably related to use.

(vi) The Seller shall maintain its assets and transactions separately from those of the Other Companies and reflect such assets and transactions in financial statements separate and distinct from those of the Other Companies and evidence such assets and transactions by appropriate entries in books and records separate and distinct from those of the Other Companies. The Seller shall hold itself out to the public under the Seller’s own name as a legal entity separate and distinct from the Other Companies. The Seller shall not hold itself out as having agreed to pay, or as being liable, primarily or secondarily, for, any obligations of the Other Companies.

(vii) The Seller shall not maintain any joint account with any Other Company or become liable as a guarantor or otherwise with respect to any Debt or contractual obligation of any Other Company.

(viii) The Seller shall not make any payment or distribution of assets with respect to any obligation of any Other Company or grant an Adverse Claim on any of its assets to secure any obligation of any Other Company.

(ix) The Seller shall not make loans, advances or otherwise extend credit to any of the Other Companies.

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(x) The Seller shall maintain all appropriate organizational formalities in accordance with the Delaware Limited Liability Company Act.

(xi) The Seller shall have bills of sale (or similar instruments of assignment) and, if appropriate, UCC-1 financing statements, with respect to all assets purchased from any of the Other Companies (in the case of the Receivables, as and to the extent provided by the Originator Purchase Agreement).

(xii) The Seller shall not engage in any transaction with any of the Other Companies, except as permitted by this Agreement and as contemplated by the Originator Purchase Agreement.

(xiii) The Seller shall comply with (and cause to be true and correct) each of the facts and assumptions contained in Part I (Assumptions of Fact) of the true sale and non-consolidation opinion of Ropes & Gray LLP delivered pursuant to Section 3.01(b)(vii) of this Agreement.

(m) Originator Purchase Agreement. The Seller will not amend, waive or modify any provision of the Originator Purchase Agreement (provided that the Seller may extend the “Facility Termination Date” thereunder) or waive the occurrence of any “Event of Termination” under the Originator Purchase Agreement, without in each case the prior written consent of the Operating Agent. The Seller will perform all of its obligations under the Originator Purchase Agreement in all material respects and will enforce the Originator Purchase Agreement in accordance with its terms in all material respects.

(n) Nature of Business. The Seller will not engage in any business other than the purchase of Receivables, Related Security and Collections from the Originators and the transactions contemplated by this Agreement. The Seller will not create or form any Subsidiary.

(o) Mergers, Etc. The Seller will not merge with or into or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions), all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets or capital stock or other ownership interest of, or enter into any joint venture or partnership agreement with, any Person, other than as contemplated by this Agreement and the Originator Purchase Agreement.

(p) Distributions, Etc. The Seller will not declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any equity interests of the Seller, or return any capital to its members as such, or purchase, retire, defease, redeem or otherwise acquire for value or make any payment in respect of any equity interests of the Seller or any warrants, rights or options to acquire any such interests, now or hereafter outstanding; provided, however, that the Seller may declare and pay dividends on its equity interests to its members so long as (i) no Event of Termination shall then exist or would occur as a result thereof, (ii) such dividends are in compliance with all applicable law including the Delaware Limited Liability Company Act, as amended, and (iii) such

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dividends have been approved by all necessary and appropriate limited liability company action of the Seller.

(q) Debt. The Seller will not incur any Debt, other than any Debt incurred pursuant to this Agreement and the Deferred Purchase Price.

(r) Limited Liability Company Agreement. The Seller will not amend or delete Articles 3, 7, 15 and 19.1 of its amended and restated limited liability company agreement.

(s) Tangible Net Worth. The Seller will maintain Tangible Net Worth at all times equal to at least 3% of the Outstanding Balance of the Receivables at such time.

SECTION 5.02. Covenant of the Seller and the Originators. Until the latest of the Facility Termination Date or the date on which no Capital of or Yield on any Receivable Interest shall be outstanding or the date all other amounts owed by the Seller hereunder to the Investors or the Operating Agent are paid in full, the Seller and each Originator will, at their respective expense, from time to time during regular business hours as reasonably requested by the Operating Agent, permit the Operating Agent or, as designated to the Seller and the Originators in writing, its agents or representatives (including independent public accountants, which may be the Seller’s or such Originator’s independent public accountants), (i) no later than 60 days after the date of this Agreement, to conduct a post-closing audit of the Receivables Pool to determine compliance with this Agreement, (ii) in addition to the audit referred to in clause (i) above, no more than once each year commencing January 1, 2004 (unless an Event of Termination has occurred and is continuing or a deficiency was discovered during the previous audit, in which case such limitation shall not apply), to conduct periodic audits of the Receivables, the Related Security and the related books and records and collections systems of the Seller or such Originator, as the case may be, (iii) no more than once each year commencing January 1, 2004 (unless an Event of Termination has occurred and is continuing or a deficiency was discovered during the previous audit referred to in clause (ii) above, in which case such limitation shall not apply), to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of the Seller or such Originator, as the case may be, relating to Pool Receivables and the Related Security, including, without limitation, the Contracts related thereto, subject, however, to any confidentiality restrictions, and (iv) to visit the offices and properties of the Seller or such Originator, as the case may be, for the purpose of examining such materials described in clause (ii) above, and to discuss matters relating to Pool Receivables and the Related Security or the Seller’s or such Originator’s performance under the Transaction Documents or under the Contracts relating to Pool Receivables with any of the officers or employees of the Seller or such Originator, as the case may be, having knowledge of such matters. The foregoing rights shall be exercised at such reasonable time or times as will not interfere with the normal operations of the Seller and the Originators. In addition, upon the Operating Agent’s request no more than once per year commencing January 1, 2004, the Seller will, at its expense, appoint independent public accountants (which may be selected by the Operating Agent, if an Event of Termination shall then exist or if an audit deficiency was discovered during the previous audit, and otherwise shall be selected by mutual agreement of the Operating Agent and the Seller and may be the Seller’s regular independent public accountants), or utilize the Operating Agent’s representatives or auditors, to prepare and deliver to the Operating Agent a written report with

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respect to the Receivables and the Credit and Collection Policy (including, in each case, the systems, procedures and records relating thereto) on a scope and in a form reasonably requested by the Operating Agent.

ARTICLE VI

ADMINISTRATION AND COLLECTION

OF POOL RECEIVABLES

SECTION 6.01. Designation of Servicers. The servicing, administration and collection of the Pool Receivables shall be conducted by the Servicers so designated hereunder from time to time. Until the Operating Agent gives notice to the Seller of the designation of a new Servicer in accordance with the provisions of the next sentence, (a) each Originator is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer in respect of Pool Receivables originated by it pursuant to the terms hereof provided that the Parent Servicer will act as Servicer with respect to all Deposit Accounts maintained for the Nordtrac Group and (b) the Parent is hereby designated as, and hereby agrees to perform the duties and obligations of, the Parent Servicer pursuant to the terms hereof. The Operating Agent may at any time after the occurrence and during the continuance of an Event of Termination or an Incipient Bankruptcy Event of Termination or a Servicer Bankruptcy Event designate, upon at least ten days prior written notice to the Servicers (unless such Servicer is in insolvency, bankruptcy or arrangement proceeding, in which case no such notice need be given), as Servicer any Person (including itself) to succeed all or any of the Servicers or any successor Servicer, if such Person shall consent and agree to the terms hereof. Any Servicer may, with the prior consent of the Operating Agent (except that no consent is required if the subcontract is to another Originator), subcontract with any other Person or Persons (including an Originator or Originators) for the servicing, administration or collection of the Pool Receivables. Any such subcontract shall not affect a Servicer’s liability for performance of its duties and obligations pursuant to the terms hereof, and any such subcontract shall automatically terminate upon designation of a successor Servicer.

SECTION 6.02. Duties of Servicers. (a) Each Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Pool Receivable originated by it from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy; provided, however, that the Servicers shall not be required (i) to perfect, render opposable, publish, make any filing or registration or take any other action for the purposes of perfecting or otherwise rendering opposable against any Person any reservation of ownership contained or provided for in any Contract or invoice relating to any Receivable originated by it or (ii) to perfect, render opposable, publish, make any filing or registration or take any other action under the laws of the domicile of any Obligor (other than the Quebec, Ontario, Delaware, Illinois and the District of Columbia laws) for the purposes of perfecting or otherwise rendering opposable as against the Parent, or any third parties in relation to the Parent, the interests of the Purchaser in the Receivables, Related Security and Collections under this Agreement provided further that no later than January 31, 2004, the Parent Servicer shall effect filings contemplated by this clause (ii) in all other jurisdictions in the United States and Canada. The Seller and the Operating Agent hereby appoint the Servicers, from time to time designated pursuant to Section 6.01, as

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agent for themselves and for the Investors to enforce their respective rights and interests in the Pool Receivables, the Related Security and. the Collections with respect thereto. In performing its duties as Servicer, each Servicer shall exercise the same care and apply the same policies as it would exercise and apply if it owned such Receivables, except as otherwise provided in the Transaction Documents.

(b) Each Servicer shall administer the Collections in accordance with the procedures described in Section 2.04.

(c) If no Event of Termination or Incipient Bankruptcy Event of Termination shall have occurred and be continuing, but subject to Section 6.02(j), any Originator, while it is a Servicer (or while it is a subcontractor to a Servicer under Section 6.01), may, in accordance with the Credit and Collection Policy, (i) extend the maturity of any Receivable one time for up to 30 days or (ii) adjust the Outstanding Balance of any Receivable, in each case as such Originator deems appropriate to maximize Collections thereof; provided that if the maturity of any Receivable is extended more than once or for more than 30 days or the Outstanding Balance of any Receivable is reduced, such Receivable shall be classified as a Diluted Receivable; provided further that the classification of any such Receivable as a Defaulted Receivable shall not be affected by any such extension.

(d) Each Servicer shall hold in trust for the Seller and each Investor, in accordance with their respective interests, all documents, instruments and records (including, without limitation, computer tapes or disks) which evidence or relate to Pool Receivables. The Parent Servicer shall mark the Seller’s master data processing records evidencing the Pool Receivables with a legend, acceptable to the Operating Agent, evidencing that Receivable Interests therein have been sold and, at the request of the Operating Agent, each Servicer shall after and during the continuance of an Event of Termination or an Incipient Bankruptcy Event of Termination mark conspicuously (if not already done) each invoice evidencing each Pool Receivable originated by it and the related Contract with such a legend.

(e) Each Servicer shall, as soon as practicable following receipt, turn over to the Person entitled thereto any cash collections or other cash proceeds received with respect to Receivables not constituting Pool Receivables.

(f) The Parent Servicer shall, from time to time at the request of the Operating Agent, furnish to the Operating Agent (promptly after any such request) a calculation of the amounts held in trust for the Investors pursuant to Section 2.04.

(g) On the sixth Business Day before the end of each Fiscal Month, the Parent Servicer shall prepare and forward to the Operating Agent a Monthly Seller Report relating to the Receivable Interests outstanding on a day that is not more than five calendar days prior to the delivery of such Monthly Seller Report provided that the first two Monthly Seller Reports required after the initial Monthly Seller Report may be prepared as of a day that is not more than six Business Days prior to the delivery of such Monthly Seller Report. On the first Business Day of each week, the Parent Servicer shall prepare and forward to the Operating Agent a Weekly Seller Report relating to the Receivable Interests outstanding on the last Business Day of the immediately preceding week.

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The Parent Servicer shall transmit Seller Reports to the Operating Agent concurrently by facsimile and by electronic mail (each an “E-Mail Seller Report”). Each E-Mail Seller Report shall be (A) formatted as the Operating Agent may reasonably designate from time to time and (B) sent to the Operating Agent at an electronic mail address designated by the Operating Agent.

(h) No later than January 15, 2004, each Servicer will instruct the Obligors of the Receivables for which it is responsible to pay all Collections of such Receivables directly to a Deposit Account. Each Servicer shall deposit all Collections of Receivables received by it in a Deposit Account within the time called for by Section 5.01 (h) and until it does so shall segregate and hold such Collections in trust for, and as agent on behalf of, the Operating Agent.

(i) No Servicer shall deposit or credit to any Deposit Account any cash or cash proceeds other than Collections of Receivables. Each Servicer shall file all tax returns required by law to be filed by it with respect to the Receivables and shall promptly pay, remit or account for, as applicable, all sales taxes (including, without limitation, VAT, PST, QST and GST) paid or owing by it in connection with any Receivables, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with applicable generally accepted accounting principles shall have been set aside on its books.

(j) Notwithstanding anything to the contrary contained herein, no Servicer (nor any Person to whom any Servicer delegates any of its responsibilities hereunder) shall (nor has authority to) enter into contracts or other agreements in the name of the Operating Agent or any Investor; and no Servicer (nor any such delegee) is permitted to (or has authority to) establish an office or other fixed place of business of the Operating Agent or any Investor in Canada, Finland, Norway or Sweden. To the extent any responsibilities of any Servicer hereunder involve or require such Person to enter into a contract or other agreement in the name of the Operating Agent or any Investor, such servicing responsibility shall be fulfilled solely by Bombardier Motor, and such Person is authorised to take such action, but only from a place of business outside Canada, Finland, Norway and Sweden and such Person may not delegate such responsibility except upon consent of the Operating Agent.

(k) Prior to January 15, 2004, each Servicer (other than Bombardier Motor and the Parent) will send notice of the sale under the Originator Purchase Agreement to each Obligor of a Receivable outstanding as of the date hereof originated by it, such notices to be in each case substantially in the form designated for such Servicer on Annex G hereto. From and after January 15, 2004, each Servicer (other than Bombardier Motor and the Parent) shall mark each invoice related to any Receivable originated by it in a prominent place with a legend substantially in the form designated for such Servicer on Annex G.

(1) The Parent Servicer shall within ten Business Days after the end of each of its fiscal quarters prepare and forward to the Operating Agent a listing of all Obligors whose Receivables are as of the end of such fiscal quarter in the Receivables Pool in such detail as shall be reasonably acceptable to the Operating Agent.

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(m) Bombardier Motor, in its role as Servicer hereunder, acting as agent for the Operating Agent for purposes of Section 2.11 hereof, shall take and maintain possession of all original chattel paper associated with any Receivable originated by it and for which it is responsible and shall appropriately mark the same to reflect the Operating Agent’s interest therein.

SECTION 6.03. Certain Rights of the Operating Agent. (a) The Seller hereby transfers exclusive ownership and control and hereby grants a security in the Deposit Accounts to the Operating Agent as collateral security for the Secured Obligations. The Operating Agent shall not take any action with respect to the Deposit Accounts (including under any Deposit Account Agreement) except under the circumstances described in the lead-in to Section 6.03(b).

(b) At any time following the designation of a Servicer other than an Originator pursuant to Section 6.01 or following and during the continuance of an Event of Termination or an Incipient Bankruptcy Event of Termination or a Servicer Bankruptcy Event:

(i) The Operating Agent is authorized to deliver instructions to the Deposit Account Banks regarding disposition of funds in the Deposit Accounts.

(ii) The Operating Agent may notify the Obligors of Pool Receivables, at the Seller’s expense, of the ownership of Receivable Interests under this Agreement.

(iii) The Operating Agent may direct the Obligors of Pool Receivables that all payments thereunder be made directly to the Operating Agent or its designee.

(iv) At the Operating Agent’s request and at the Seller’s expense, the Seller and each Servicer shall (A) assemble all of the documents, instruments and other records (including, without limitation, computer tapes and disks) that evidence or relate to the Pool Receivables and the related Contracts and Related Security, or that are otherwise necessary or desirable to collect the Pool Receivables which it services, and shall, subject to any confidentiality restrictions contained in such Contracts, make the same available to the Operating Agent at a place selected by the Operating Agent or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of Pool Receivables in a manner reasonably acceptable to the Operating Agent and, promptly upon receipt, remit all such cash, checks and instruments, duly indorsed or with duly executed instruments of transfer, to the Operating Agent or its designee.

(v) The Seller authorizes the Operating Agent to take any and all steps in the Seller’s name and on behalf of the Seller that are necessary or commercially reasonable, in the determination of the Operating Agent, to collect amounts due under the Pool Receivables, including, without limitation, endorsing the Seller’s

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name on checks and other instruments representing Collections of Pool Receivables and enforcing the Pool Receivables and the Related Security.

SECTION 6.04. Rights and Remedies. (a) If any Servicer fails to perform any of its obligations under this Agreement, the Operating Agent may (but shall not be required to), upon two Business Days’ prior notice to such Servicer if an Event of Termination or Incipient Bankruptcy Event of Termination shall then exist, and otherwise, upon 10 days’ prior notice to such Servicer, itself perform, or cause performance of, such obligation; and the Operating Agent’s reasonable costs and expenses incurred in connection therewith shall be payable by such Servicer.

(b) The Seller and the Originators shall perform their respective obligations under the Contracts related to the Pool Receivables (insofar as such obligations relate to the Pool Receivables) to the same extent as if Receivable Interests had not been sold and the exercise by the Operating Agent on behalf of the Investors of their rights under this Agreement shall not release the Servicers, the Originators or the Seller from any of their duties or obligations with respect to any Pool Receivables or related Contracts. Neither the Operating Agent nor the Investors shall have any obligation or liability with respect to any Pool Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of the Seller thereunder.

(c) In the event of any conflict between the provisions of Article VI of this Agreement and Article VI of the Originator Purchase Agreement, the provisions of Article VI of this Agreement shall control.

SECTION 6.05. Further Actions Evidencing Purchases. Each Originator agrees from time to time, at its expense, to promptly execute and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Operating Agent may reasonably request, to perfect, protect or more fully evidence the Receivable Interests purchased hereunder, or to enable the Investors or the Operating Agent to exercise and enforce their respective rights and remedies hereunder. Without limiting the foregoing, each Originator will (i) upon the request of the Operating Agent, execute and file such financing or continuation statements, or amendments thereto, and such other instruments and documents, that may be reasonably necessary or desirable, or that the Operating Agent may reasonably request, to perfect, protect or evidence such Receivable Interests; (ii) mark its master data processing records evidencing the Pool Receivables with a legend, reasonably acceptable to the Operating Agent, evidencing that Receivable Interests therein have been sold; and (iii) upon the request of the Operating Agent after the occurrence and during the continuance of an Event of Termination or an Incipient Bankruptcy Event of Termination, mark conspicuously each invoice evidencing each Pool Receivable with such a legend. Each Originator authorizes the Seller or the Operating Agent to file financing statements or other applicable registrations under the PPSA and the Civil Code of Quebec with respect to the Originator Purchase Agreement as permitted by the UCC, the PPSA and the Civil Code of Quebec. The Seller authorizes the Operating Agent to file financing statements or other applicable registrations under the PPSA and the Civil Code of Quebec with respect to the Originator Purchase Agreement as permitted by the UCC, the PPSA and the Civil Code of Quebec, including financing statements under the UCC in respect of all the assets of the Seller.

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SECTION 6.06. Covenants of the Servicers and the Originators. (a) Audits. Each Servicer will, from time to time during regular business hours as reasonably requested by the Operating Agent, at such Servicer’s expense, permit the Operating Agent, or, as designated to such Servicer in writing, its agents or representatives (including independent public accountants, which may be the Servicer’s independent public accountants), (i) no later than 60 days after the date of this Agreement, to conduct a post-closing audit of the Receivables Pool to determine compliance with this Agreement, (ii) in addition to the audit referred to in clause (i) above, no more than once in each year commencing January 1, 2004 (unless an Event of Termination has occurred and is continuing or a deficiency was discovered during the previous audit, in which case such limitation shall not apply), to conduct periodic audits of the Receivables, the Related Security and the related books and records and collections systems of such Servicer, (iii) no more than once each year commencing January 1, 2004 (unless an Event of Termination shall have occurred and is continuing or a deficiency was discovered during the previous audit referred to in clause (ii) above, in which case such limitation shall not apply) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of such Servicer relating to Pool Receivables and the Related Security, including, without limitation, the Contracts relating to Pool Receivables, subject however to any confidentiality restrictions, and (iv) to visit the offices and properties of such Servicer for the purpose of examining such materials described in clause (ii) above, and to discuss matters relating to Pool Receivables and the Related Security or such Servicer’s performance hereunder with any of the officers or employees of such Servicer having knowledge of such matters. The foregoing rights shall be exercised at such reasonable time or times as will not interfere with the normal operations of the Servicers. The rights of the Operating Agent under this Section 6.06(a) will be exercised in conjunction with the audit rights granted under Section 5.02, but only at the times the audit rights under Section 5.02 are exercised.

(b) Change in Credit and Collection Policy. Each Originator will not make any change in the Credit and Collection Policy that would impair the collectibility of any Pool Receivable or the ability of such Originator or the Parent (if it is acting as a Servicer) to perform its obligations under this Agreement.

SECTION 6.07. Indemnities by the Servicers. Without limiting any other rights that the Operating Agent, any Investor, any of their respective Affiliates or any of their respective officers, directors, employees or advisors (each, a “Special Indemnified Party”) may have hereunder or under applicable law, and in consideration of its appointment as Servicer, each Servicer hereby agrees to indemnify each Special Indemnified Party from and against any and all claims, losses and liabilities (including reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Special Indemnified Amounts”) arising out of or resulting from any of the following (excluding, however, (a) Special Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Special Indemnified Party, (b) recourse for Receivables which are not collected, not paid or uncollectible solely on account of the insolvency, bankruptcy or financial inability to pay of the applicable Obligor or (c) any income taxes or any other tax or fee measured by net income incurred by such Special Indemnified Party arising out of or as a result of this Agreement or the ownership of Receivable

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Interests or in respect of any Receivable or any related Contract unless it arises as a result of a breach by such Servicer of this Agreement, including Section 6.02(j)):

(i) any representation made or deemed made by such Servicer pursuant to Section 4.02(g) hereof which shall have been incorrect in any respect when made or any other representation or warranty or statement made or deemed made by such Servicer under or in connection with this Agreement which shall have been incorrect in any material respect when made;

(ii) the failure by such Servicer to comply with any applicable law, rule or regulation with respect to any Pool Receivable or related Contract;

(iii) any failure of such Servicer to perform its duties or obligations in accordance with the provisions of this Agreement;

(iv) the commingling of Collections of Pool Receivables at any time by such Servicer with other funds;

(v) any action or omission by such Servicer reducing or impairing the rights of the Investors with respect to any Pool Receivable or the value of any Pool Receivable;

(vi) any determination after the date hereof, that any Investor or the Operating Agent has or is deemed to have a permanent establishment within Finland, Norway or Sweden solely or primarily as a result of the transactions contemplated hereby or any act or failure to act of the Seller or such Servicer;

(vii) any claim brought by any Person other than a Special Indemnified Party arising from any activity by such Servicer or its Affiliates in servicing, administering or collecting any Receivable; or

(viii) any claim brought by any Person (other than BCI or its Affiliates) arising out of the performance of subservicing activities by BCI.

ARTICLE VII

EVENTS OF TERMINATION

SECTION 7.01. Events of Termination. If any of the following events (“Events of Termination”) shall occur and be continuing:

(a) Any Servicer (i) shall fail to perform or observe any term, covenant or agreement under this Agreement (other than as referred to in clause (ii) or (iii) of this subsection (a)) and such failure shall remain unremedied for five Business Days or (ii) shall fail to make when due any payment or deposit to be made by it under this Agreement which is to be applied to Capital or Yield (and if such failure is with respect to Yield, such failure shall remain unremedied for one Business Day after the date such payment is due); or (iii) shall fail to deliver

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any Seller Report when required and such failure shall remain unremedied for one Business Day; or

(b) The Seller shall fail to make any payment required under Section 2.04(e) and such failure remains unremedied for one Business Day after the Seller obtains actual knowledge or written notice from the Operating Agent thereof; or

(c) Any representation or warranty made or deemed made by the Seller, any Originator or any Servicer (or any of their respective officers) under or in connection with this Agreement or any other Transaction Document or any information or report delivered by the Seller, any Originator or any Servicer pursuant to this Agreement or any other Transaction Document shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered (unless either (i) such representation or warranty relates solely to one or more specific Pool Receivables and as of the second Business Day following the removal of such Pool Receivables from the Net Receivables Pool Balance no Event of Termination under Section 7.01(h) shall exist or (ii) the breach of such representation or warranty is capable of being cured and is in fact cured (without any adverse impact on the Operating Agent or the Investors or the collectibility of the Pool Receivables) within five Business Days after the first date on which the Seller obtains actual knowledge or receives written notice of such breach from the Operating Agent); or

(d) The Seller or any Originator shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed and any such failure shall remain unremedied for 10 Business Days after written notice thereof shall have been given to the Seller and (in the case of a failure by any Originator) such Originator by the Operating Agent; or

(e) The Seller, the Parent or any Originator (i) fails to pay at maturity or, in the event a period of grace is provided, within any such applicable period of grace, any payment with respect to Indebtedness for Borrowed Money or (ii) is in default under or fails to observe or perform any term, covenant or agreement contained in any agreement by which it is bound evidencing or securing Indebtedness for Borrowed Money and any grace period provided in such agreement to remedy such default or failure has expired if the effect of such default or failure is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness for Borrowed Money; provided, that there shall only be an Event of Termination under this Section 7.01(e) if the aggregate amount of Indebtedness for Borrowed Money which is not so paid and/or with respect to which such default or failure to observe or perform has occurred, exceeds U.S.$5,000,000 (or the Dollar Equivalent amount in other currencies) and provided further that no Event of Termination shall be deemed to have occurred under this Section 7.01 (e) if the failure to pay or perform under the relevant agreement is waived, rescinded or annulled in writing by the relevant creditor(s); or

(f) Any purchase or any reinvestment pursuant to this Agreement shall for any reason (other than pursuant to the terms hereof) cease to create, or any Receivable Interest shall for any reason cease to be, a valid and perfected first priority undivided percentage ownership or security interest in each Pool Receivable, or the security interest created pursuant to Section 2.11 shall for any reason cease to be a valid and perfected first priority security

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interest in the Pool Receivables (unless such defect in creation, perfection or priority relates solely to one or more specific Pool Receivables and the Seller either (i) cures such defect or (ii) pays a deemed Collection on account of such Pool Receivables pursuant to Section 2.04(e)(ii), in each case within two Business Days after the first date on which the Seller obtains actual knowledge of such defect); or

(g) The Seller, the Parent, any Servicer (if it is the Parent or an Affiliate of the Parent) or any Originator shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Seller, the Parent, any Servicer (if it is the Parent or an Affiliate of the Parent) or any Originator seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or arrangement of debts, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or any receiver, trustee, custodian or other similar official for the Seller, the Parent, any Servicer (if it is the Parent or an Affiliate of the Parent) or any Originator or for any substantial part of its property shall be appointed, whether under private right or pursuant to any such proceeding; or the Seller, the Parent, any Servicer (if it is the Parent or an Affiliate of the Parent) or any Originator shall take any corporate action to authorize any of the actions set forth above in this subsection (g); or

(h) The sum of the Receivable Interests, each expressed as a percentage, shall be greater than the Maximum Purchaser Interest as of the last Business Day of any week and shall continue to be greater than the Maximum Purchaser Interest for two Business Days immediately following such day; or

(i) There shall have occurred any event which is reasonably expected to materially adversely affect the collectibility of the Receivables Pool generally or the ability of the Seller, the Parent, any Originator or any Servicer to collect Pool Receivables or otherwise perform its obligations under the Transaction Documents (it being understood and agreed that (i) a downgrade in the Debt Rating of the Parent, alone and in and of itself, shall not constitute a material adverse effect on the ability of the Parent to perform its obligations under the Transaction Documents and (ii) any deterioration in the credit quality of the Obligors is not an event which may form the basis of an Event of Termination under this subsection (i)); or

(j) An “Event of Termination” or “Facility Termination Date” shall occur under the Originator Purchase Agreement, or the Originator Purchase Agreement shall cease to be in full force and effect; or

(k) All of the outstanding limited liability company interests of the Seller shall cease to be owned, directly or indirectly, by the Parent or the Originators; or at least 51% of the

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outstanding capital stock of the Originators (other than the Parent) shall cease to be owned, directly or indirectly, by the Parent; or

(1) Pursuant to a final judgment for an amount in excess of U.S.$5,000,000 (or the Dollar Equivalent amount in other currencies), a seizure, attachment, execution or any similar process is levied or enforced against the whole or a material portion of the assets of the Parent or any Originator and remains unsatisfied or is not stayed or lifted within 45 days, unless such process is in good faith disputed by the Parent or such Originator and, if it be so disputed, non-payment shall not, in the reasonable opinion of the Operating Agent, have a material adverse effect on the ability of the Parent or such Originator to perform its obligations under any Transaction Document or the interest of the Operating Agent or any Investor in any significant portion of the Pool Receivables; or

(m) (i) the Parent or Bombardier Motor shall fail to make any payment required by its Undertaking, or (ii) the Parent or Bombardier Motor shall fail to perform or observe any other term, covenant or agreement contained in its Undertaking and any such failure shall remain unremedied for 10 Business Days after written notice thereof shall have been given to the Seller by the Operating Agent, or (iii) either Undertaking shall cease to be in full force and effect; or

(n) After the date hereof, any Investor or the Operating Agent shall determine, acting reasonably, that it has or is deemed to have a permanent establishment within Canada, Finland, Norway or Sweden solely or primarily as a result of the transactions contemplated hereby or any act or failure to act of the Seller or any Servicer; or

(o) A Default by Parent or Bombardier Motor shall occur under and as defined in the Strategic Alliance Exclusivity Agreement dated as of December 18, 2003 among the Parent, Bombardier Motor, BCL and BCI.

then, and in any such event, any or all of the following actions may be taken by notice to the Seller: the Investors or the Operating Agent may declare the Facility Termination Date to have occurred (in which case the Facility Termination Date shall be deemed to have occurred), and the Operating Agent may designate another Person or Persons to succeed any or all Originators as Servicer and Parent Servicer; provided, that, automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice) described in paragraph (g) of this Section 7.01, the Facility Termination Date shall occur, each Originator (if it is then serving as a Servicer) shall cease to be a Servicer, and the Operating Agent or its designee shall replace each Servicer and become each Servicer and the Parent Servicer. Upon any such declaration or designation or upon such automatic termination, the Investors and the Operating Agent shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided after default under the UCC, the PPSA and under other applicable law, which rights and remedies shall be cumulative.

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ARTICLE VIII

THE OPERATING AGENT

SECTION 8.01. Authorization and Action. Each Investor hereby appoints and authorizes the Operating Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Operating Agent by the terms hereof, together with such powers as are reasonably incidental thereto.

SECTION 8.02. Operating Agent’s Reliance. Etc. Neither the Operating Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Operating Agent under or in connection with this Agreement (including, without limitation, the Operating Agent’s servicing, administering or collecting Pool Receivables as Servicer) or any other Transaction Document, except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Operating Agent: (a) may consult with legal counsel (including counsel for the Seller, the Originators, the Parent and the Servicers), independent certified public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Investor (whether written or oral) and shall not be responsible to any Investor for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or any other Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of the Seller, the Parent, an Originator or a Servicer or to inspect the property (including the books and records) of the Seller, an Originator or a Servicer; (d) shall not be responsible to any Investor for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (e) shall incur no liability under or in respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telecopier or telex) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 8.03. Business with Seller, any Servicer or any Obligor. The Operating Agent and any of its Affiliates may generally engage in any kind of business with the Seller, a Servicer or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of the Seller, a Servicer, the Parent, any Originator or any Obligor or any of their respective Affiliates, all as if the Operating Agent were not the Operating Agent and without any duty to account therefor to the Investors.

SECTION 8.04. Investor’s Purchase Decision. Each Investor acknowledges that it has, independently and without reliance upon the Operating Agent, any of its Affiliates or any other Investor and based on such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement. Each Investor also acknowledges that it will, independently and without reliance upon the Operating Agent, any of its Affiliates or any other Investor and based on such documents and information as it shall deem

52

appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement.

ARTICLE IX

INDEMNIFICATION

SECTION 9.01. Indemnities by the Seller. Without limiting any other rights that the Operating Agent, the Investors, any of their respective Affiliates or any of their respective officers, directors, employees or advisors (each, an “Indemnified Party”) may have hereunder or under applicable law, the Seller hereby agrees to indemnify each Indemnified Party from and against any and all claims, losses and liabilities (including reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Indemnified Amounts”) arising out of or resulting from this Agreement or the other Transaction Documents or the use of proceeds of purchases or reinvestments or the ownership of Receivable Interests or in respect of any Receivable or any related Contract, excluding, however, (a) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Indemnified Party, (b) recourse (except as otherwise specifically provided in this Agreement) for Receivables which are not collected, not paid or uncollectible solely on account of the insolvency, bankruptcy or financial inability to pay of the applicable Obligor, (c) any income taxes or any other tax or fee measured by net income incurred by such Indemnified Party arising out of or as a result of this Agreement or the ownership of Receivable Interests or in respect of any Receivable or any related Contract, unless it arises as a result of a breach by the Seller of this Agreement, including Section 6.02(j), or (d) Indemnified Amounts arising out of disputes solely among the Indemnified Parties, including a dispute between an Indemnified Party and any Person to which such Indemnified Party assigns rights and obligations under this Agreement. Without limiting or being limited by the foregoing, but subject to the exclusions set forth in clauses (a), (c) and (d) above, the Seller shall pay on demand to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts relating to or resulting from any of the following:

(i) the characterization in any Seller Report or other written statement made by or on behalf of the Seller of any Receivable as an Eligible Receivable or as included in the Net Receivables Pool Balance which, as of the date of such Seller Report or other statement, is not an Eligible Receivable or should not be included in the Net Receivables Pool Balance;

(ii) any representation or warranty or statement made or deemed made by the Seller (or any of its officers) under or in connection with this Agreement or any of the other Transaction Documents which shall have been incorrect in any material respect when made;

(iii) the failure by the Seller or the relevant Originator to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract; or the failure of any Pool Receivable or the related Contract to conform to any such applicable law, rule or regulation; or the failure by the Seller

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or the relevant Originator to pay, remit or account for any taxes related to or included in a Receivable, when due;

(iv) the failure to vest in the Investors (a) a perfected undivided percentage ownership or security interest, to the extent of each Receivable Interest, in the Receivables in, or purporting to be in, the Receivables Pool and the Collections in respect thereof, or (b) a perfected security interest as provided in Section 2.11, in each case free and clear of any Adverse Claim;

(v) the failure to have filed or sent, or any delay in filing or sending, financing statements, notices or other similar instruments or documents under the UCC, Quebec law, or the PPSA of any applicable jurisdiction or other applicable laws with respect to any Receivables in, or purporting to be in, the Receivables Pool and Collections in respect thereof, whether at the time of any purchase or reinvestment or at any subsequent time; or the failure to have properly notified any Obligor of the transfer, sale or assignment of any Receivable pursuant to the Transaction Documents, to the extent such notice is required to perfect the same under Finnish law, Norwegian law or Swedish law; for purposes of this clause (v), “perfect” under Finnish law, Norwegian law and Swedish law means to render opposable, publish and allow the setting up of the purchaser’s interest in, and right to collect payment under, the assets which are the subject of such transfer, sale and assignment, and to make opposable, publish and allow the setting up of such transfer, sale and assignment as against Obligors and other third parties, including any trustee in bankruptcy; provided, however, that, for the purposes of this clause (v), “perfect” shall not include the actions referred to in clause (i) to the first proviso to the first sentence of Section 6.02;

(vi) any dispute, claim, offset or defense (other, than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable in, or purporting to be in, the Receivables Pool (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), but only to the extent the Seller has not paid a deemed Collection on account of such Receivable pursuant to Section 2.04(e);

(vii) the inclusion as a Pool Receivable in any Seller Report or other written statement made by or on behalf of the Seller of any receivable which is an Excluded Receivable as of the date of such Seller Report or other statement;

(viii) any products liability or other claim arising out of or in connection with merchandise or services which are the subject of any Contract relating to a Pool Receivable;

(ix) the commingling of Collections of Pool Receivables at any time with other funds;

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(x) any investigation, litigation or proceeding (brought by a Person other than an Indemnified Party) related to this Agreement or the use of proceeds of purchases or reinvestments or the ownership of Receivable Interests or in respect of any Receivable or Related Security or related Contract;

(xi) any failure of the Seller to perform and comply with its covenants and obligations contained in this Agreement or any other Transaction Document;

(xii) any claim brought by any Person other than an Indemnified Party arising from any activity by the Seller or any Affiliate of the Seller in servicing, administering or collecting any Receivable;

(xiii) any claim arising out of any failure by the Seller or the relevant Originator to obtain a consent from the relevant Obligor to the transfer, sale or assignment of any Receivable pursuant to the Transaction Documents;

(xiv) any claim for GST, PST, VAT or United States sales tax.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or consent to any departure by the Seller, any Originator or any Servicer therefrom shall be effective unless in a writing signed by the Operating Agent, as agent for the Investors (and, in the case of any amendment, also signed by the Seller and the Originators; provided, however, that the signatures of the Seller and the Originators shall not be required for the effectiveness of any amendment which modifies the representations, warranties, covenants or responsibilities of the Servicers at any time when no Servicer is the Parent or an Affiliate of an Originator or a successor Servicer is, or successor Servicers are, designated by the Operating Agent pursuant to Section 6.01; provided that any such amendment shall not affect the rights or obligations of the Parent or any other Originator in its prior capacity as a Servicer), and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by the Servicers in addition to the Operating Agent, affect the rights or duties of the Servicers under this Agreement. No failure on the part of the Investors or the Operating Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

SECTION 10.02. Notices, Etc. All notices and other communications hereunder shall, unless otherwise expressly stated herein, be in writing (which shall include facsimile communication) and faxed or delivered, to each party hereto, at its address set forth under its name on Schedule II hereto or at such other address as shall be designated by such party in a written notice to the other parties hereto. Notices and communications by facsimile shall be effective when sent (and shall be followed by hard copy sent by regular mail), and notices and communications sent by other means shall be effective when received.

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SECTION 10.03. Assignability. (a) Each Investor may assign to any Eligible Assignee or to any other Investor all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Investor Commitment and any Receivable Interests or interests therein owned by it). The parties to each such assignment shall execute and deliver to the Operating Agent an Assignment and Acceptance, and the assignor shall notify the Seller of such assignment. In addition, any Investor may assign any of its rights (including, without limitation, rights to payment of Capital and Yield) under this Agreement to any Federal Reserve Bank without notice to or consent of the Seller or the Operating Agent.

(b) This Agreement and the rights and obligations of the Operating Agent herein shall be assignable by the Operating Agent and its successors and assigns; provided, however, that the Operating Agent agrees that it will not assign of its own volition such rights and obligations to any Person other than an Affiliate unless:

(i) in the reasonable judgment of the Operating Agent, the Operating Agent determines that continued service by it (or its Affiliate) as Operating Agent hereunder would be inconsistent with, or otherwise materially disadvantageous under, applicable legal, tax or regulatory restrictions, or

(ii) an Event of Termination or Incipient Event of Termination shall have occurred and be continuing, or

(iii) the Seller shall have consented to such assignment (such consent not to be unreasonably withheld or delayed).

(c) The Seller may not assign its rights or obligations hereunder or any interest herein without the prior written consent of the Operating Agent.

(d) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

SECTION 10.04. Costs and Expenses. In addition to the rights of indemnification granted under Section 9.01 hereof, the Seller agrees to pay on demand (i) all reasonable costs and expenses of the Operating Agent in connection with the preparation, execution and delivery of this Agreement and the other documents and agreements to be delivered hereunder, and any amendments or waivers of such agreements, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Operating Agent, BCI and their respective Affiliates with respect thereto and with respect to advising the Operating Agent, BCI and their respective Affiliates as to their rights and remedies under this Agreement following the occurrence of an Event of Termination or an Incipient Event of Termination, and (ii) all costs and expenses, if any (including reasonable counsel fees and expenses), of the Operating Agent, the Investors and their respective Affiliates, in connection with the enforcement of this Agreement and the other documents and agreements to be delivered hereunder.

SECTION 10.05. Waiver of Consequential Damages. Each of the Originators, the Servicers and the Seller agree that no Indemnified Party shall have any liability

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to them or any of their securityholders or creditors in connection with this Agreement, the other Transaction Documents or the transactions contemplated thereby on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).

SECTION 10.06. Confidentiality. (a) Subject to Section 10.06(c), the Seller, each Originator and each Servicer each agrees to maintain the confidentiality of the terms of this Agreement in communications with third parties; provided that this Agreement and its terms may be disclosed (i) to third parties to the extent such disclosure is made pursuant to a written agreement of confidentiality in form and substance reasonably satisfactory to the Operating Agent, (ii) to the legal counsel of the Seller, the Originators, the Parent and the Servicers if they are advised by the Seller of the confidential nature of such information, (iii) to the extent required by applicable law or regulation or legal process or by any court, securities exchange, regulatory body or agency having jurisdiction over such party, (iv) to the auditors of Seller, the Parent or the Originators if they are advised of the confidential nature of such information, (v) as may be required by applicable accounting and auditing requirements, (vi) as may be necessary to obtain consents from any Obligor or other Person, or to perfect any ownership or security interest under the Transaction Documents or (vii) as may be necessary to perform any of their obligations or enforce any of their rights under any Transaction Document; and provided, further, that such party shall have no obligation of confidentiality in respect of any information which may be generally available to the public or becomes available to the public through no fault of such party or which is provided to such party by a third party not known to be under any duty of confidentiality. The Seller, each Originator and each Servicer shall be permitted to disclose the fact of the existence of this Agreement, and that they are parties to the transactions contemplated hereby.

(b) Subject to Section 10.06(c), each Investor and the Operating Agent agrees to maintain the confidentiality of, and not to disclose to other Persons, all information with respect to the Seller, the Originators, the Parent or the Receivables Pool and the related Contracts (including the Seller Reports and other information) furnished or delivered to it pursuant to this Agreement until such information shall have become public or is furnished by a person not known to be under an obligation of confidentiality; provided, however, that each Investor and the Operating Agent may disclose such information (i) to each other, (ii) to the extent required by law or pursuant to subpoenas or other court order or legal process (provided that, to the extent reasonably practicable (and to the extent such disclosure is not as a result of an examination by any bank examiner or regulatory body having jurisdiction over the disclosing party), the disclosing party shall give the Parent advance notice of such disclosure and the Parent shall be permitted, at the Parent’s sole cost and expense, to resist such disclosure by appropriate legal proceedings), (iii) to governmental agencies, bank examiners and regulatory bodies having jurisdiction over it, to the extent such disclosure is required or requested, (iv) to its auditors, accountants or attorneys (provided that the Investor or Operating Agent, as the case may be, shall advise such persons of the confidential nature of such information), (v) subject to compliance with Section 10.03, to any potential assignee of its rights or obligations hereunder which has agreed to be bound by the provisions of this Section 10.06(b) (provided that no such disclosure shall be made pursuant to this clause (v) to any potential participant or assignee which is a Competitor), (vi) to the rating agencies and the providers of credit enhancement or liquidity for

57

each Investor, (vii) as may be necessary to enforce this Agreement or any other Transaction Document and (viii) to the extent such information was known to BCI prior to December 2003 and may be disclosed in accordance with Section 6.11 of the Bombardier Inc. Purchase Agreement. The furnishing of information to any third party pursuant to any of the foregoing exceptions shall not relieve the Investors or Operating Agent from their confidentiality obligations with respect to their subsequent use of that or any other information.

(c) The Parent, the Seller and each Originator (collectively, the “Seller Entities”) and the Operating Agent and each Investor (collectively, the “Purchaser Entities”) hereby agree that, from the commencement of discussions with respect to the transaction contemplated by this Agreement and the other Transaction Documents (the “Transaction”), each Seller Entity and each Purchaser Entity (and each of their respective, and their respective affiliates’, employees, officers, directors, advisors, representatives and agents) are permitted to disclose to any and all persons, without limitation of any kind, the structure and tax aspects (as such terms are used in Internal Revenue Code Sections 6011, 6111 and 6112 and the regulations promulgated thereunder) of the Transaction, and all materials of any kind (including opinions or other tax analyses) that are provided to any Seller Entity or Purchaser Entity related to such structure and tax aspects. In this regard, each Seller Entity and Purchaser Entity acknowledges and agrees that the disclosure of the structure or tax aspects of the Transaction is not limited in any way by an express or implied understanding or agreement, oral or written (whether or not such understanding or agreement is legally binding). Furthermore, each Seller Entity and Purchaser Entity acknowledges and agrees that it does not know or have reason to know that its use or disclosure of information relating to the structure or tax aspects of the Transaction is limited in any other manner (such as where the Transaction is claimed to be proprietary or exclusive) for the benefit of any other person. To the extent that disclosure of the structure or tax aspects of the Transaction by any Seller Entity or Purchaser Entity is limited by any existing agreement between any Seller Entity and any Purchaser Entity, such limitation is agreed to be void ab initio and such agreement is hereby amended to permit disclosure of the structure and tax aspects of the Transaction.

SECTION 10.07. GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE INTERESTS OF THE INVESTORS IN THE RECEIVABLES AND THE ORIGINATOR PURCHASE AGREEMENT ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

SECTION 10.08. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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SECTION 10.09. Survival of Termination. The provisions of Sections 2.08, 2.09, 2.10, 6.07, 9.01, 10.04, 10.05 and 10.06 shall survive any termination of this Agreement.

SECTION 10.10. Consent to Jurisdiction. (a) Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in New York City in any action or proceeding arising out of or relating to this Agreement, and each party hereto hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. The parties hereto hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The parties hereto agree that a final judgment in any such action or proceeding with respect to which there is no further right of appeal shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Each of the Seller and Bombardier Motor (as an Originator and as a Servicer) consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to it at its address specified in Section 10.02. Each of Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy, the Parent and each Servicer (other than Bombardier Motor) consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to CT Corporation System, 111 Eighth Avenue, New York, NY 10001, USA, or in any other manner permitted by applicable law. Nothing in this Section 10.10 shall affect (i) the right of the Investors or the Operating Agent to serve legal process in any other manner permitted by law or affect the right of the Investors or the Operating Agent to bring any action or proceeding against the Seller, any Servicer or any Originator or any of their property in the courts of any other jurisdictions or (ii) the right of the Seller, any Servicer or any Originator to serve legal process in any manner permitted by law or affect the right of the Seller, any Servicer or any Originator to bring any action or proceeding against the Investors or the Operating Agent or any of their property in the courts of any jurisdiction.

(c) To the extent that Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy, the Parent or any Servicer has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each of Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy, the Parent and each Servicer hereby irrevocably waives such immunity in respect of its obligations under this Agreement.

SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED PURSUANT HERETO.

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SECTION 10.12. Judgment. (a) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Operating Agent or its assigns could purchase Dollars with such other currency at New York, New York on the Business Day preceding that on which final judgment is given.

(b) The obligations of the Seller, each Servicer and each Originator (each, a “Payor”) in respect of any sum due from such Payor to the Investors or the Operating Agent (each, a “Recipient”) hereunder shall, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day following such Recipient’s receipt of any sum adjudged to be so due in such other currency, such Recipient may, in accordance with normal banking procedures purchase (and remit in New York) Dollars with such other currency; if the Dollars so purchased and remitted are less than the sum originally due to such Recipient in Dollars, the relevant Payor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the relevant Recipient against such loss, and if the Dollars so purchased exceed the sum originally due to the relevant Recipient in Dollars, the relevant Recipient agrees to remit to the relevant Payor such excess.

SECTION 10.13. Entire Agreement. This Agreement (including the Schedules and Annexes relating hereto) and the other Transaction Documents constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

SECTION 10.14. Language. This Agreement and all related documents have been written in the English language at the express request of the parties. Le présent contrat ainsi que tous les documents s’y rattachant ont été rédigés en anglais á la demande expresse des parties.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

SELLER:	BRP RECEIVABLES FUNDING, LLC
	By:
		Name:
		Title:
INVESTOR: Percentage: 100%	BOMBARDIER CAPITAL INC.
	By:
		Name:
		Title:
	By:
		Name:
		Title:
OPERATING AGENT:	BOMBARDIER CAPITAL INC., as Operating Agent
	By:
		Name:
		Title:
	By:
		Name:
		Title:

PARENT SERVICER AND ORIGINATOR:	BOMBARDIER RECREATIONAL PRODUCTS INC.
	By:
		Name:
		Title:
	By:
		Name:
		Title:
SERVICER AND ORIGINATOR:	BOMBARDIER MOTOR CORPORATION OF AMERICA
	By:
		Name:
		Title:
	By:
		Name:
		Title:
SERVICER AND ORIGINATOR:	BOMBARDIER NORDTRAC AB
	By:
		Name:
		Title:
	By:
		Name:
		Title:
SERVICER AND ORIGINATOR:	BOMBARDIER NORDTRAC AS
	By:
		Name:
		Title:
	By:
		Name:
		Title:

SERVICER AND ORIGINATOR:	BOMBARDIER-NORDTRAC OY
	By:
		Name:
		Title:
	By:
		Name:
		Title:

SCHEDULE I

DEPOSIT ACCOUNTS

Name and Address of Deposit Account Bank Account Holders Account Number

SCH I-1

SCHEDULE III

APPROVED OBLIGORS

[ATTACHED]

SCH III-1

ANNEX E

[Form of Funds Transfer Letter]

[Letterhead of the Seller]

[·], 2003

Bombardier Capital Inc.,

  as Operating Agent

[ADDRESS]

[ADDRESS]

Re: Funds Transfers

Gentlemen:

This letter is the Funds Transfer Letter referred to in Section 2.02(b) of the Receivables Purchase Agreement, dated as of December 18, 2003, as modified, amended or restated from time to time (the “RPA”; terms used in the RPA, unless otherwise defined herein, having the meaning set forth therein) among the undersigned, Bombardier Capital Inc., you, as Operating Agent for the Investors, and Bombardier Motor Corporation of America, Bombardier Nordtrac AB, Bombardier Nordtrac AS, Bombardier-Nordtrac Oy and Bombardier Recreational Products Inc., as Originators and Servicers.

You are hereby directed to deposit all funds representing amounts paid for Receivable Interests to [Account Number], at [Name, Address and ABA Number of Bank].

The provisions of this Letter may not be changed or amended orally, but only by a writing in substantially the form of this letter signed by the undersigned and acknowledged by you.

Very truly yours,
BRP RECEIVABLES FUNDING, LLC
By:
	Title:
By:
	Title:

E- 1

Receipt acknowledged: BOMBARDIER CAPITAL INC., as Operating Agent
By:
	[TITLE]

E-2

ANNEX G

Form of Notices to Obligors and Invoice Legends

With Respect to Bombardier-Nordtrac Oy:

Legend for Receivables (Finnish):

Bombardier-Nordtrac Oy on siirtänyt kaikki Teiltä olevat saatavansa, kaikkine niihin liittyvine oikeuksineen sekä siihen liittyvät vakuudet ja niiden tuotto, BRP Receivables Funding, LLC:lle (“Siirronsaaja”). Kaikkiin näihin saataviin liittyvät maksusuoritukset tulee suorittaa Siirronsaajalle, ellette myöhemmin saa Siirronsaajalta muuta kirjallista ohjetta. Maksu tulee suorittaa tilille numero [BANK AND ACCOUNT NUMBER].

English translation:

Bombardier-Nordtrac Ltd. has transferred all of its claims towards you, including all rights related thereto and all related security and guaranties and all proceeds thereof, to BRP Receivables Funding, LLC (the “Purchaser”). All payments pursuant to these receivable shall be made to the P urchaser u nless you receive written notice to the contrary from the Purchaser. Payment shall be made to [BANK AND ACCOUNT NUMBER],

Notice for Receivables (Finnish):

Ilmoitamme täten, että tämän laskun mukainen saatava, sekä kaikki siihen liittyvät oikeudet sekä niihin liittyvät vakuudet ja niiden tuoton, on siirretty BRP Receivables Funding, LLC:lle (“Siirronsaaja”). Saatavaan liittyvät maksusuoritukset tulee suorittaa Siirronsaajalle, ellette myöhemmin saa Siirronsaajalta muuta kirjallista ohjetta. Maksu tulee suorittaa tilille numero [BANK AND ACCOUNT NUMBER].

English translation:

We hereby notify you that the receivable evidenced by the above-mentioned invoice, including all rights related thereto and all related security and guaranties and all proceeds thereof, have been transferred to BRP Receivables Funding, LLC (the “Purchaser”). Payment pursuant to this receivable shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser. Payment shall be made to [BANK AND ACCOUNT NUMBER].

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With Respect to Bombardier Nordtrac AB:

Legend for Receivables (Swedish):

Vi får härmed informera er om att denna faktura samt samtliga säkerheter och garantier knutna till denna faktura, har överlåtits till BRP Receivables Funding, LLC (“Förvärvaren”). Betalning enligt denna faktura kan med befriande verkan enbart ske till Förvärvaren. Betalning kan inte med befriande verkan ske till annan förutsatt att ni inte skriftligen informerats om annat av Förvärvaren, eller annan som företräder denne. Betalning skall erläggas till bankkonto nummer [l].

English translation:

We hereby notify you that the receivable evidenced by the above-mentioned invoice, all related security and guarantees and all proceeds thereof have been sold, assigned and transferred to BRP Receivables Funding, LLC (the “Purchaser”). Payment pursuant to this receivable shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser or on its behalf. Payment shall be made to bank account no. [l].

Notice for Receivables (Swedish):

Bombardier Nordtrac AB har överlåtit alla sina fordringar mot er, samt alla säkerheter och garantier knutna till dessa fordringar, till BRP Rececivables Funding, LLC (“Förvärvaren”). Betalning för dessa fordringar kan därför med befriande verkan enbart erläggas till Förvärvarens bankkonto nummer [l].

English translation:

Bombardier Nordtrac AB has transferred all its claims towards you to BRP Receivables Funding, LLC (the “Purchaser”) together with all related securities and guarantees. Payment of these claims can therefore not be made to any other party than to the Purchaser’s bank account no. [l].

With Respect to Bombardier Nordtrac AS:

Legend for Receivables (Norwegian):

Vi informerer Dem hermed om at denne faktura og samtlige sikkerheter vi har i forhold t il D em e r o verført t il B RP R eceivables Funding, LLC (“Erververen”). Frigjørende betaling av denne faktura kan kun skje til Erververen med mindre De skriftlig informert om annet av Erververen eller av noen som representerer Erververen. Betaling skal skje til bankkontonummer [l]

English translation:

We hereby notify you that the receivable e videnced by t his invoice, all related security and guarantees and all proceeds thereof have been sold, assigned and

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transferred to BRP Receivables Funding, LLC (the “Purchaser”). Payment shall be made to bank account no. [l]. Payment of this invoice shall be made to the Purchaser unless you receive written notice to the contrary from the Purchaser or on its behalf.

Notice for Receivables (Norwegian):

Bombardier Nordtrac AS har overdraft alle sine fordringer mot Dem til BRP Receivables Funding, LLC (“Erververen”) sammen med samtlige sikkerheter vi har i forhold ti Dem. Betaling av disse fordringer kan dermed kun skje med frigjørende virkning til Erververens bankkonto nr. [l].

English translation:

Bombardier Nordtrac AS has transferred all of its claims towards you to BRP Receivables Funding, LLC (the “Purchaser”) together with all related securities and guaranties. Payment of these claims can therefore not be made to any other party than to the Purchaser’s bank account

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EX-10.16

Exhibit 10.16

Execution Copy

UNANIMOUS SHAREHOLDERS AGREEMENT

among

J.A. Bombardier (J.A.B.) Inc.,

Bombardier Recreational Products Inc.

and

The Shareholders of J.A. Bombardier (J.A.B.) Inc.

Dated as of December 18, 2003

TABLE OF CONTENTS

1. EFFECTIVENESS; DEFINITIONS		2
1. 1.	Effectiveness	2
1. 2.	Definitions	2
2. VOTING AGREEMENT AND SPECIAL GOVERNANCE AGREEMENT		3
2.1.	Election of Board Members	3
2.2.	Removal and Replacement	7
2.3.	Election of Subsidiary Directors	7
2.4.	Significant Transactions and Special Consent for Specified Actions	7
2.5.	Quorum, Notice, etc.	12
2.6.	Management Coinvestment Program; Management Options, etc.	12
2.7.	Grant of Proxy	13
3. TRANSFER RESTRICTIONS		13
3.1.	Certain Permitted Transfers	13
3.2.	Additional Rights to Transfer Investor Shares; Etc.	15
3.3.	ROFO; Tag Alongs; and Drag Alongs	16
3.4.	Public	17
3.5.	Preferred Shares	17
3.6.	Class B Common Shares	17
3.7.	Indirect Transfers	17
3.8.	Impermissible Transfer	19
4. RIGHT OF FIRST OFFER; TAG ALONG AND DRAG ALONG RIGHTS		19
4.1.	Right of First Offer	19
4.2.	Tag Along	23
4.3.	Drag - Along Sale	26
4.4.	Miscellaneous	29
4.5.	Special ROFO	31
5. RIGHT OF PARTICIPATION (PREEMPTIVE RIGHT)		34
5.1.	Right of Participation	34
5.2.	Post-Issuance Notice	37
5.3.	Excluded Transactions	38
5.4.	Acquired Shares	38
5.5.	Termination of Preemptive Rights	38
6. INVESTOR GROUP REPRESENTATIVES		38
6.1.	Investor Group Representatives	38
6.2.	Authorization	39
6.3.	Replacement	39
6.4.	Action Binding on Investor Group	39
6.5.	Right to Rely	40
6.6.	Notice	40
6.7.	Specific Enforcement	40
7. REMEDIES		40
7.1.	Generally	40
7.2.	Deposit	40

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8. LEGENDS		41
8.1.	Restrictive Legend	41
9. AMENDMENT, TERMINATION, ETC.		41
9.1.	Oral Modifications	41
9.2.	Written Modifications	41
9.3.	Term	41
9.4.	Effect of Termination	41
10. DEFINITIONS		42
10.1.	Certain Matters of Construction	42
10.2.	Definitions	42
11. MISCELLANEOUS		50
11.1.	Confidential Information; Special Information Rights	50
11.2.	Committees	51
11.3.	Further Assurances	52
11.4.	Agreement to Redeem Class A Preferred Shares Upon IPO	52
11.5.	Authority; Effect	52
11.6.	Notices	53
11.7.	Binding Effect, Other Agreements, Etc.	55
11.8.	Descriptive Headings	55
11.9.	Counterparts	55
11.10	Severability	55
12. GOVERNING LAW		56
12.1.	Governing Law	56
12.2.	Consent to Jurisdiction	56
12.3.	Exercise of Rights and Remedies	56

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UNANIMOUS SHAREHOLDERS AGREEMENT

This Unanimous Shareholders Agreement (this “Agreement”) is made as of December 18, 2003 by and among:

(i) J.A. Bombardier (J.A.B.) Inc., a corporation incorporated under the CBCA (as hereinafter defined) (the “Corporation”);

(ii) Bombardier Recreational Products Inc., a corporation incorporated under the CBCA (“BRP”);

(iii) each Person executing this Agreement and listed as a Bain Investor on the signature pages hereto;

(iv) each Person executing this Agreement and listed as a Beaudier Group Investor on the signature pages hereto;

(v) each Person executing this Agreement and listed as a Caisse Investor on the signature pages hereto;

(vi) Bombardier Inc., a corporation incorporated under the CBCA (“Bombardier”);

(vii) such other Persons, if any, who from time to time become party to this Agreement as an Other Investor (on the terms and subject to the conditions set forth in this Agreement) by executing a counterpart signature page hereof designating such Person as an “Other Investor” (collectively, the “Other Investors”); and

(viii) such other Persons who from time to time become party hereto by executing a counterpart signature page hereof and are designated by the Board as “Managers” (the “Managers” and together with the Bain Investors, the Beaudier Group Investors, the Caisse Investors, Bombardier and the Other Investors, the “Shareholders”).

Recitals

1. The Corporation, which was formerly known as 6090851 Canada Inc., owns all of the outstanding shares of BRP.

2. BRP is party to that certain Purchase Agreement dated as of December 2, 2003 (as the same may be amended from time to time, the “Acquisition Agreement”) by and between BRP and Bombardier.

3. At the Closing, BRP will acquire from Bombardier the recreational products division of Bombardier and certain of its subsidiaries (including 4145321 Canada Inc.), on the terms and subject to the conditions of the Acquisition Agreement.

4. It is contemplated that the primary source of equity financing for the acquisition will be sales of Class A Common Shares to the Bain Investors, the Beaudier Group Investors and the Caisse Investors.

5. A portion of such equity financing may be provided through the sale of Class B Common Shares to certain Managers (as contemplated by Section 2.6.1 hereof). It is also contemplated that from time to time the Corporation will issue Options to purchase Class B Common Shares to Managers (as contemplated by Section 2.6.1 hereof).

6. Pursuant to the Acquisition Agreement, the Corporation will issue to Bombardier, as part of the consideration for the recreational products division, Class A Preferred Shares of the Corporation.

7. Immediately after the Closing, BRP and 4145321 Canada Inc. will be merged under the name of Bombardier Recreational Products Inc.

8. After giving effect to the above transactions, the Corporation’s Shares and all Options and Convertible Securities will be held as set forth on Schedule 1 hereto.

9. The parties believe that it is in the best interests of the Corporation and the Shareholders to set forth their agreement on certain matters, including the rules that Corporation’s shareholders wish to establish to govern the management of the Corporation, as well as their relationship as shareholders of the Corporation and the transfer of their shares.

Agreement

Now, therefore, in consideration of the mutual covenants and agreements herein contained, the parties to this Agreement hereby agree and understand as follows:

1. EFFECTIVENESS; DEFINITIONS.

1.1. Effectiveness. This Agreement shall become effective upon the Closing.

1.2. Definitions. Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 10 hereof.

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2. VOTING AGREEMENT AND SPECIAL GOVERNANCE AGREEMENT.

2.1. Election of Board Members. Each holder of Shares will cast all votes to which such holder is entitled in respect of the Shares, by written consent, to: (i) fix the initial number of members of the board of directors of the Corporation (the “Board”) at thirteen members; and (ii) elect as the initial members of the Board the persons identified on Schedule 2 hereto. In addition, each holder of Shares will thereafter cast all votes to which such holder is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, to fix the number of members of the Board and to elect designees as follows:

2.1.1. The Investors will be entitled to designate members of the Board as follows:

2.1.1.1. The Bain Investors will be entitled to designate five (5) members of the Board; provided, however, that such number will be reduced to three (3) at such time as the Bain Investors hold Class A Common Shares in an amount less than fifty percent (50%) of the Original Bain Shares and shall be reduced to zero at such time as the Bain Investors hold Class A Common Shares in an amount less than ten percent (10%) of the Original Bain Shares.

2.1.1.2. Subject to Sections 2.1.1.4, 2.1.1.5 and 2.1.1.6, the Beaudier Group Investors will be entitled to designate three (3) members of the Board; provided, however, that, until such time as the Beaudier Group Investors acquire all of the Original Caisse Shares, such number will be reduced to two (2) at such time as the Beaudier Group Investors hold Class A Common Shares (excluding any Caisse Acquired Shares) in an amount less than fifty percent (50%) of the Original Beaudier Group Shares and shall be reduced to zero at such time as the Beaudier Group Investors hold Class A Common Shares (excluding any Caisse Acquired Shares) in an amount less than ten percent (10%) of the Original Beaudier Group Shares.

2.1.1.3. The Caisse Investors will be entitled to designate two (2) members of the Board; provided, however, that such number will be reduced to one (1) at such time as the Caisse Investors hold Class A Common Shares in an amount less than fifty percent (50%) of the Original Caisse Shares and shall be reduced to zero at such time as the Caisse Investors hold Class A Common Shares in an amount less than ten percent (10%) of the Original Caisse Shares. Any and all members of the Board designated by the Caisse Investors pursuant to this Section 2.1.1.3 will be Resident Canadians, during the period that the undertakings provided by the Corporation to the Minister responsible for the Investment Canada Act in connection with the Closing remain applicable and for such additional time as may be necessary or appropriate to assure that the Corporation complies with provisions regarding Resident Canadian board representation under the CBCA or other applicable law.

2.1.1.4. If the Beaudier Group Investors acquire and hold, pursuant to the right of first offer provisions of Section 4.1.4.2 or otherwise, more than 50% (but less than or equal to 90%) of the Original Caisse Shares (such shares acquired from the Caisse Investors from time to time, the “Caisse Acquired Shares”), the Beaudier Group Investors shall be entitled to designate one (1) additional member of the Board in addition to the number of members they are entitled to pursuant to Section 2.1.1.2; provided, however, such number will thereafter be reduced to zero if the Beaudier Group Investors Transfer Class A Common Shares in an aggregate amount greater than the difference between (A) the Caisse Acquired Shares and (B) 50% of the number of Original Caisse Shares. This Section 2.1.1.4 shall not apply at any time when the Beaudier Group

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Investors have a right to designate any additional members to the Board pursuant to Section 2.1.1.5 or 2.1.1.6.

2.1.1.5. If the Beaudier Group Investors acquire and hold, pursuant to the right of first offer provisions of Section 4.1.4.2 or otherwise, more than 90% (but less than 100%) of the Original Caisse Shares, the Beaudier Group Investors shall be entitled to designate two (2) additional members to the Board in addition to the number of members they are entitled to pursuant to Section 2.1.1.2; provided, however, such number will thereafter be reduced to one, if the Beaudier Group Investors Transfer Class A Common Shares in an aggregate amount greater than the difference between (A) the Caisse Acquired Shares and (B) 90% of the number of Original Caisse Shares and thereafter to zero if the Beaudier Group Investors Transfer Class A Common Shares in an aggregate amount greater than the difference between (x) the number of Caisse Acquired Shares and (y) 50% of the number of Original Caisse Shares. This Section 2.1.1.5 shall not apply at any time when the Beaudier Group Investors have a right to designate additional members to the Board pursuant to Section 2.1.1.4 or 2.1.1.6.

2.1.1.6. If the Beaudier Group Investors acquire and hold (pursuant to the right of first offer provisions of Section 4.1.4.2 or otherwise) all of the Original Caisse Shares (after which the provisions of Sections 2.1.1.4 and 2.1.1.5 will no longer apply in any circumstance), the Beaudier Group Investors shall thereafter be entitled to designate two (2) members to the Board in addition to the members that they are then entitled to designate under Section 2.1.1.2; provided, however, that notwithstanding Section 2.1.1.4 and 2.1.1.5, the total number of members that they are authorized to designate pursuant to Section 2.1.1.2 and this Section 2.1.1.6 shall be reduced to three (3) at such time as the Beaudier Group Investors hold Class A Common Shares in an amount less than fifty percent (50%) of the aggregate number of Original Beaudier Group Shares and Original Caisse Shares; and shall be reduced to zero at such time as the Beaudier Group Investors hold Class A Common Shares in an amount less than ten percent (10%) of the aggregate number of Original Beaudier Group Shares and Original Caisse Shares.

2.1.1.7. For purposes of the calculations of continuing ownership under Sections 2.1.1.2, 2.1.1.4, 2.1.1.5 and 2.1.1.6, any Class A Common Shares issued upon conversion of the Class B Common Shares issued to the Beaudier Group Investors at Closing shall not be included as part of the Class A Common Shares held by the Beaudier Group Investors.

2.1.1.8. Any and all members of the Board designated by the Beaudier Group Investors pursuant to Sections 2.1.1.2, 2.1.1.4, 2.1.1.5 and 2.1.1.6 will be Resident Canadians, during the period that the undertakings provided by the Corporation to the Minister responsible for the Investment Canada Act in connection with the Closing remain applicable and for such additional time as may be necessary or appropriate to assure that the Corporation complies with

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provisions regarding Resident Canadian board representation under the CBCA or other applicable law.

2.1.2. The Investors (by action of the Majority Bain Investors, the Majority Beaudier Group Investors and the Majority Caisse Investors, in each case participating only for so long as their Investor Group is entitled to designate at least one member to the Board pursuant to Section 2.1.1) will be entitled to designate, collectively, three (3) independent members of the Board (or such greater number of independent board members as the Majority Investors may hereafter approve with the consent of all Investor Groups). The Investors will first attempt to designate such independent members by approval of each Investor Group that is then entitled to designate at least one member to the Board pursuant to Section 2.1.1.

2.1.3. If the Investor Groups are unable to reach an agreement as to the selection of the three (3) independent members of the Board pursuant to Section 2.1.2, the provisions of this Section 2.1.3 shall apply:

2.1.3.1. Subject to Section 2.1.3.4, the Bain Investors shall nominate three (3) individuals, the Beaudier Group Investors shall nominate two (2) individuals and the Caisse Investors shall nominate one (1) individual member (collectively “Initial Independent Nominees”). Each Investor will select for such Initial Independent Nominees only individuals who meet the criteria for independence set forth on Schedule 3.

2.1.3.2. Following such nominations, subject to Section 2.1.3.4, the Majority Bain Investors may reject two (2) of the Initial Independent Nominees, the Majority Beaudier Group Investors may reject one (1) of the Initial Independent Nominees and the Majority Caisse Investors may reject one (1) of the Initial Independent Nominees. Such rejection rights will be exercised serially (to assure that no single nominee is rejected by more than one group of Investors). If fewer than three (3) Initial Independent Nominees are so rejected, the Investors will continue to exercise the foregoing rejection rights (in the following order: first the Majority Bain Investors’ first rejection, then the Majority Beaudier Group Investors’ rejection, then the Majority Caisse Investors’ rejection and finally the Majority Bain Investors’ second rejection) until only three (3) Initial Independent Nominees remain to serve as the independent members of the Board.

2.1.3.3. If four Initial Independent Nominees are rejected pursuant to Section 2.1.3.2, the two remaining Nominees will be designated as independent members of the Board and the third and final independent member will be selected pursuant to this Section 2.1.3.3.

(i) For consideration as the third and final independent member of the Board, subject to Section 2.1.3.4, the Bain Investors shall nominate two (2) individuals, the Beaudier Group Investors shall nominate one (1) individual and the Caisse Investors shall nominate one (1) individual. In making these nominations, the Investors will nominate

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individuals who were not included in the Initial Independent Nominees and who meet the criteria for independence set forth in Schedule 3.

(ii) The two independent members determined as described in Section 2.1.3.2 will select from the nominees designated pursuant to clause (i) of Section 2.1.3.3, a third independent member, based on their assessment of the relevant business experience and personal attributes and of such other qualifications of such nominees as such two independent members may deem relevant. The Corporation and the Investors will instruct these two independent members to use their best efforts to make their selection without inquiring into or becoming aware of which Investor Groups nominated which of the individuals selected for consideration through the procedure described in clause (i) of this Section 2.1.3.3.

(iii) All parties will use their best efforts to assure that the two independent members who are to make the selection described in clause (ii) of this Section 2.1.3.3 do not gain knowledge of which Investors or Investor Groups nominated which individuals in the procedure described in clause (i) of this Section 2.1.3.3.

2.1.3.4. Each Investor Group will lose its right to nominate or reject prospective independent members of the Board or otherwise participate in the selection of independent members of the Board pursuant to this Section 2.1.3 at such time as that Investor Group no longer has any right to designate members of the Board pursuant to Section 2.1.1; provided that if and so long as the Beaudier Group Investors shall be entitled to designate a second Beaudier Director to serve on the Executive Committee pursuant to Section 11.2, the Beaudier Group Investors shall exercise the rights of the Caisse Investors under this Section 2.1.3.

2.1.3.5. All actions required to be taken by the Investors or Investor Groups under this Section 2.1.3 shall be taken as promptly as reasonably practicable.

2.1.4. In the event of any reduction in the aggregate number of members of the Board that the Investors are entitled to designate (as provided in Sections 2.1.1), the size of the Board will be correspondingly reduced. In the event of any increase in the number of independent members of the Board (as provided in Section 2.1.2) the size of the Board will be correspondingly increased.

2.1.5. If, in connection with an Initial Public Offering, the underwriters shall assert on reasonable grounds that an increase in the size of the Board or change in the manner of selecting its members from the procedures set forth in this Section 2.1 would substantially increase the price realized in or size of such offering, such changes will be made in such manner as any two Investor Groups shall reasonably determine effects the minimum change necessary to substantially mitigate the concerns asserted by the underwriters.

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2.1.6. Each holder of Shares will cast all votes to which such holder is entitled with respect to such Shares, whether at any annual or special meeting by written consent or otherwise, to fix the size of the Board and elect its members as provided in the foregoing provisions of this Section 2.1.

2.2. Removal and Replacement. Members of the Board designated by a particular Investor Group may only be removed by such Investor Group; except that any Resident Canadian who is so designated will be promptly removed and replaced with a Resident Canadian by the appropriate Investor Group if such member ceases to be a Resident Canadian (unless otherwise approved by all Investor Groups). Members of the Board designated by the Investors as a whole (i.e., those member who are either listed as independent directors on Schedule 2 of this Agreement or designated pursuant to Section 2.1.2 or Section 2.1.3) may only be removed with the consent of all Investor Groups and may only be replaced either with the approval of all Investor Groups or, in the absence of such approval, through the mechanics provided in Section 2.1.3. If, prior to his or her election to the Board, any designee of any Investor Group (or all Investor Groups, as the case may be) is unable or unwilling to serve as a member of the Board, then such Investor Group (or all Investor Groups acting together, as applicable) will be entitled to designate a replacement. If, following election to the Board, any designee of a particular Investor Group (or of all Investor Groups) resigns, is removed, or is unable to serve for any reason prior to the expiration of his or her term as a member of the Board, then such Investor Group (or all Investor Groups, as applicable) shall designate a replacement.

2.3. Election of Subsidiary Directors. The Corporation will cause the board of directors of BRP to consist at all times of the same members as the Board at such time. The Board shall determine the composition of the board of directors of any other subsidiary of the Corporation, provided that if at any time an Investor Group becomes entitled to nominate or designate members of the board of any other subsidiary of the Corporation (or if such Investor Group’s nominee is de facto appointed to such board of directors), then all other Investor Groups that then have a right under Section 2.1 to designate members of the Board will be provided rights to designate members of the board of such subsidiary and the board of such subsidiary will be comprised as agreed by all Investor Groups then entitled to designate members of the Board (but if all Investor Groups fail to so agree the Corporation will, at the request of any Investor Group, cause the board of such other subsidiaries to consist of the same members as the Board at such time). The Corporation will cause its subsidiaries to comply with these requirements.

2.4. Significant Transactions and Special Consent for Specified Actions.

2.4.1. Subject to Section 11.2, all decisions, including the following, with respect to the Corporation, BRP or their respective subsidiaries, will require (in addition to any approvals required under the CBCA) the approval of at least a majority of the entire Board described above:

(i) subject to Section 2.4.5 below (with respect to the initial chief executive officer and initial chief financial officer of the Corporation and BRP), the appointment and removal of the chief executive officer and the appointment and removal of the chief financial officer;

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(ii) an Initial Public Offering, whether a primary or secondary offering, and any issue of additional shares from treasury in a Public Offering at any time;

(iii) any capital transactions, including those involving either (i) issuances, repurchases or guarantees of debt (including capital lease obligations) in an amount greater than Cdn. $5 million in any twelvemonth period or in any series of related transaction or (ii) or issuance or repurchases of equity in any amount or (iii) interest rate or currency swap or hedging transactions or investments in or writing of derivative contracts that involve potential exposure in excess of Cdn. $5 million;

(iv) acquisitions of assets or businesses otherwise than in the ordinary course of business regardless of the form of the transaction including, without limitation, mergers, amalgamations, arrangements or consolidations;

(v) any restructuring, reorganization, winding up or dissolution, or seeking relief under any law relating to bankruptcy or insolvency, regardless of the form of the transaction including, without limitation, mergers, amalgamations, arrangements or consolidations;

(vi) closing of a division or line of business, or dispositions of assets or businesses otherwise than in the ordinary course of business regardless of the form of transaction including, without limitation, mergers, amalgamations, arrangements or consolidations;

(vii) any amendment to the articles of incorporation or by- laws (or equivalent constating documents);

(viii) declaration or payment of dividends or distributions or approval or change of any dividend policy;

(ix) approval of the annual operating and capital budgets and strategic plan and any material amendments thereto, including revenue, free cash flow and profit objectives and approval of any transaction not reflected in an approved budget;

(x) any material change in the nature of any of the lines of business otherwise than by acquisition or disposition (which acquisition or disposition has been separately approved by the Board if and to the extent such approval would be required by clause (iv), (v) or (vi) above);

(xi) subject to Section 2.4.1.3, any contract, agreement or commitment between the Corporation, BRP or any of their respective subsidiaries (on the one hand), and any Shareholder, officer or Affiliate of any Shareholder or officer or other person who does not deal at arm’s length with either the Company or any Shareholder (on the other hand);

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provided, however, that this clause (xi) is not intended and should not be construed to require Board approval of ordinary course transactions among the Corporation and any direct or indirect wholly-owned subsidiaries of the Corporation;

(xii) subject to Section 2.6.1, any equity based management incentive plans;

(xiii) any establishment of a direct or indirect subsidiary which is not a wholly-owned subsidiary;

(xiv) selection of the auditors;

(xv) appointment of (a) any directors or similar governing body of any Significant Subsidiary or (b) any directors or similar governing body of any other direct or indirect subsidiary of the Corporation; and

(xvi) the establishment or selection of the members of any committee of directors (other than the Executive Committee, which will be established and selected as provided in Section 11.2).

2.4.1.2. The Board may delegate to specified officers authority to conduct day-to-day operations of the Corporation and its subsidiaries (other than actions of the types specifically identified in clauses (i) through (xvi) of Section 2.4.1, which must be approved by a majority of entire Board or the Executive Committee as contemplated by Sections 2.4.1 and 11.2) pursuant to, and subject to such limitations and further approval or control mechanics as may be included in, resolutions approved by a majority of the entire Board. Such resolutions may only be amended, repealed or otherwise modified with the approval of a majority of the entire Board.

2.4.1.3. In connection with actions taken by the Board or the Executive Committee with respect to interested party transactions of the type specified in clause (xi) of Section 2.4.1 (including any proposal to assert or settle any claim against Bombardier or any of its Affiliates with respect to the Acquisition Agreement or any other agreement, or to waive or amend any rights under the Acquisition Agreement or any other agreements entered into with Bombardier or any of its Affiliates), any member of the Board (or Executive Committee, as the case may be) who is an Affiliate of or who has any material interest in such other party will have a reasonable opportunity to participate in deliberations with respect to such matters but will declare such interest and refrain from voting on such matter, in which case the approval of the Board on any such matter will be deemed to have been satisfied with the approval of a majority of the other members of the Board.

2.4.1.4. The Corporation will cause its subsidiaries to comply with the requirements of this Section 2.4.1 and of Section 2.4.2 to the extent such requirements are by their terms applicable to subsidiaries.

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2.4.2. In addition, for so long as any Investor Group (together with its Affiliates) holds Class A Common Shares in an amount not less than 50% of the Class A Common Shares held by such Investor Group as of the Closing (including, for such purposes, any Class A Common Shares issued to such Investor Group within three (3) months of the Closing pursuant to the Subscription Agreement), the affirmative vote or consent by the holders of a majority of the Shares held by such Investor Group (the “Special Shareholder Approval”) shall be required for the actions described in the clauses (v), (vi), (vii), (x), (xi), (xv)(a) and (xvi) of Section 2.4.1; provided, however, that:

(i) such Special Shareholder Approval shall not be required if (A) such actions are taken after the fourth anniversary of the Closing, or (B) the Corporation or any of its direct or indirect subsidiaries breaches the terms of any loan, guarantee or other agreement or instrument relating to any indebtedness of the Corporation or any of its direct or indirect subsidiaries in excess of $25 million (or if there is a breach of the indebtedness of any other Person that is guaranteed by the Corporation or any such subsidiary to an extent in excess of $25 million), which breach either (x) has not been cured or waived (and in respect of which any applicable cure or notice period has expired), or (y) otherwise entitles any lender or other third party to then demand immediate payment of the indebtedness or accelerate the maturity of any indebtedness, or require payment on a guarantee, foreclosure on collateral, or take action of similar consequence;

(ii) such Special Shareholder Approval shall not be required after the second anniversary of the Closing with respect to (A) any closing or discontinuance of any division or line of business or (B) any disposition of the Johnson and Evinrude outboard engine business or the related parts and accessories businesses in whole or in part;

(iii) such Special Shareholder Approval shall not be required with respect to any closing, discontinuance or disposition of the utility vehicle division currently based in Granby, Quebec; and

(iv) with respect to any action to which Section 2.4.1.3 applies, such Special Shareholder Approval shall not be required from any Investor Group that designated (or otherwise is an Affiliate of) the Board or Executive Committee member who is disqualified under Section 2.4.1.3 from voting with respect to such matter.

2.4.3. If, in connection with an Initial Public Offering, the underwriters shall assert on reasonable grounds that elimination or restriction in the scope of the Special Shareholder Approval rights and requirements set forth in Section 2.4.2 would substantially increase the price realized in or size of such offering, such rights shall be eliminated, or their scope shall be restricted, in such manner as, in either case, any two Investor Groups shall reasonably determine effects the minimum change necessary to substantially mitigate the concerns asserted by the underwriters.

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2.4.4. Each holder of Shares agrees that:

2.4.4.1. If any action or proposed action of the type(s) identified in Section 2.4.1 receives the approval of the Board, and, if applicable, the Special Shareholder Approval from the applicable Investor Groups, (or their respective representatives, committees or agents) as contemplated by this Agreement, to the extent (if any) that such action or proposed action also requires Shareholder approval (under the CBCA or otherwise) then such Shareholder will (a) cast all votes to which such holder is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, in the same manner in which the majority of the members of the Board (or committee, if applicable) voted with respect to such action in providing the approval contemplated by Section 2.4.1 and (b) waive any and all dissenter’s rights, appraisal rights and similar rights in connection with such matter; provided, however, that a holder of the Corporation’s Class A Preferred Shares will not be required to vote Class A Preferred Shares held by it in favor of any action with respect to which the CBCA entitles holders of Class A Preferred Shares to a class vote if such action would: (i) remove or change prejudicially the preferential liquidation, dividend or redemption rights of the Class A Preferred Share or (ii) create a new class of shares’ (or increase the rights of any pre-existing class of shares) in a manner that would result in there being a class of shares equal or superior to the Class A Preferred Shares with respect to liquidation, dividend or redemption rights.

2.4.4.2. Notwithstanding the foregoing, the Caisse Investors may (subject to Section 2.4.4.3) vote in a manner contrary to that otherwise required by Section 2.4.4.1 or abstain from voting on matters described in Section 2.4.4.1; but if they so abstain then the vote required to approve such matters will be, to the maximum extent allowed under applicable law, only the consent of a majority of the shares actually voted in connection with such matter. To the extent permitted under applicable law, any failure of a Caisse Investor to vote its shares on any matter will not have the effect of a vote against that matter. If any shareholder action (for example, a “special resolution of shareholders” under the CBCA) is taken or proposed to be taken by written consent of shareholders in lieu of meeting and any Caisse Investor elects to abstain from such vote or action, the Majority Bain Investors or the Majority Beaudier Group Investors may request that such matter be submitted to a shareholder vote at a meeting; and if they do so request then the Corporation and the Investors will promptly convene such shareholder meeting and submit the matter to a vote of shareholders at such meeting.

2.4.4.3. If any Caisse Investors vote in a manner contrary to that otherwise required by Section 2.4.4.1 or abstain from a vote as contemplated by Section 2.4.4.2, and if after taking the additional steps contemplated by Section 2.4.4.2 (for example, holding a meeting of shareholders) such vote or abstention results in a failure to obtain any approval or consent (under this Agreement, the CBCA or otherwise) that could have been obtained had all Caisse Investors cast their votes in the same manner in which the majority of the

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members of the Board (or committee, if applicable) voted with respect to such action in providing the approval as contemplated by Sections 2.4.1 and 2.4.4.1, then thereafter Section 2.4.4.2 will not apply to such matter and all Caisse Investors will cast their vote and take other actions as required by Section 2.4.4.1.

2.4.5. The initial chief executive officer and chief financial officer of the Corporation and of BRP shall be Mr. Jose Boisjoli and Mr. Louis Morin respectively.

2.4.6. The members of the Board and the Shareholders may not use the Board approval rights under Sections 2.4.1 and the Special Shareholder Approval rights under Section 2.4.2 to circumvent the provisions set forth in Sections 3, 4 and 5.1.

2.4.7. The Corporation will not effect a public offering of equity securities of any subsidiary of the Corporation, or of any Affiliate of the Corporation without the consent of each Investor Group that is then entitled to designate a member of the Board pursuant to Section 2.1; and the Corporation will cause it subsidiaries to comply with this requirement.

2.5. Quorum, Notice, etc. In addition to any quorum requirements applicable to the Corporation under the CBCA, a quorum for any meeting of the Board shall require the presence of members constituting at least a majority of the entire Board, which majority shall include at least one Bain Director (so long as the Bain Investors are entitled to designate at least one member of the Board pursuant to Section 2.1.1), one Beaudier Director (so long as the Beaudier Group Investors are entitled to designate at least one member of the Board pursuant to Section 2.1.1), and one Caisse Director (so long as the Caisse Investors are entitled and have not waived their right to designate at least one member of the Board pursuant to Section 2.1.1.3); provided, that if a quorum fails to exist at any meeting because of the failure of at least one Bain Director, one Beaudier Director or one Caisse Director to attend or continue be present thereat (such Board member(s) not present the “Unrepresented Shareholder Directors”), such meeting shall be postponed to a date within 15 days thereafter (with at least 3 Business Days’ notice to all members), and so long as there is present at least a Majority of the Board the presence of the Unrepresented Shareholder Directors shall not be required for a quorum at the reconvened meeting. In addition, notices of regular meetings of the Board shall be given to its members at least 10 Business Days before such regular meetings and notices of special meetings of the Board shall be given to its members at least 5 Business Days before the such special meetings (or 3 Business Days in the event of a postponed meeting, as described above, or 1 Business Day in the event a Board or Shareholder meeting is called as contemplated by the last sentence of Section 2.4.4.2), in each case by mail, telegram or facsimile and email at his usual or last known business address, facsimile number or email address; but such notice requirement will not affect the ability of the Board and its members to waive such notice requirements in the manner allowed under the CBCA and the Corporation’s bylaws as in effect from time to time.

2.6. Management Coinvestment Program; Management Options, etc.

2.6.1. Each holder of Shares agrees that the Corporation will be authorized to, on terms and conditions established by the Board: (a) issue to management employees of the Corporation and its subsidiaries Options to purchase Class B Common Shares; and

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(b) provide management employees an opportunity to purchase Class B Common Shares within a period of less than three months from Closing. The size, amount, exercise or purchase price and other terms and conditions of such Option and equity purchase programs will be as determined by the Board; but the aggregate number of Shares to be made available to management employees (including both purchased Shares and Shares issuable upon exercise of Options) will not exceed 31,000,000 Shares unless otherwise approved in advance by each Investor Group then entitled to designate any member of the Board under Section 2.1.1. The Corporation will require any and all such management employees, as a condition to issuing any Options to such management employees or to selling any Shares to such management employees (as the case may be), to execute and deliver to the Corporation a counterpart signature page or other appropriate instrument of joinder pursuant to which such management employee agrees to become a party to this Agreement as a Manager. Any and all Shares issued to such Managers (including any Class B Common Shares issued upon exercise of Options) will be Management Shares hereunder.

2.6.2. Each holder of Shares will cast all votes to which such holder is entitled with respect to such Shares and take such other actions as may be reasonably requested of such holder to assure that the management equity programs described in Section 2.6.1 receive such approvals (including any approvals required under the CBCA, under the Corporation’s articles or by-laws or under any provision of this Agreement), if any, as may be required to implement and give effect to the provisions of Section 2.6.1

2.7. Grant of Proxy. Each holder of Shares other than the Investors hereby grants to the Corporation a proxy to vote his Shares in accordance with his agreements contained in this Section 2.

3. TRANSFER RESTRICTIONS. No holder of Shares shall Transfer any of such Shares to any other Person except as provided in this Section 3.

3.1. Certain Permitted Transfers.

3.1.1. Certain Specially Approved Transfers. Any holder of Common Shares may Transfer any or all of such Shares in a transaction not otherwise permitted under this Section 3 with the consent of all Investor Groups and the Corporation (which consent may in each instance specify conditions for such Transfer).

3.1.2. Upon Death; Pursuant to Corporation Right to Call Shares, etc. Upon the death of any holder of Common Shares who is a natural Person, such Shares may be distributed by the will or other instrument taking effect at death of such holder or by applicable laws of descent and distribution to such holder’s estate, executors, administrators and personal representatives, and then to such holder’s heirs, legatees or distributees, whether or not such recipients are Members of the Immediate Family of such holder. In addition any Manager may transfer Shares to the Corporation or BRP or any of their subsidiaries if the Corporation, BRP or any of their subsidiaries exercise any right to acquire such Shares upon the death or other termination of employment of such Shareholder.

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3.1.3. Additional Permitted Transfers by the Investors. Any holder of Investor Shares or Other Investor Shares (a) may Transfer any or all of such Shares to an Affiliate of such Investor (or Transfer any or all such Shares to any member of the same Investor Group to which such Investor belongs), except that in the case of a transfer by a Beaudier Group Member such Transfer of Shares pursuant to this clause (a) may only be made to a Family Holding Company and only for so long as (x) such transferee remains a Family Holding Company and (y) Beaudier in all instance continues to qualify as a Family Holding Company, or (b) after the Initial Public Offering, to its stockholders, partners or members in a general distribution to investors in or partners, members or stockholders of such Investor.

3.1.4. Financial Institutions. A holder of Investor Shares may also make a bona fide pledge of its Investor Shares to a Financial Institution as security for such holder’s repayment for a bona fide loan from such Financial Institution where (a) such Financial Institution has been approved in advance by each of the Majority Bain Investors, the Majority Caisse Investors and Majority Beaudier Group Investors (such approvals not to be unreasonably withheld or delayed so long as in the reasonable judgment of each Investor Group such transaction does not have the effect of circumventing the other provisions of this Agreement) and (b) such Financial Institution has undertaken (by agreement in form and substance satisfactory to the Corporation and approved by all Investor Groups) to become a party to this Agreement in the event of the realization of its security.

3.1.5. No Transfer permitted under the terms of this Section 3.1 (other than in a distribution pursuant to Section 3.1.3(b) or upon transfer to the Corporation or any of their subsidiaries pursuant to Section 3.1.2), nor any Transfer of ownership interests to a financial institution upon seizing of collateral or realization of security as contemplated by Section 3.1.4, shall be effective unless the transferee of such Shares (each, a “Section 3.1 Permitted Transferee”) has delivered to the Corporation a written acknowledgment and agreement in form and substance reasonably satisfactory to the Corporation that such Shares to be received by such Section 3.1 Permitted Transferee shall remain Investor Shares, Other Investor Shares, or Management Shares, as the case may be, and shall be subject to all of the provisions of this Agreement and that such Section 3.1 Permitted Transferee shall be bound by, and shall be a party to, this Agreement as the holder of Investor Shares, Other Investor Shares, or Management Shares, as the case may be, hereunder; provided, however, that (i) in the case of a Transfer pursuant to Section 3.1.4, the written acknowledgement and agreement referred to above which is delivered by the Financial Institution shall provide that the Financial Institution shall become an Other Investor hereunder and be subject to the terms of this Agreement applicable to Other Investors upon the realization of its security in the Shares pledged, hypothecated or otherwise provided as security, all of which shall after such realization be deemed to be Other Investor Shares for purposes of this Agreement; (ii) Shares Transferred to an Investor, a Manager or an Other Investor pursuant to Section 3.1.1 shall thereafter become Investor Shares, Management Shares or Other Investor Shares (as applicable) hereunder of like kind with the other Shares held by such Section 3.1 Permitted Transferee and its Affiliates; (iii) Shares transferred pursuant to Section 3.1.1 to a Person other than an Investor, a Manager or an Other Investor shall

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thereafter be treated and deemed to be Shares of such kind as may be approved by the Investor Groups and the Corporation in connection with their approval of such Transfer, (iv) no Transfer by any holder of Shares to a Section 3.1 Permitted Transferee shall relieve such holder of any of its obligations hereunder, (v) any Common Shares Transferred pursuant to clause (b) of Section 3.1.3 shall conclusively be deemed thereafter not to be Shares under this Agreement and transferee of such shares shall not have any rights or obligations under this Agreement or under the Registration Rights Agreement in respect of such Shares and (vi) any Shares Transferred to the Corporation, BRP or any of their subsidiaries pursuant to the second sentence of Section 3.1.2 will be cancelled and will conclusively be deemed thereafter not to be Shares under this Agreement.

3.2. Additional Rights to Transfer Investor Shares; Etc. In addition to Transfers permitted under Section 3.1, subject to Sections 4.1 and 4.2 (and, in the case of Transfers after the Initial Public Offering, Section 5.4 (Lock-up) of the Registration Rights Agreement), any holder of Investor Shares or Other Investor Shares, and their respective Section 3.1 Permitted Transferees, may Sell Shares as follows:

(i) after (18) eighteen months following Closing, a Sale for cash consideration in a Private Placement Transaction to any Person that is a Non-Strategic Institutional Investor approved by the Majority Bain Investors, the Majority Beaudier Group Investors and the Majority Caisse Investors (such approvals not to be unreasonably withheld or delayed) having at least Cdn. $1 billion (or an equivalent amount) under management;

(ii) after the Initial Public Offering, a Sale through a Recognized Securities Exchange, provided however, that in connection with any sale representing a sale by any Investor (or Investor Group) of more than five percent (5%) of the Investor Shares held by such Investor (or such Investor’s Investor Group) as of the Closing within a period of fifteen (15) consecutive days, the selling Investor shall provide a written notice of such proposed sale (including the number of Shares to be sold and the Recognized Securities Exchange upon which such Sale in proposed to be completed) to the other holders of Investor Shares at least twenty-four (24) hours prior to such Sale; and

(iii) after the fourth anniversary of Closing, a Sale for consideration consisting of cash, Marketable Securities or a combination of cash and Marketable Securities in a Private Placement Transaction to any Person (provided that if such Sale is to occur prior to the Initial Public Offering, such Person must also be approved by the Majority Bain Investors, the Majority Beaudier Group Investors and the Majority Caisse Investors, such approvals not to be unreasonably withheld or delayed).

3.2.1. No Transfer permitted under the terms of clause (i) or (iii) of this Section 3.2 to a Person other than an Investor that is already party to this Agreement shall

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be effective unless the transferee of such Shares (each, a “Section 3.2 Private Placement Permitted Transferee”) has delivered to the Corporation a written acknowledgment and agreement in form and substance reasonably satisfactory to the Corporation that: (a) such Shares to be received by such Section 3.2 Private Placement Permitted Transferee shall become Other Investor Shares for purposes of this Agreement, and shall be subject to all of the provisions of this Agreement applicable to Other Investor Shares and (b) such Section 3.2 Private Placement Permitted Transferee shall be bound by, and shall be a party to, this Agreement as an Other Investor hereunder and (c) in the case of any transfer by any Caisse Investor to a Person other than a Bain Investor or a Beaudier Group Investor only, that such Section 3.2 Private Placement Permitted Transferee shall be subject to the rights of first offer requirements of Section 4.1 and the preferential allocation provisions of Section 4.1.4.2 (and, to the extent that the Beaudier Group Investors do not exercise such preferential allocation and purchase rights, to reallocation to other Investors) to the same extent as the Caisse; provided, however, that if in the context of any Caisse Investor seeking to transfer as a Participating Seller pursuant to Section 4.2, the Prospective Buyer objects to the application of 4.1.4.2 to it, then upon such transfer by the Caisse Investors to such Prospective Buyer, the provisions of Section 4.1.4.2 will not apply to such transferee or any of its subsequent transferees.

3.2.2. Each Section 3.2 Private Placement Permitted Transferee (and all subsequent transferees who acquire such Shares as permitted pursuant to clause (i) or (iii) of Section 3.2) shall be deemed an Other Investor under this Agreement.

3.2.3. In addition, (a) any Prospective Selling Investor may, in connection with any Transfer pursuant to clause (i) or (iii) of Section 3.2 (and subject to compliance with the applicable provisions of Sections 4.1 and 4.2), elect to assign to any transferee that is, or that in such transaction becomes, an Other Investor (a) all or a portion of the demand registration rights of such Prospective Selling Investor under the Registration Rights Agreement and (b) the right to submit an Election Notice and purchase Shares under Section 4.1 provided that such Prospective Selling Investor and such Other Investor transferee notify the Corporation and all other Investors and Other Investors of such assignment of rights.

3.2.4. Any Common Shares Transferred pursuant to clause (ii) of this Section 3.2 (in each case other than to an Investor) shall conclusively be deemed thereafter not to be Shares under this Agreement.

3.3. ROFO; Tag Alongs; and Drag Alongs. In addition to other Transfers permitted under Sections 3.1 and 3.2, any holder of Common Shares may Transfer such Shares for consideration consisting of cash, Marketable Securities, or any combination of cash and Marketable Securities, on the terms and subject to the conditions of Sections 4.1,4.2 and 4.3; but no Prospective Selling Investor (as such term is used in Section 4.1) may transfer Shares under Sections 4.1 or 4.2 unless the Prospective Buyer (as such term is used in Section 4.2) and the relevant transaction meets one or more of the requirements of a permitted sale under clause (i) or (iii) of Section 3.2. Investor Shares Transferred pursuant to Section 4.1 to an Electing Purchaser shall thereafter become Investor Shares hereunder of like kind with the other Shares held by such Electing Purchaser and its Affiliates. Any Common Shares Transferred pursuant to

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Section 4.2 (in each case other than to an Investor or an Other Investor, or to a person who becomes an Other Investor in connection with such Transfer) or Section 4.3 shall conclusively be deemed thereafter not to be Shares under this Agreement.

3.4. Public. Subject to the provisions of Section 5.4 of the Registration Rights Agreement, any holder of Common Shares may Transfer such Shares in a Public Offering pursuant to the provisions of the Registration Rights Agreement, which Shares shall conclusively be deemed thereafter not to be Shares under this Agreement and not to be subject to any of the provisions hereof or entitled to the benefit of any of the provisions hereof.

3.5. Preferred Shares. The Preferred Shares cannot be Transferred at any time prior to December 31, 2013 and without the prior written consent of the Corporation and the Majority Investors. In addition, no Transfer of Preferred Shares after such date or for which such consent is obtained will be permitted unless the transferee of such Shares has delivered to the Corporation a written acknowledgment and agreement in form and substance satisfactory to the Corporation and the Majority Investors that the Preferred Shares to be received by such permitted transferee shall remain subject to all of the provisions of this Agreement and that such permitted transferee shall be bound by, and shall be a party to, this Agreement as the holder of Preferred Shares.

3.6. Class B Common Shares. Beaudier will not transfer any Class B Common Shares, or any Class A Common Shares issued upon conversion of Class B Common Shares, to any Person (whether or not such transferee is Beaudier Group Investor) until the earliest of (i) the third anniversary of the Initial Public Offering, (ii) such time as the Bain Investors are no longer entitled to designate any members of the Board, or (iii) such time as Beaudier and its Affiliates no longer own any other Class A Common Shares. Such restriction shall be in addition to the other restrictions on transfer of Class B Shares under this Agreement.

3.7. Indirect Transfers. The Beaudier Group Investors have entered into the Family Holding Companies’ Agreement to record their understandings with respect to their acquisition, holding and disposition of Shares and any direct or indirect issuance or transfer of ownership interests in Family Holding Companies. The Beaudier Group Investors have provided to the Corporation a copy of the Family Holdings Companies’ Agreement and hereby represent and warrant to the Corporation and to the Bain Investors that the english language translation of the Family Holding Companies’ Agreement also provided by the Beaudier Group Investors to the Bain Investors constitutes a complete and accurate translation in all material respects. The Beaudier Group Investors shall comply with, and shall not without the prior written consent of the Bain Investors and Caisse Investors amend, waive or otherwise vary, the provisions of the Family Holding Companies’ Agreement. For greater certainty:

3.7.1. Any Transfer or other transaction or occurrence or series of transactions or occurrences as a result of which a Beaudier Group Investor ceases to qualify as a Family Holding Company shall be considered for purposes of this Agreement to constitute a transfer of the Common Shares held by such Beaudier Group Investor in violation of this Agreement, unless cured as promptly as possible and in any event within 30 Business Days of such breach becoming known to such Beaudier Group Investor.

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3.7.2. The Beaudier Group Investors will promptly notify the Corporation and each other Investor of any Transfer, operation or other event that results in a Beaudier Group Investor no longer qualifying as a Family Holding Company.

3.7.3. The Beaudier Group Investors will provide to any other Investor or Investor Group Representative, upon reasonable notice from time to time, an officer certificate confirming that each member of the Beaudier Group Investors continues to qualify as a Family Holding Company.

3.7.4. If, as a result of any Transfer or other transaction or occurrence or series of transactions or occurrences, any Beaudier Group Investor ceases to qualify as a Family Holding Company and fails to cure such situation within the 30 Business Day period specified in Section 3.7.1, then such non-qualifying Beaudier Group Investor will forthwith distribute Shares held by it to one or more Members of the Bombardier/ Beaudoin Family as contemplated by the first paragraph of Section 2.3 of the Family Holding Companies’ Agreement. If such distribution occurs after the Initial Public Offering it will be done pursuant to Section 3.1.3(b) of this Agreement with no independent requirement for the transferee to sign this Agreement in connection with such distribution. But if such distribution is prior to the Initial Public Offering as a condition to such distribution each such transferee must sign and deliver to the Corporation a written acknowledgment and agreement in form and substance reasonably satisfactory to the Corporation that such Members of the Bombardier/Beaudoin Family will become Beaudier Group Investors under this Agreement and that the Shares distributed to them will remain Investor Shares for purposes of this Agreement and continue to be subject to all of the provisions of this Agreement applicable to Investor Shares held by Beaudier Group Investors.

3.7.5. If the distribution to Members of the Bombardier/ Beaudoin Family described in Section 3.7.4 (and contemplated by the first paragraph of Section 2.3 of the Family Holding Companies’ Agreement) is not possible or if the proposed transferee fails to sign and deliver such acknowledgement and agreement regarding joinder to this Agreement described in the final sentence of Section 3.7.4, then such non-qualifying Beaudier Group Investors will (a) offer all Shares held by such non-qualifying Beaudier Group Investor to other Beaudier Group Investors under the offer mechanics of Section 2.3 of the Family Holding Companies’ Agreement; and (b) if other Beaudier Group Investors who qualify as Family Holding Companies fail to purchase all such Shares, then such non-qualifying Beaudier Group Investor will offer to sell any remaining Shares held by it to the Bain Investors and the Caisse Investors at the fair market value of such shares (as determined by an independent third party), with the allocation of such remaining shares among the Bain Investors and the Caisse Investors to be as agreed between the Bain Investors and the Caisse Investors (or, in the absence of such agreement, in proportion to their respective ownership of Shares as of immediately prior to such offer); and (c) if, after giving effect to the foregoing, such non-qualifying Beaudier Group Investor continues to hold Shares then: (i) such non-qualifying Beaudier Group Investor will thereafter be treated as an “Other Investor” for purposes of this Agreement, (ii) the Shares held by such non-qualifying Beaudier Group Investor will thereafter be treated as an “Other Investor Shares” for purposes of this Agreement,

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(iii) accordingly (for the avoidance of doubt), among other things such non-qualifying Beaudier Group Investor will thereafter have no rights under Sections 2.1, 2.2, 2.3, 2.4.2 or 11.2 of this Agreement and the shares held by such non-qualifying Beaudier Group Investor will be deemed for purposes of Section 2.1.1 to be no longer held by Beaudier Group Investors.

3.7.6. For the period from the Closing until the earlier of three years after the Initial Public Offering or the fifth anniversary of the Closing, the Beaudier Group Investors will use reasonable efforts to cause Laurent Beaudoin (or, if he is unable or willing to serve, Pierre Beaudoin) to serve as the Delegate for the Family Holding Companies under the Family Holding Companies’ Agreement and as the Investor Group Representative of the Beaudier Group Investors under this Agreement.

3.8. Impermissible Transfer. Any attempted Transfer of Shares not permitted under the terms of this Section 3 shall be null and void, and the Corporation shall not in any way give effect to any such impermissible Transfer.

4. RIGHT OF FIRST OFFER; TAG ALONG AND DRAG ALONG RIGHTS.

4.1. Right of First Offer. If one or more holders of Investor Shares or of Other Investor Shares (each such holder, a “Prospective Selling Investor”) proposes to Sell any Common Shares in a transaction pursuant to Section 3.2(i), 3.2(iii) or as one of the Drag-Along Initiating Sellers pursuant to Section 4.3, such proposed Sale shall not be consummated except in compliance with this Section 4.1:

4.1.1. Notice. The Prospective Selling Investors shall furnish a written notice of such proposed Sale (an “Offer Notice”) to each other Investor and to each Other Investor to whom the right to participate in purchases under this Section 4.1 has been assigned as provided in clause (b) of Section 3.2.3 (each, a “First Offer Holder”) not less than thirty (30) days prior to any such proposed Sale. The Offer Notice shall notify each First Offer Holder of the Prospective Selling Investors’ intent to sell and shall include: (i) the number of Common Shares proposed to be sold by the Prospective Selling Shareholder (the “Subject Shares”), (ii) the name and address of the Prospective Buyer, if known, and (if and when available) a copy of agreement with the Prospective Buyer, (iii) the per Share consideration proposed for such a Sale (the “ROFO Price”), (iv) whether the Prospective Selling Investors intend to exercise the rights under Section 4.3 (in which case the Offer Notice shall relate to all Shares held by the Prospective Selling Investors), and (v) all other material terms and conditions of the Proposed Transfer, including the intended method of Transfer, to the extent then known.

4.1.2. Exercise. Each First Offer Holder may elect to purchase all or any portion of the Subject Shares at the per Share price equal to the ROFO Price and otherwise on the same terms and conditions specified in the Offer Notice by delivering, within thirty (30) days after effectiveness of the Offer Notice to the First Offer Holder(s), a written notice of such election (an “Election Notice”) to the Corporation, the Prospective Selling Investor and the other First Offer Holder(s), if any, stating the number of Common Shares held by such First Offer Holder and the percentage of Subject Shares which such

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First Offer Holder proposes to purchase, which proposed percentage may be more or less than such First Offer Holder’s respective pro rata ownership interest. Each such First Offer Holder who so elects to purchase any Subject Shares is referred to herein as an “Electing Purchaser”. The acceptance by each Electing Purchaser in his Election Notice shall be irrevocable, and be subject to no condition other than the provision and funding of financing, as contemplated in Section 4.1.3 below. Each First Offer Holder who does not elect to purchase any Subject Shares through the submission of an Election Notice as provided above shall be deemed to have waived all of its rights to participate in the purchase of the Subject Shares contemplated by the related Offer Notice.

4.1.3. Evidence of Financing. Within 45 days following the delivery of the Election Notice, the Electing Purchaser shall deliver the Prospective Selling Investor evidence of available funds and/or committed financing for the Electing Purchaser’s purchase of Subject Shares. If such evidence is not delivered within such 45 day period, or, taken as a whole, is subject to broader conditions or otherwise less definite than the BRP Deal Commitment Letter, the Election Notice of such Electing Purchaser shall be deemed to be withdrawn.

4.1.4. Allocation Among First Offer Holders.

4.1.4.1. If more than one First Offer Holder elects to purchase Subject Shares and the First Offer Holder(s) elect to purchase collectively more than the aggregate number of Subject Shares, then Subject Shares shall first be allocated to each Electing Purchaser in an amount equal to the lesser of (a) the maximum amount of Subject Shares specified by each such Electing Purchaser in its written notice to the Corporation and (b) each such Electing Purchaser’s pro rata share of such Subject Shares based on the number of Common Shares owned by each Electing Purchaser as of immediately prior to the expiration of the period for submitting Election Notices. Any Subject Shares that remain following such procedure shall be offered and allocated to Electing Purchasers to the extent they express (or in the Election Notice expressed) a willingness to purchase additional Subject Shares (and, in the case of over-subscription for such additional Subject Shares, shall be allocated among Electing Purchasers in such manner as they may agree, or absent agreement pro rated in accordance with their respective ownership of Common Shares).

4.1.4.2. Notwithstanding Section 4.1.4.1, if the Prospective Selling Investor is Caisse (or an Other Investor to whom Caisse transferred Shares pursuant to clause (i) or (iii) of Section 3.2, except to the extent exempted from application of this provision by the provisions of clause (c) of Section 3.2.1) and Beaudier elects to purchase all or any portion of the Subject Shares, then the number of Subject Shares that Beaudier elected to purchase shall be allocated for purchase by Beaudier and the balance, if any, shall be allocated in accordance with Section 4.1.4.1.

4.1.4.3. Notwithstanding Sections 4.1.4.1 and 4.1.4.2, if any Electing Purchaser fails to provide evidence of financing as required under

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Section 4.1.3 (or, having provided such evidence, subsequently is unable to secure or close such required financing and is therefore unable to consummate the proposed purchase of Subject Shares as contemplated by Section 4.1.5), then Subject Shares may be reallocated among other Electing Purchasers as described in Section 4.1.4.1 to the extent they express (or in the Election Notice expressed) a willingness to accept such additional allocations.

4.1.5. Sale to First Offer Holders. If the Electing Purchaser(s) have collectively elected to purchase pursuant to this Section 4.1 all (but not less than all) of the Subject Shares, then the Electing Purchaser(s) will consummate such Sale as soon as practical, but in any event within 120 days of the delivery of the Offer Notice. If the Electing Purchaser(s) have collectively elected to purchase pursuant to this Section 4.1 less than all of the Subject Shares (or having elected to purchase all Subject Shares, due to collapse of financing or otherwise, are unable to consummate such purchase as set forth in this Section 4.1.5), then Prospective Selling Investors may elect to (a) proceed with such Sale of the Subject Shares pursuant to Section 3.2(i), 3.2(iii) or 4.3 (as the case may be), subject (except in the case of a Sale pursuant to Section 4.3) to the provisions of Sections 4.1.6 and 4.2, or (b) Sell to the Electing Purchaser(s) the number of Subject Shares that they offered to purchase in their Election Notices as soon as practical within 120 days of the delivery of the Offer Notice or (c) consummate any combination of the Sales contemplated by clauses (a) and (b) above. An Electing Purchaser may designate one or more Affiliates of such Electing Purchaser or one or more members of the same Investor Group as such Electing Purchaser (provided that if the Electing Purchaser is a Beaudier Group Investor such Affiliate or other member must then still be qualified as a Family Holding Company) to purchase from the Prospective Selling Investor all or any portion of the Subject Shares that such Electing Purchaser elected to purchase; provided that, if such Affiliate is not already a party to this Agreement, then as a condition to such purchase, such Affiliate must become a party to and bound by this Agreement as an Investor (or Other Investor, as the case may be). All amounts payable by an Electing Purchaser (or designee thereof) pursuant to this Section 4.1 shall be paid in cash at the closing of such purchase or, to the extent provided in the Offer Notice, in installments of cash over time.

4.1.6. Transfer to Third Parties. If the Electing Purchaser(s) do not collectively elect to purchase all of the Subject Shares (or having elected to purchase all Subject Shares, due to collapse of financing or otherwise, are unable to consummate such purchase as set forth in Section 4.1.5), the Prospective Selling Investor may, subject to Section 4.2, Sell all (but not less than all) of the Subject Shares to one or more third parties pursuant to Section 3.2(i), 3.2(iii) or 4.3 for consideration per share no less than the ROFO Price specified in, and on other terms no more favorable to such third parties than those set forth in, such Offer Notice; provided that: (i) the number of Subject Shares eligible to be sold in such Sale by the Prospective Selling Investor shall be reduced to the extent required pursuant to Section 4.2.4; (ii) such Sale(s) by the Prospective Selling Investor may be made only within the nine-month period immediately following the last date for submission of Election Notices (or, if applicable, Tag Along Offers) with respect to such Sale and (iii) nothing herein is intended or will be construed to limit a Prospective Selling Investor from selling a portion of the Subject

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Shares to the Electing Purchaser(s) and only the balance (subject to Section 4.2) to a third party pursuant to Section 3.2(i), 3.2(iii) or 4.3 (as the case may be) as contemplated by Section 4.1.5. In the event the Subject Shares are not Sold in accordance with the immediately preceding sentence, the Subject Shares shall be subject to the provisions of this Section 4.1 in connection with any subsequent Transfer or proposed Transfer of such Subject Shares pursuant to Section3.2(i), 3.2(iii) or 4.3, unless the failure to complete such sale resulted from the failure of any Electing Purchaser to comply with the terms of this Section 4.1 in which case the Subject Shares that were allocated to such defaulting Electing Purchaser may, at the election of the Prospective Selling Investor, be Sold at any time to one or more other Electing Purchasers in accordance with Section 4.1 (or, if such other Electing Purchasers fail to purchase all such Subject Shares within 5 days then to one or more third parties in accordance with this Section 4.1.6). The Corporation shall cooperate reasonably with the Prospective Selling Investor in connection with such Transfer, including by furnishing information to the Prospective Buyer (subject to customary confidentiality agreements) and making members of the Corporation’s management available for interviews, due diligence and road shows.

4.1.7. If a Proposed Selling Investor proposes a Sale (pursuant to Section 3.2(i), 3.2(iii) or as an Approved Drag-Along Sale) in which the consideration to be paid or otherwise distributed to Shareholders would consist of anything other than cash, for purposes of determining whether the consideration payable in such transaction equals or exceeds the ROFO Price in the applicable Offer Notice: (i) cash will be valued at its face amount; (ii) the cash value of Marketable Securities, including Cash Equivalents, will be deemed, at any time, to be the weighted average trading price (by dollar volume) of such Marketable Securities for the most recent 30 trading days for such securities and (iii) any other consideration (including any retained equity that is not in the form of Marketable Securities) will be valued at zero.

4.1.8. If one or more Drag Along Initiating Sellers propose a Sale pursuant to Section 4.3 in which the consideration to Shareholders would include Marketable Securities, and at any time prior to the 30^th day preceding the date set for the closing of that Sale, such Marketable Securities shall trade in a range (calculated based on weighted average trading price (by dollar volume) of such Marketable Securities for the preceding 30 trading days for such securities) such that the total per Share consideration in such Sale would, if recalculated based on such most recent 30 trading days, be less than 90% of the ROFO Price set forth in the applicable Offer Notice (such lesser total per Share consideration value being referred to as the “New Cash Value”), then the Drag Along Initiating Sellers shall so notify the First Offer Holders and will have a period of 30 days to negotiate with the Prospective Buyer such changes as may be necessary to assure that the aggregate per Share consideration in such Sale (calculated on the basis described in Section 4.1.7) is not less than 90% of the ROFO Price set forth in such Offer Notice; but if the Drag Along Initiating Holders are not able, within that 30-day period, to achieve that result then (a) the Offer Notice shall be deemed to have been revised to reflect the New Cash Value; (b) the Drag Along Initiating Sellers will promptly so notify the First Offer Holders; and (c) the First Offer Holders or Electing Purchasers, as the case may be, shall have a period of five Business Days to withdraw or submit new Election Notices pursuant to Section 4.1.2.

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4.1.9. Cooperation Regarding Investment Canada. The Corporation and each Investor will, upon request of any Prospective Selling Investor, cooperate with one another in order to seek any order or modification to undertakings provided by the Corporation under the Investment Canada Act to the extent that such order or modification would facilitate such the Sale proposed by such Prospective Selling Investor; provided that the Corporation will not, and no Investor will be required to, incur any cost, make any change in the economic or other aspects of the proposed Sale transaction, suffer any delay, take any action that would limit the ability of any Prospective Selling Investor to Sell Subject Shares as contemplated by the Offer Notice delivered as set forth in this Section 4.1, or accept any further restriction or undertaking under the Investment Canada Act with respect to future action in relation to the Shares, the Corporation or its business that would be material and adverse to its interests.

4.2. Tag Along. In the event a Prospective Selling Investor delivers an Offer Notice in accordance with Section 4.1 and the Eligible Purchaser(s) do not elect to purchase all of the Subject Shares specified in such Offer Notice, such Prospective Selling Investor shall be entitled to Sell the Investor Shares identified in such Offer Notice in a transaction described in Section 3.2(i) or 3.2(iii) provided that such Prospective Selling Investor of Subject Shares complies with the provisions of this Section 4.2.

4.2.1. Notice. The Prospective Selling Investor will deliver a written notice (a “Tag-Along Notice”) to each other holder of Common Shares (each a “Tag Along Holder” and, collectively, the “Tag Along Holders”). The Tag-Along Notice will be provided not less than 5 Business Days prior to the applicable closing date for a Sale in which the consideration to Shareholders consists of only cash (and not less than 20 Business Days prior to the applicable closing date for a Sale in which the consideration to Shareholders includes non-cash consideration). The Tag Along Notice shall include: (i) the number of Subject Shares that such Prospective Selling Investor proposes to Transfer pursuant to Section 3.2(i) or 3.2(iii) (as well as the percentage of all Common Shares held by such Prospective Selling Investor that the Subject Shares constitute (the “Tag Along Sale Percentage”)); (ii) the name and address of the Prospective Buyer, if known, and (if and when available) a copy of the agreement with the Prospective Buyer; (iii) the proposed consideration per share, which must equal or exceed the ROFO Price set forth in the Offer Notice sent under Section 4.1.1 with respect to such transaction; (iv) any other material terms and conditions of the Proposed Transfer (including the material terms of any purchase agreement); and (v) an invitation to each Tag Along Holder to make an offer to include in the proposed Sale to the applicable Prospective Buyer an additional number of Common Shares held by such Tag Along Holder (not in any event to exceed the Tag Along Sale Percentage of the total number of Common Shares held by such Tag Along Holder), on the same terms and conditions, with respect to each Share Sold, as the Prospective Selling Investors shall Sell each of their Common Shares to the extent that such Tag Along Holders elect to exercise their co-sale rights under this Section 4.2.

4.2.2. Exercise. Each Tag Along Holder desiring to make an offer to include Common Shares in the proposed Sale (each a “Participating Seller” and, together with the Prospective Selling Investors, collectively, the “Tag Along Sellers”) shall furnish a

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written notice (the “Tag Along Offer”) to the Prospective Selling Investors not later than: (i) 3 Business Days after the effectiveness of the Tag Along Notice in the case of a Sale in which the consideration to Shareholders consists of only cash or (ii) 18 Business Days after the effectiveness of the Tag Along Notice in the case of a Sale in which the consideration to Shareholders includes non-cash consideration. The Tag Along Offer will set forth an offer to include the number of Common Shares (not in any event to exceed the Tag Along Sale Percentage of the total number of Common Shares held by such Participating Seller) which such Participating Seller desires to have included in the proposed Sale. Each Tag Along Holder who does not so accept the Prospective Selling Investors’ invitation to make an offer to include Common Shares in the proposed Sale shall be deemed to have waived all of his rights to participate in such Sale, and the Tag Along Sellers shall thereafter be free to Sell to the Prospective Buyer, at a per share price no greater than the per share consideration set forth in the Tag Along Notice and on other principal terms which are not materially more favorable to the Tag Along Sellers than those set forth in the Tag Along Notice, without any further obligation to such non-accepting Tag Along Holder pursuant to this Section 4.2.

4.2.3. Irrevocable Offer. The offer of each Participating Seller contained in his Tag Along Offer shall be irrevocable, and, to the extent such offer is accepted, such Participating Seller shall be bound and obligated to Sell in the proposed Sale on the same terms and conditions, with respect to each Common Share Sold, as the Prospective Selling Investors, up to such number of Common Shares as such Participating Seller shall have specified in his Tag Along Offer; provided, however, that if the terms of the proposed Sale change with the result that the per share consideration shall be less than the per share consideration set forth in the Tag Along Notice (other than from a change in the value of the Marketable Securities, if any, included in the per share consideration) or the other material terms shall be materially less favorable to the Tag Along Sellers than those set forth in the Tag Along Notice, each Participating Seller shall be permitted to withdraw the offer contained in his Tag Along Offer and shall be released from his obligations thereunder.

4.2.4. Reduction of Shares Sold. The Prospective Selling Investors shall attempt to obtain the inclusion in the proposed Sale of the entire number of Common Shares which each of the Tag Along Sellers requested to have included in the Sale (as evidenced in the case of the Prospective Selling Investors by the Tag Along Notice and in the case of each Participating Seller by such Participating Seller’s Tag Along Offer). In the event the Prospective Selling Investors shall be unable to obtain the inclusion of such entire number of Common Shares in the proposed Sale, the number of Common Shares to be sold in the proposed Sale shall be allocated among the Tag Along Sellers in proportion, as nearly as practicable, as follows:

(i) there shall be first allocated to each Tag Along Seller a number of Common Shares equal to the lesser of (A) the number of Common Shares offered to be included by such Tag Along Seller in the proposed Sale pursuant to this Section 4.2, and (B) a number of Common Shares equal to the aggregate number of Common Shares proposed to be purchased by the Prospective Buyer in the proposed Sale multiplied by a

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fraction, the numerator of which is the aggregate number of Common Shares held by such Tag Along Seller, and the denominator of which is the aggregate number of Common Shares held by all Tag Along Sellers (the “Pro Rata Portion”); and

(ii) the balance, if any, not allocated pursuant to clause (i) above shall be allocated to the Prospective Selling Investors pro rata to each such Prospective Selling Investor based upon the number of Common Shares held by such Prospective Selling Investor, or in such other manner as the Prospective Selling Investors may otherwise agree.

4.2.5. Additional Compliance. If prior to consummation, the terms of the proposed Sale shall change with the result that the per share price to be paid in such proposed Sale shall be greater than per share consideration set forth in the Tag Along Notice (other than from a change in the value of the Marketable Securities, if any, included in the per share consideration) or the other principal terms of such proposed Sale shall be materially more favorable to the Tag Along Sellers than those set forth in the Tag Along Notice, the Tag Along Notice shall be null and void, and it shall be necessary for a separate Tag Along Notice to be furnished pursuant to this Section 4.2, and the terms and provisions of this Section 4.2 separately complied with, in order to consummate such proposed Sale. If the Prospective Selling Investors have not completed the proposed Sale within nine (9) months following the date of the effectiveness of the Tag Along Notice delivered pursuant to Section 4.2.1 with respect to the Proposed Sale, each Participating Seller shall be released from his obligations under his Tag Along Offer, the Tag Along Notice shall be null and void, and it shall be necessary for a separate Tag Along Notice to be furnished, and the terms and provisions of this Section 4.2 separately complied with, in order to consummate such proposed Sale, unless the failure to complete such proposed Sale resulted from any failure by any Participating Seller to comply with the terms of this Section 4.

4.2.6. Cooperation Regarding Investment Canada. The Corporation and each Investor will, upon request of any Participating Seller, cooperate with one another in order to seek any order or modification to undertakings provided by the Corporation under the Investment Canada Act to the extent that such order or modification would facilitate such Participating Seller’s participation in a Sale under Section 4.2; provided that the Corporation will not, and no Investor will be required to, (i) incur any cost, (ii) make any change in the economic or other aspects of the proposed Sale transaction, (iii) suffer any delay, (iv) subject to the following provisions of this Section 4.2.6, take any action that would limit the ability of any Prospective Selling Investor or of any other Participating Seller to Sell Subject Shares as contemplated by the Tag Along Notice and Tag Along Offers delivered as set forth in this Section 4.2 or make any changes to its rights and obligations hereunder, or (v) accept any further restriction or undertaking under the Investment Canada Act with respect to future action in relation to the Shares, the Corporation or its business that would be material and adverse to its interests. If notwithstanding such efforts any Caisse Investor is precluded from selling Subject Shares in accordance with its rights under Section 4.2 due to the failure or inability of the Corporation to obtain an order or modification contemplated under this Section 4.2.6, no

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Sale under this Section 4.2 shall take place unless the Participating Sellers are able to structure the transaction that complies with those Investment Canada Act undertakings (and, if such efforts to restructure the Sale include identifying an alternative buyer, other than the original Prospective Buyer, then such alternative or substitute buyer for the Shares of the Caisse Investor in that Sale will be deemed to be a Prospective Buyer and no party will have any separate purchase right under Section 4.1 or co-sale rights under Section 4.2 with respect to the transfer by Caisse Investors of Shares to such alternative buyer as part of the Sale pursuant to this Section 4.2).

4.2.7. Caisse Tag in Certain Change of Control Transactions. If the Caisse Investors exercise, to the full extent of their respective Tag Along Sale Percentages, the right under this Section 4.2 to become a Tag-Along Seller in a Sale prior to the Initial Public Offering that would constitute a Change of Control and result in termination of this Agreement but would not otherwise result in the Caisse Investors holding, in the aggregate, less than 10% of the Original Caisse Shares, then before completing that Sale (which gives rise to such tag-along participation rights under this Section 4.2) the Prospective Selling Investor will assure that (a)(i) the Caisse Investors will be consulted in the negotiation of contractual governance rights, if any, to be granted to the Investors after such Sale and (ii) the Caisse Investors receive customary piggy-back incidental registration rights with respect to the Common Shares held by Caisse after giving effect to such Sale or (b) as part of such Sale, the Caisse Investors are given the opportunity to Sell (in addition to their portion of shares allocated to them pursuant to Section 4.2.4) additional Shares for some combination of cash, Cash Equivalents or Marketable Securities (having a value, determined as described in Section 4.1.7, not less than the price per Share otherwise applicable to Shares included in the Sale as provided above) such that the Caisse Investors would hold, in the aggregate, no more than 10% of the Original Caisse Shares after taking into account the Sale of such additional Shares. All Investors waive any right that they might otherwise have under Section 4.1 to preempt by right of first offer under Section 4.1, or to participate under Section 4.2 in, the sale of those additional Shares by the Caisse Investors.

4.3. Drag- Along Sale.

4.3.1. If one or more Investors meeting the requirements described in clause (i), (ii) or (iii) of Section 4.3.2 (the “Drag-Along Initiating Sellers”) determine to effect an Approved Drag-Along Sale and have complied with the provisions of Section 4.1 with respect to first offer rights applicable to such Sale (including the notice requirements of Section 4.1.1), then all other holders of Common Shares, Options, Warrants or Convertible Securities will sell all of the Common Shares, Options, Warrants and Convertible Securities held by such other holders in such Approved Drag Along Sale (or, in the event of a Sale structured as a sale of all or Substantially All assets, merger, consolidation, amalgamation or similar transaction will vote in favor of, consent to, participate in and not object or otherwise impede the consummation of, the Approved Drag-Along Sale).

4.3.2. The right to require holders of Common Shares, Options, Warrants and Convertible Securities to sell such Common Shares and other securities, vote in favor of,

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consent to, participate in and not object to such Approved Drag-Along Sale and or take other action pursuant to this Section 4.3 may be exercised only by the Investors and in the circumstances described in any of clauses (i), (ii) or (iii) of this Section 4.3.2, namely:

(i) at any time following the eighteenth month after the Closing, by one or more of the Majority Bain Investors, the Majority Caisse Investors or the Majority Beaudier Group Investors if the proposed Sale would provide per Share consideration to the Investors (in the form of cash or Marketable Securities paid or distributed to holders of Common Shares, calculated as provided in Section 4.1.7 and subject to the provisions of Section 4.1.8) equal to or in excess of four times the cash purchase price paid by the Investors for Class A Common Shares acquired at, or immediately prior to, the Closing; provided, however, that no Investor Group that then owns a majority of the Class A Common Shares then outstanding may be required under this Section 4.3.2(i) to participate in any Approved Drag-Along Sale unless the Investor Group that seeks to exercise rights under this Section 4.3.2(i) continues to own Class A Common Shares in an amount not less than 50% of all of the Class A Common Shares held by such Investor Group as of the Closing.

(ii) at any time following the fourth anniversary of the Closing by one or more Investors owning in the aggregate 50% or more of the aggregate Class A Common Shares then outstanding; and

(iii) at any time following the fourth anniversary of the Closing by either (a) the Bain Investors (acting alone) if the Bain Investors continue to hold all of the Class A Common Shares held by them as of the Closing, (b) the Beaudier Group Investors and the Caisse Investors (acting together) if Beaudier Group Investors and Caisse Investors, collectively, continue to hold all of the Class A Common Shares held by them as of the Closing, or (c) the Beaudier Group Investors (acting alone) if the Caisse Investors have transferred to the Beaudier Group Investors, pursuant to Section 4.1.4.2 or otherwise, all of the Class A Common Shares held by Caisse Investors as of the Closing and the Beaudier Group Investors continue to hold all of the Class A Common Shares held by them and the Caisse Investors as of the Closing.

4.3.3. Required Actions. In connection with any Approved Drag-Along Sale, each holder of Shares, Options, Warrants or Convertible Securities will: (a) cast all votes to which such holder is entitled in respect of the Shares (or other securities), whether at any annual or special meeting, by written consent or otherwise, in such manner as may be requested by the Drag-Along Initiating Sellers to approve any sale, recapitalization, merger, consolidation, amalgamation, reorganization or any other transaction or series of transactions involving the Corporation or its subsidiaries (or all or a substantial portion of their respective assets or of the Shares, Options, Warrants or Convertible Securities) in connection with, or in furtherance of, the exercise by any Investors of their rights under this Section 4.3; and (b) waive all dissenter’s rights, appraisal rights and similar rights

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applicable to any such transactions. If the Approved Drag-Along Sale is structured as a sale of shares, each holder of Common Shares will agree to sell, and will sell, all of its Common Shares and rights to acquire Common Shares on the terms and conditions so approved by the Drag-Along Initiating Sellers; and, if and to the extent requested by the Drag-Along Initiating Sellers, the holders of Options, Warrants or Convertible Securities will Sell such securities as contemplated by Section 4.4.4. In furtherance of the foregoing, (a) each holder of Shares, Options, Warrants and Convertible Securities will take all actions (including executing the applicable purchase agreement and other documents) reasonably requested by the Drag-Along Initiating Sellers in connection with the consummation of the Approved Drag-Along Sale and (b) each holder of Shares, Options, Warrants or Convertible Securities will make such representations and warranties, provide such indemnities and enter into such other obligations (in each case subject to Section 4.4.2 below) as the Drag-Along Initiating Sellers may specify (but only to the extent the Drag-Along Initiating Sellers are similarly obligated) in connection with such Approved Drag-Along Sale. Each holder of Shares will also take such actions as may be required to cause the members of the Board (or members of the board of any subsidiary of the corporation) to approve and take all actions necessary to permit consummation of an Approved Drag-Along Sale to be effected in accordance with this Section 4.3, however structured (including replacing such members, if necessary).

4.3.4. Conditions to Shareholders’ Obligations. The obligations of the holders of Shares with respect to an Approved Drag-Along Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Drag-Along Sale, each holder of Common Shares will receive in respect of its Common Shares the same form of consideration and the same portion of the aggregate consideration (on a per Share basis) that other such holders of Common Shares receive in the Approved Drag-Along Sale; (ii) if any holders of Common Shares are given a choice or election as to the form and amount of consideration to be received in respect of such Common Shares, each holder of such Common Shares will be given the same choice or election; (iii) each holder of then currently exercisable Options, Warrants or other rights to acquire Common Shares will be given an opportunity to exercise such rights prior to the consummation of the Approved Drag-Along Sale and participate in such sale as holders of such class of Shares or will be subject to the treatment described in Section 4.4.4 and (iv) the Approved Drag-Along Sale will be completed within the nine-month period immediately following the last date for submission of Election Notices with respect to such Sale, unless the failure to complete such Approved Drag-Along Sale resulted from any failure by any Shareholder to comply with the terms of this Section 4.3.

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4.4. Miscellaneous. The following provisions shall be applied to any proposed Sale to which Section 4.1 or 4.2 or 4.3 applies:

4.4.1. Certain Legal Requirements. In the event the consideration to be paid in exchange for Common Shares in a proposed Sale pursuant to Section 4.1, 4.2 or 4.3 includes any securities, and the receipt thereof by a Participating Seller (other than an Investor that is an Accredited Investor) would require under applicable law (a) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (b) the provision to any Tag Along Seller or any Shareholder in an Approved Drag-Along Sale of any specified information regarding the Corporation, such securities or the issuer thereof, such Participating Seller or other Shareholder (other than any Investor that is an Accredited Investor) will not have the right to Sell Common Shares in such proposed Sale. In such event, the Prospective Selling Investors shall use reasonable efforts (without obligation to pay any costs or suffer any economic consequence), to cause to be paid to such Participating Seller or other Shareholder in exchange for their Common Shares, against surrender of the Common Shares (in accordance with Section 4.4.6 hereof) which would have otherwise been Sold by such Participating Seller to the Prospective Buyer in the proposed Sale, an amount in cash equal to the total cash value of the consideration that the Participating Seller would have otherwise received, such value in the case of Marketable Securities to be deemed to equal the weighted average trading price (by dollar volume) of such Marketable Securities for the 15 Business Days immediately preceding the date on which such securities would have been issued in exchange for such Common Shares.

4.4.2. Further Assurances. The Corporation and each Participating Seller and Electing Purchaser, whether in his capacity as a Participating Seller, Electing Purchaser, shareholder, officer or director of the Corporation, or otherwise, shall take or cause to be taken all such actions as may be necessary or reasonably desirable in order expeditiously to consummate each Sale pursuant to Section 4.1, Section 4.2 or Section 4.3 and any related transactions (including, without limitation, to comply with Canadian Securities Laws or the U.S. Securities Exchange Act of 1934, as amended, and regulations promulgated thereunder (the “Exchange Act”) respecting takeover bids or going private transactions) on the terms and subject to the conditions of this Agreement, including executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; furnishing information and copies of documents; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Prospective Selling Investors and the Prospective Buyer; provided, however, that Participating Sellers shall be obligated to become liable in respect of any representations, warranties, covenants, indemnities or otherwise to the Prospective Buyer solely to the extent provided in the immediately following sentence; and provided further that if it shall be necessary to comply with Canadian Securities Laws or the Exchange Act respecting takeover bids or going private transactions, the outside date for closing any such sale determined in accordance with Sections 4.1, 4.2 or 4.3 shall be extended by such time (not exceeding 90 days) as shall be necessary in order to effect such compliance. Without limiting the generality of the foregoing, each Participating Seller will execute and deliver such agreements as may be reasonably specified by the Prospective Selling Investors

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(provided that such Prospective Selling Investors will also be party to such agreements and bound by the same representations, warranties, covenants, indemnities and other terms), including agreements having terms that are customary is such circumstances to (a) (i) make individual representations, warranties, covenants and other agreements as to the unencumbered title to its Shares and the power, authority and legal right to Transfer such Shares and the absence of any Adverse Claim with respect to such Shares and (ii) be liable in respect of such representations, warranties, covenants and other agreements up to the full amount of all proceeds to such Participating Seller in connection with such Sale and (b) be liable (whether by purchase price adjustment, indemnity payments or otherwise) in respect of representations, warranties, covenants and agreements in respect of the Corporation and its subsidiaries; provided, however, that the aggregate amount of liability described in this clause (b) in connection with any Sale of Shares shall not exceed the lesser of (i) such Participating Seller’s pro rata portion of any such liability, to be determined in accordance with such Participating Seller’s portion of the total number of Shares included in such Sale or (ii) 30% of the proceeds to such Participating Seller in connection with such Sale. Each holder of Shares will also take such actions as may be required to cause the members of the Board (or members of the board of any subsidiary of the corporation) to approve and take all actions necessary to permit consummation of an Approved Drag-Along Sale to be effected in accordance with Section 4.3, however structured (including replacing such members, if necessary).

4.4.3. Sale Process. The Drag-Along Initiating Sellers (in the case of a proposed Sale pursuant to Section 4.3) or the Prospective Selling Investors (in the case of a proposed Sale pursuant to Section 4.1 or 4.2) shall, in their sole discretion, decide whether or not to pursue, consummate, postpone or abandon any proposed Sale and the terms and conditions thereof. No holder of Investor Shares nor any Affiliate of any such holder shall have any liability to any other holder of Shares arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any proposed Sale except to the extent such holder shall have failed to comply with the provisions of this Section 4.

4.4.4. Treatment of Options, Warrants and Convertible Securities. To the extent that any Options, Warrants or Convertible Securities are subject to any Approved Drag-Along Sale pursuant to Section 4.3, the Drag Along Initiating Sellers may elect to require the holders of such Options, Warrants or Convertible Securities to: (i) exercise, convert or exchange such Options, Warrants or Convertible Security on a cashless conversion or net exercise basis immediately prior to the closing of such Sale, if permitted under the terms of any such Option, Warrant or Convertible Security, to the extent necessary to Sell Common Shares to the Prospective Buyer or (ii) sell such Options, Warrants or Convertible Securities in any Sale pursuant to Section 4.3, and provide that such holders shall receive in exchange for such Options, Warrants or Convertible Securities consideration equal to the amount (if greater than zero) determined by subtracting from the aggregate purchase price per Common Share of Shares issuable upon exercise of such Options, Warrants or Convertible Securities to the extent then exercisable or convertible the aggregate exercise price that would have been payable in connection with the exercise or conversion of such Options, Warrants or Convertible Securities to the extent then exercisable or convertible. The terms, conditions, obligations and restrictions applicable

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under this Agreement to holders of Shares in connection with any Approved Drag-Along Sale (including the provisions of Sections 4.4.1, 4.4.2 and 4.4.3) shall apply mutatis mutandi to holders of Options, Warrants and Convertible Securities.

4.4.5. Expenses. All reasonable out-of-pocket costs and expenses incurred by the Drag-Along Initiating Sellers or the Corporation in connection with any proposed Sale pursuant to Section 4.3 (whether or not consummated), including all attorneys fees and charges, accounting fees and charges and finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Corporation; but if one or more proposed Sales pursuant to Section 4.3 are not consummated, the Corporation will not have to pay or reimburse more than $1,000,000 worth of such expenses of the Drag-Along Initiating Seller in connection with those failed transactions. Each Shareholder will pay any other costs and expenses incurred by it in connection with any proposed Sale pursuant to this Section 4.3 (whether or not consummated).

4.4.6. Closing. The closing of a Sale to which Section 4.1, 4.2 or 4.3 applies shall take place at such time and place as the Prospective Selling Investors or the Drag-Along Initiating Sellers (as the case may be) shall specify by notice to each Participating Seller. At the closing of such Sale, each Participating Seller shall deliver the certificates evidencing the Shares to be Sold by such Participating Seller, duly endorsed, or with stock (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any liens or encumbrances, with any stock (or equivalent) transfer tax stamps affixed, against delivery of the applicable consideration.

4.5. Special ROFO. After the Initial Public Offering, the Beaudier Group Investors shall have a priority right of first offer in respect of any proposed Transfer of Investor Shares by Caisse Investors under Section3.2(ii) or in accordance with the Registration Rights Agreement.

4.5.1. If the Caisse Investors desire to Transfer any Investor Shares in accordance with Section 3.2(ii), they shall furnish a written notice to the Beaudier Group Investors. Such notice (a “Special Notice”) shall set out the number of Investor Shares proposed to be Transferred, the manner in which they are proposed to be Transferred, the price at which the Caisse Investors propose to Transfer such Investor Shares (the “Specified Price”), and a period of either two (2) Business Days or five (5) Business Days, as the Caisse Investors may elect (the “Acceptance Period”), during which the Beaudier Group Investors may irrevocably agree to purchase such shares at the Specified Price. The Beaudier Group Investors may accept the offer contained in the Special Notice with respect to all the shares referred to therein by furnishing a written notice (an “Acceptance Notice”) to the Caisse Investors within the Acceptance Period specified in the Special Notice. In such event, the Transfer shall be completed within 60 Business Days of receipt of the Acceptance Notice. Such acceptance shall not be conditional upon financing for the acquisition being obtained by the Beaudier Group Investors but if the Beaudier Group Investors fail to complete the Transfer prior to the end of the 60 Business Days period (i) due to an inability to pay for Shares at closing, this Section 4.5 shall cease to apply and Caisse Investors shall be free, in addition to any other recourse it may have against the Beaudier Group Investors, at any time thereafter, to Transfer any Investor Shares in accordance with Section 3.2(ii) or under the Registration Rights

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Agreement or (ii) for any other reason then this Section 4.5 shall cease to apply with respect to the Investor Shares that the Beaudier Group failed to acquire and Caisse Investors shall be free, in addition to any other recourse it may have against the Beaudier Group Investors, at any time thereafter, to Transfer any such Investor Shares in accordance with Section 3.2(ii) or under the Registration Rights Agreement.

4.5.1.1. If the Beaudier Group Investors do not furnish an Acceptance Notice pursuant to Section 4.5.1, the Caisse Investors shall be free to Transfer any part or all of the Investor Shares referred to in the Special Notice in accordance with Section 3.2(ii) at a price which is not less than the Specified Price and in the manner therein referred to during (A) the ten (10) Business Days following the expiry of the Acceptance Period, if a two (2) Business Day period was specified in the Special Notice; or (B) the thirty-five (35) Business Days following the expiry of the Acceptance Period, if a five (5) Business Day period was specified in the Special Notice.

4.5.1.2. In the event that the Special Notice specified an Acceptance Period of five (5) Business Days; the Beaudier Group Investors did not deliver an Acceptance Notice in response to the Special Notice; and the Caisse Investors subsequently failed to Transfer all the Investor Shares referred to in the Special Notice during the subsequent period of thirty-five (35) Business Days as aforesaid; within the two (2) Business Days following the termination of such thirty-five (35) Business Day period, the Caisse Investors may furnish a further Special Notice (the “Second Notice”) setting out the same Specified Price with respect to the remaining balance of the Investor Shares, whereupon the Beaudier Group Investors shall have one (1) Business Day in which to accept the offer contained in the Second Notice. If the Beaudier Group Investors do not furnish an Acceptance Notice in response to the Second Notice as aforesaid, the Caisse Investors shall during the following ten (10) Business Days be free to Transfer such remaining Investor Shares pursuant to Section 3.2(ii) at a price not less than the Specified Price.

4.5.2. If the Caisse Investors are considering Transferring Investor Shares pursuant to their rights under the Registration Rights Agreement, they shall furnish the Beaudier Group Investors with a written notice to that effect, setting out the material details then known to the Caisse Investors of the transaction or alternatives being considered, including the number of Investor Shares the Caisse Investors are considering Transferring and the proposed timing, in each case to the extent then known. The Caisse Investors shall thereafter continuously and promptly provide the Beaudier Group Investors information known to the Caisse Investors with respect to the proposed offering which would assist the Beaudier Group Investors in preparing to be ready to acquire the Investor Shares which the Caisse Investors are considering Transferring. Such notice and consultation process shall create no obligation on the part of the Caisse Investors to the Beaudier Group Investors or any other Person.

4.5.2.1. Not less than three (3) Business Days prior to entering into an agreement with an underwriter or other financial intermediary with respect to

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the sale of Investor Shares in accordance with the Registration Rights Agreements the Caisse Investors shall furnish a written notice (a “Special Notice”) to the Beaudier Group Investors setting forth the number of Investor Shares proposed to be sold as aforesaid; and their good faith estimate of the price at which the shares are expected to be sold in the transaction (the “Specified Price”). The Beaudier Group Investors may during the two (2) following Business Days irrevocably accept the offer contained in the Special Notice to acquire all the Investor Shares referred to therein at the Specified Price by furnishing a written notice (an “Acceptance Notice”) to the Caisse Investors.

4.5.2.2. If the Beaudier Group Investors do not furnish an Acceptance Notice pursuant to Section 4.5.2.1, during the thirty-five (35) Business Days following the effectiveness of the Special Notice, the Caisse Investors may Transfer the Investor Shares referred to in the Special Notice in a transaction reasonably corresponding to the details provided to the Beaudier Group Investors pursuant to Section 4.5.2.

4.5.2.3. If the Beaudier Group Investors furnish an Acceptance Notice pursuant to Section 4.5.2.1, the transaction shall be completed as contemporaneously as may be practicable and desirable with the closing of the Public Offering of Shares by other shareholders in accordance with the Registration Rights Agreement in which the Caisse Investors would otherwise have participated. If such Public Offering is not completed within sixty (60) Business Days of the Acceptance Notice by the Beaudier Group Investors given under Section 4.5.2.1 the transaction shall nevertheless be completed within such sixty (60) Business Days period. If the Beaudier Group Investors fail to complete the transaction prior to the end of the 60 Business Days period due to an inability to pay for Shares at closing, this Section 4.5 shall cease to apply and Caisse Investors shall be free, in addition to any other recourse it may have against the Beaudier Group Investors, at any time thereafter, to Transfer any Investor Shares pursuant to their rights under the Registration Rights Agreement or Section 3.2(ii) hereunder.

4.5.2.4. If the Beaudier Group Investors acquires shares from the Caisse Investors in accordance with Section 4.5.2.3 and the Public Offering specified therein occurred, promptly following such Public Offering, the Corporation shall advise the Caisse Investors and the Beaudier Group Investors of the price received by the Corporation or selling shareholders, as the case may be, net of underwriting and other like commissions and the out of pocket expenses of the distribution borne by such selling shareholders (the “Net Price”). If the Net Price is greater or less than the Specified Price, a price adjustment shall occur between the Caisse Investors and the Beaudier Group Investors and a payment shall be made promptly by one to the other such that, after giving effect to the payment, the Caisse investors shall have received from the Beaudier Group Investors the same net amount as they would have received had they participated in such Public Offering.

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4.5.3. If the price specified in a Special Notice shall exceed the price at which the Beaudier Group Investors may acquire the Investor Shares in accordance with Canadian Securities Laws without being required thereunder to make an offer at the same price to other shareholders and the Beaudier Group Investors notify the Caisse Investors in the Acceptance Notice that they intend to acquire such Shares in compliance with Canadian Securities Laws, the Beaudier Group Investors shall forthwith proceed to make the offer so required as promptly as possible.

5. RIGHT OF PARTICIPATION (PREEMPTIVE RIGHT). The Corporation shall not issue or sell any Shares or issue, sell or grant any Options, Warrants or Convertible Securities (or other rights to acquire Shares of the Corporation), or enter into any agreements providing for the issuance (contingent or otherwise) of, any Shares, in each case, to any Person (each an “Issuance” of “Subject Securities”), except in compliance with the provisions of Section 5.1 or 5.2.

5.1. Right of Participation.

5.1.1. Offer. Not fewer than thirty (30) days prior to the consummation of an Issuance, a notice (the “Participation Notice”) shall be furnished by the Corporation to each holder of Common Shares (the “Participation Offerees”). The Participation Notice shall include:

(a) The principal terms of the proposed Issuance, including (i) the amount and kind of Subject Securities to be included in the Issuance, (ii) the number of Equivalent Shares represented by such Subject Securities (if applicable), (iii) the percentage of the total number of Equivalent Shares outstanding as of immediately prior to giving effect to such Issuance which the number of Equivalent Shares held by such Participation Offeree constitutes (the “Participation Portion”), (iv) the price (including if applicable, the Price Per Equivalent Share) per unit of the Subject Securities and (v) the name and address of the Person to whom the Subject Securities will be issued (the “Prospective Subscriber”); and

(b) An offer by the Corporation to issue, at the option of each Participation Offeree, to such Participation Offeree such portion of the Subject Securities to be included in the Issuance as may be requested by such Participation Offeree (not to exceed such Participation Offeree’s Participation Portion of the total amount of Subject Securities to be included in the Issuance), on the same economic terms and conditions, with respect to each unit of Subject Securities issued to the Participation Offerees, as apply to the Prospective Subscribers in such Issuance.

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5.1.2. Exercise.

5.1.2.1. General. Each Participation Offeree desiring to accept the offer contained in the Participation Notice shall accept the offer in the Participation Notice by furnishing a written notice of such acceptance to the Corporation within twenty (20) days after the effectiveness of the Participation Notice specifying the amount of Subject Securities (not in any event to exceed the Participation Portion of the total amount of Subject Securities to be included in the Issuance) which such Participation Offeree desires to be issued (each a “Participating Buyer”). Each Participation Offeree who has not so accepted such offer shall be deemed to have waived all of his rights with respect to the Issuance, and the Corporation shall thereafter be free (for the 120-day period specified in Section 5.1.2.3) to issue Subject Securities in the Issuance to the Prospective Subscriber and any Participating Buyers, at a price no less than the minimum price set forth in the Participation Notice and on other principal terms not substantially more favorable to the Prospective Subscriber than those set forth in the Participation Notice, without any further obligation to such non-accepting Participation Offerees pursuant to Section 5. If, prior to consummation, the terms of such proposed Issuance shall change with the result that the price shall be less than the minimum price set forth in the Participation Notice or the other principal terms shall be substantially more favorable to the Prospective Subscriber than those set forth in the Participation Notice, it shall be necessary for a separate Participation Notice to be furnished, and the terms and provisions of this Section 5.1 separately complied with, in order to consummate such Issuance pursuant to this Section 5.1; provided, however, that in such case of a separate Participation Notice, the applicable period to which reference is made in Section 5.1.1 and in the first sentence of this Section 5.1.2.1 shall be fifteen (15) days and ten (10) days respectively.

5.1.2.2. Irrevocable Acceptance. The acceptance of each Participating Buyer shall be irrevocable except as hereinafter provided, and each such Participating Buyer shall be bound and obligated to acquire in the Issuance on the same terms and conditions, with respect to each unit of Subject Securities issued, as the Prospective Subscriber, such amount of Subject Securities as such Participating Buyer shall have specified in such Participating Buyer’s written commitment.

5.1.2.3. Time Limitation. If at the end of the 120th day following the date of the effectiveness of the Participation Notice the Corporation has not completed the Issuance, each Participating Buyer shall be released from his obligations under the written commitment, the Participation Notice shall be null and void, and it shall be necessary for a separate Participation Notice to be furnished, and the terms and provisions of this Section 5.1 separately complied with, in order to consummate such Issuance pursuant to this Section 5.1, unless the failure to complete such Issuance resulted from the failure of any Participating Buyer to comply with the terms of this Section 5.1 in which case, in which case the Corporation will have a reasonable time to complete such Issuance and any

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such breaching Participating Buyers will not be released from his obligations under or with respect to his acceptance of the offer contained in the Participation Notice

5.1.3. Other Securities. The Corporation may condition the participation of the Participation Offerees in an Issuance upon the purchase by such Participation Offerees of any securities (including debt securities) other than Subject Securities (“Other Securities”) in the event that the participation of the Prospective Subscriber in such Issuance is so conditioned. In such case, each Participating Buyer shall acquire in the Issuance, together with the Subject Securities to be acquired by it, Other Securities in the same proportion to the Subject Securities to be acquired by it as the proportion of Other Securities to Subject Securities being acquired by the Prospective Subscriber in the Issuance, on the same terms and conditions, as to each unit of Subject Securities and Other Securities issued to the Participating Buyers, as the Prospective Subscriber shall be issued units of Subject Securities and Other Securities.

5.1.4. Certain Legal Requirements. In the event that the participation in the Issuance by a holder of Common Shares (other than an Investor that is an Accredited Investor) as a Participating Buyer would require under applicable law (i) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (ii) the provision to any participant in the Sale of any specified information regarding the Corporation or the securities, such Shareholder (other than an Investor that is an Accredited Investor) shall not have the right to participate in the Issuance. Without limiting the generality of the foregoing, it is understood and agreed that the Corporation shall not be under any obligation to effect a registration of such securities under the Securities Act, or similar state, local or foreign statutes or the rules and regulations of the SEC, US state securities regulatory authorities or any Canadian Securities Authorities.

5.1.5. Further Assurances. Each Participation Offeree shall, whether in his capacity as a Participating Buyer, Shareholder, officer or director of the Corporation, or otherwise, take or cause to be taken all such reasonable actions as may be necessary or reasonably desirable in order expeditiously to consummate each Issuance pursuant to this Section 5.1 and any related transactions, including executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Corporation and the Prospective Subscriber. Without limiting the generality of the foregoing, each such Participating Buyer and Shareholder will execute and deliver such subscription and other agreements or documents specified by the Corporation to which the Prospective Subscriber will be party.

5.1.6. Expenses. All reasonable costs and expenses incurred by the holders of Investor Shares or the Corporation in connection with any proposed Issuance of Subject Securities (whether or not consummated), including all attorney’s fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Corporation. The reasonable fees and

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charges of a single legal counsel representing any or all of the other Shareholders in connection with such proposed Issuance of Subject Securities (whether or not consummated) shall be paid by the Corporation. Any other costs and expenses incurred by or on behalf of any other Shareholder in connection with such proposed Issuance of Subject Securities (whether or not consummated) shall be borne by such Shareholder.

5.1.7. Closing. The closing of an Issuance pursuant to Section 5.1 or 5.2 shall take place at such time and place as the Corporation shall specify by notice to each Participating Buyer. At the Closing of any Issuance under this Section 5.1.7, each Participating Buyer shall be delivered the notes, certificates or other instruments evidencing the Subject Securities (and, if applicable, Other Securities) to be issued to such Participating Buyer, registered in the name of such Participating Buyer or his designated nominee, free and clear of any liens or encumbrances, with any transfer tax stamps affixed, against delivery by such Participating Buyer of the applicable consideration.

5.2. Post-Issuance Notice. Notwithstanding the notice requirements of Sections 5.1.1 and 5.1.2, if approved in writing by the Majority Investors, the Corporation may proceed with any Issuance prior to having complied with the provisions of Section 5.1; provided that the Corporation shall:

(a) provide to each holder of Common Shares who would have been a Participation Offeree in connection with such Issuance (i) with prompt notice of such Issuance and (ii) the Participation Notice described in Section 5.1.1 in which the actual price per unit of Subject Securities (and, if applicable, actual Price Per Equivalent Share) shall be set forth;

(b) offer to issue to such Shareholder such number of securities of the type and proportion issued in the Issuance as may be requested by such holder (not to exceed such Participation Offeree’s Participation Portion as defined in Section 5.1 multiplied by the number of Equivalent Shares included in the Issuance) on the same economic terms and conditions with respect to such securities as the subscribers in the Issuance received; and

(c) keep such offer open for a period often Business Days, during which period, each such holder of Common Shares may accept such offer by sending a written acceptance to the Corporation committing to purchase an amount of such securities (not in any event to exceed the Participation Portion as defined in Section 5.1 multiplied by the number of Equivalent Shares included in such issuance).

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5.3. Excluded Transactions. The preceding provisions of this Section 5 shall not apply to:

(a) Any Issuance of Common Shares upon the exercise or conversion of any Common Shares, Options, Warrants or Convertible Securities outstanding on the date hereof or issued after the date hereof in compliance with the provisions of this Section 5;

(b) The Issuance of Shares to the Investors in connection with the Closing (including any Shares issued pursuant to the Subscription Agreement around the time of or within three (3) months following the Closing);

(c) Any Issuance of shares of Common Shares, Options or Convertible Securities to officers, employees or directors of the Corporation or its subsidiaries that has been approved by the Board (or the Executive Committee) in connection with such Person’ employment arrangements with the Corporation or its subsidiaries (including the Issuances of stock options and sales of Common Shares contemplated by Section 2.6.1);

(d) Any Issuance of Common Shares, Options, Warrants or Convertible Securities in connection with any stock split or similar distribution or any merger, amalgamation, business combination or acquisition transaction involving the Corporation or any of its subsidiaries; or

(e) Any Issuance of Common Shares pursuant to or following the Initial Public Offering.

5.4. Acquired Shares. Any Subject Securities constituting Common Shares acquired by any Shareholder pursuant to this Section 5 shall be deemed for all purposes hereof to be Investor Shares, Other Investor Shares and Management Shares hereunder of like kind with the Shares then held by the acquiring Shareholder.

5.5. Termination of Preemptive Rights. The obligations of the Company to comply with Section 5 shall terminate upon an Initial Public Offering.

6. INVESTOR GROUP REPRESENTATIVES.

6.1. Investor Group Representatives. In order to efficiently administer the transactions contemplated hereby, including the nomination or veto of prospective independent members of the Board as contemplated by Section 2.1.3, delivery of notices to any Investor under this Agreement and the communications of approvals or consent of various Investor Groups under various provisions of this Agreement (including Section 2.4.2), the Investors hereby designate the following Investor Group Representatives:

6.1.1. Mr. Joshua Bekenstein will serve as the initial Investor Group Representative for the Bain Investors until such time, if any, as the Majority Bain Investors elect to replace its Investor Group Representative and notify the Corporation and the other Investors (or the Investor Group Representative for such other Investors Groups) of such replacement of the identity and address of the new Investor Group Representative for the Bain Investors;

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6.1.2. Mr. Laurent Beaudoin will serve as the initial Investor Group Representative for the Beaudier Group Investors until such time, if any, as the Majority Beaudier Group Investors elect to replace its Investor Group Representative and notify the Corporation and the other Investors (or the Investor Group Representative for such other Investors Groups) of such replacement of the identity and address of the new Investor Group Representative for the Beaudier Group Investors; and

6.1.3. Mr. Luc Houle will serve as the initial Investor Group Representative for the Caisse Investors until such time, if any, as the Majority Caisse Investors elect to replace its Investor Group Representative and notify the Corporation and the other Investors (or the Investor Group Representative for such other Investors Groups) of such replacement of the identity and address of the new Investor Group Representative for the Caisse Investors.

6.2. Authorization Each Investor Group Representative is hereby authorized (i) to give and receive all notices required to be given under this Agreement to or on behalf of any member of the Investor Group for which such Investor Group Representative has been designated as a representative and (ii) to take any and all additional action as is contemplated to be taken by or on behalf of its respective Investor Group.

6.3. Replacement. If any Investor Group Representative becomes unable to perform its responsibilities hereunder the Majority Bain Investors, the Majority Beaudier Group Investors or the Majority Caisse Investor (as the case may be) will promptly select and notify the Corporation and the other Investors of, a replacement representative to fill such vacancy and such substituted representative thereafter shall be deemed to be that Investor Group’s Investor Group Representative for all purposes of this Agreement until replaced pursuant to this Section 6.

6.4. Action Binding on Investor Group. All actions, decisions, instructions and notices of an Investor Group Representative taken, made or provided in accordance with this Agreement shall be conclusive and binding upon the Investor Group (and all Shareholders within such Investor Group) for which that Investor Group Representative has been appointed as provided in this Section 6 to the same extent as if such Investor Group or Shareholder had taken such action, made such decision or provided or received such instruction or notice directly. These actions, decisions, instructions and notices may include, among other things, any: (a) designation of members of the Board under Sections 2.1.1 or 2.1.2; (b) nomination or veto of prospective independent Board members under Section 2.1.3; (c) removal of members of the Board by any Investor Group under Section 2.2; (d) Special Shareholder Approval action under Section 2.4.2; or (v) approval of officers under Section 2.4.5

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6.5. Right to Rely. The Corporation and all other Shareholders can rely conclusively on the instructions and decisions of such Investor’s Investor Group Representative, and no party hereunder nor any other Person shall have any cause of action against the Corporation or such other Shareholders for actions or omissions in reliance upon the instructions or decisions of that Investor’s Investor Group Representative.

6.6. Notice. Any notice required to be given to a member of an Investor Group under this Agreement shall be addressed to such member and may be sent either to such member or his Investor Group Representative. Any notice required to be given under this Agreement to an Investor Group shall be addressed and sent to such Investor Group Representative.

6.7. Specific Enforcement. Remedies available at law for any breach of the provisions of this Section 6 are inadequate; therefore, the Corporation, the Shareholders and the Investor Group Representatives will be entitled to temporary and permanent injunctive relief without the necessity of proving damages or posting bond if any party brings an action to enforce the provisions of this Section 6.

7. REMEDIES.

7.1. Generally. The Corporation and each holder of Shares shall have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder by the Corporation or any Shareholder. The parties acknowledge and agree that in the event of any breach of this Agreement, in addition to any other remedies which may be available, each of the parties hereto will be entitled to specific performance of the obligations of the other parties hereto and, in addition, to such other equitable remedies (including preliminary or temporary relief) as may be appropriate in the circumstances.

7.2. Deposit. Without limiting the generality of Section 7.1, but subject to the terms and conditions set forth below, if any holder of Shares fails to deliver to the purchaser thereof the certificate or certificates evidencing Shares to be Sold pursuant to Section 4 hereof, upon written notice to such holder of Shares such purchaser may, at its option, in addition to all other remedies it may have, deposit the purchase price for such Shares with any national bank or trust company having combined capital, surplus and undivided profits in excess of One Billion Dollars ($1,000,000,000) (the “ Escrow Agent”) and the Corporation shall cancel on its books the certificate or certificates representing such Shares and thereupon all of such holder’s rights in and to such Shares shall terminate. Thereafter, upon delivery to such purchaser by such holder of the certificate or certificates evidencing such Shares (duly endorsed, or with stock powers duly endorsed, for transfer, with signature guaranteed, free and clear of any liens or encumbrances, and with any transfer tax stamps affixed), such purchaser shall instruct the Escrow Agent to deliver the purchase price (without any interest from the date of the closing to the date of such delivery, any such interest to accrue to such purchaser) to such holder. Notwithstanding the foregoing provisions of this Section 7.2, this Section 7.2 will not apply to either (a) any Caisse Investor that is in good faith contesting its obligation to deliver to a purchaser certificates evidencing Shares under Section 4 provided that Caisse notifies the purchaser promptly following receipt of the notice contemplated by the first sentence of this Section 7.2 for so long as such good faith contest continues; or (b) Beaudier if it is in good faith contesting its obligation to deliver to a purchaser certificates evidencing Shares under Section 4

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provided that Beaudier so notifies the purchaser promptly following receipt of the notice contemplated by the first sentence of this Section 7.2 for so long as such good faith contest continues; or (c) any other Beaudier Group Investor which (together with Beaudier) is in good faith contesting its obligation to deliver to a purchaser certificates evidencing Shares under Section 4 provided that such Beaudier Group Investor so notifies the purchaser promptly following receipt of the notice contemplated by the first sentence of this Section 7.2, for so long as such good faith contest continues to be maintained by both such Beaudier Group Investor and Beaudier.

8. LEGENDS.

8.1. Restrictive Legend. Each certificate representing Shares shall have the following legend endorsed conspicuously thereupon:

“The voting of the shares represented by this certificate, and the sale, encumbrance or other disposition thereof, are subject to the provisions of a Unanimous Shareholders Agreement to which the Corporation and its shareholders are party, a copy of which may be inspected at the principal office of the Corporation or obtained from the Corporation without charge.”

9. AMENDMENT, TERMINATION, ETC.

9.1. Oral Modifications. This Agreement may not be orally amended, modified, extended or terminated, nor shall any oral waiver of any of its terms be effective.

9.2. Written Modifications. This Agreement may be amended, modified, extended or terminated, and the provisions hereof may be waived, only by an agreement in writing signed by the Corporation, BRP, the holders of a majority of all Class A Common Shares then held by the Shareholders and each Investor Group that then continues to hold more ten percent (10%) of the Class A Common Shares held by such Investor Group as of the Closing (including, for such purposes, any Class A Common Shares issued to such Investor Group within three (3) months of the Closing pursuant to the Subscription Agreement). Each such amendment, modification, extension, termination and waiver shall be binding upon each party hereto and each holder of Shares subject hereto. In addition, each party hereto and each Shareholder subject hereto may waive any of its rights hereunder, including any right under Section 2, by an instrument in writing signed by such party or holder.

9.3. Term. The provisions of this Agreement will terminate and be of no further force or effect upon the earliest to occur of: (a) a Change of Control, (b) a time after the Closing when one Shareholder owns all of the outstanding Shares and (c) such time as the Majority Bain Investors, the Majority Beaudier Group Investors and the Majority Caisse Investors agree in writing to terminate this Agreement.

9.4. Effect of Termination. No termination under this Agreement shall relieve any Person of liability for breach prior to termination.

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10. DEFINITIONS. For purposes of this Agreement:

10.1. Certain Matters of Construction. In addition to the definitions referred to or set forth below in this Section 10:

(i) The words “hereof, “herein”, “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement shall include all subsections thereof;

(ii) The word “including” shall mean including, without limitation;

(iii) Definitions shall be equally applicable to both nouns and verbs and the singular and plural forms of the terms defined; and

(iv) The masculine, feminine and neuter genders shall each include the other.

10.2. Definitions. The following terms shall have the following meanings:

“Accredited Investor” has the meaning specified in Regulation D.

“Acquisition Agreement” has the meaning set forth in the Recitals.

“Adverse Claim” means any pledge, charge, lien, security interest, mortgage, adverse claim or other encumbrance of any kind or character.

“Affiliate” means, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise) and (b) with respect to any natural Person, any Member of the Immediate Family of such natural Person.

“Agreement” has the meaning set forth in the Preamble.

“Approved Drag-Along Sale” means any bona fide sale of the Corporation to any Person other than to an Affiliate of the Corporation or any Investor (whether structured as a Sale of Shares or assets, merger, consolidation, amalgamation, recapitalization, reorganization or any other transaction or series of such transactions involving the Corporation or its subsidiaries) which, if consummated, would result in (a) a sale of all or Substantially All of the assets of the Corporation in which the holders of Common Shares would receive consideration (whether in the form of purchase price, distributions of proceeds, dividend, redemption price, merger consideration or otherwise) consisting of cash or Marketable Securities or a combination of both cash and Marketable Securities, (b) a Change of Control in which the holders of Common Shares

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would receive consideration consisting of cash or Marketable Securities or a combination of both cash and Marketable Securities or (c) a combination of the results described in clauses (a) and (b) above; provided that in any such case the amount of cash included in the total consideration for such transaction equals not less than 25% of the total consideration value (calculated as provided in Section 4.1.7).

“Bain Director” means a member of the Board designated by one or more Bain Investors pursuant to the Section 2.1.

“Bain Investors” means Bain Capital Luxembourg Investments S.ar.l. and any of its Affiliates that from time to time holds Investor Shares originally issued to or issued with respect to Investor Shares originally issued to or held by such entities.

“Beaudier” means Beaudier Inc., a corporation incorporated under the CBCA.

“Beaudier Director” means a member of the Board designated by one or more Beaudier Group Investors pursuant to Section 2.1.

“Beaudier Group Investors” means Beaudier, the other Family Holding Companies and any Affiliate of Beaudier or of any other Family Holding Company that from time to time holds Investor Shares originally issued to or issued with respect to Investor Shares originally issued to or held by Beaudier or any Family Holding Company.

“Board” has the meaning set forth in Section 2.1.

“Bombardier” has the meaning set forth in the Preamble.

“BRP” has the meaning set forth in the Preamble.

“BRP Deal Commitment Letter” means the commitment letter dated November 11, 2003 from Merrill Lynch Capital Corporation, UBS Loan Finance LLC, UBS Securities LLC, Bank of Montreal and Royal Bank of Canada to BRP with respect to financing for the acquisition under the Acquisition Agreement.

“Business Day” means any day, other than a Saturday or Sunday, on which the principal commercial banks located in Montreal, Canada and Boston, Massachusetts (USA) are open for business during normal banking hours.

“Cash Equivalents” means:

(a) negotiable certificates of deposit, time deposits (including sweep accounts), demand deposits and bankers’ acceptances having a maturity of nine months or less and issued by any Financial Institution having capital and surplus and undivided profits aggregating at least $1,000,000,000 and rated at least Prime-1 by Moody’s or A-l by S&P.

(b) corporate obligations having a maturity of nine months or less and rated at least Prime-1 by Moody’s or A-l by S&P or issued by any Financial Institution; and

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(c) any direct obligation of the United States of America or Canada or any agency or instrumentality thereof, or of any state, province or municipality thereof, (i) which has a remaining maturity at the time of purchase of not more than one year or which is subject to a repurchase agreement with any Financial Institution (or any other financial institution referred to in clause (a) above) exercisable within one year from the time of purchase and (ii) which, in the case of obligations of any state or municipality, is rated at least Aaa by Moody’s or AAA by S&P; and

(d) any mutual fund or other pooled investment vehicle rated at least Aa by Moody’s or AA by S&P which invests principally in obligations described above.

“Caisse” means Caisse de dépôt et placement du Québec.

“Caisse Acquired Shares” has the meaning set forth in Section 2.1.1.4.

“Caisse Director” means a member of the Board designated by one or more Caisse Investors pursuant to Section 2.1.

“Caisse Investors” means Caisse and any Affiliate of Caisse that from time to time holds Investor Shares originally issued to or issued with respect to Investor Shares originally issued to or held by Caisse.

“Canadian Securities Authorities” means any of The British Columbia Securities Commission, Alberta Securities Commission, Saskatchewan Securities Commission, The Manitoba Securities Commission, Ontario Securities Commission, Commission des valeurs mobilières du Québec, Justice Securities Administration (New Brunswick), Nova Scotia Securities Commission, Registrar of Securities (Prince Edward Island), Director of Securities (Government of Newfoundland and Labrador), Registrar of Securities (Northwest Territories Justice Securities Registry), Registrar of Securities (Yukon Justice), Nunavut Legal Registries, and any of their successors.

“Canadian Securities Laws” means the securities legislation of each of the provinces and territories of Canada, as amended from time to time, and the rules, regulations, blanket orders and orders having application to the Corporation and forms made or promulgated under that legislation and the policies, instruments, bulletins and notices of one or more of the Canadian Securities Authorities.

“CBCA” means the Canada Business Corporations Act, R.S.C. 1985, c.C-44, as now enacted and as from time to time amended, reenacted or replaced and in effect from time to time.

“Change of Control” means any Transfer resulting in 70% or more of the then outstanding Class A Common Shares being held by any Person or group of Persons acting in concert (other than the Investors and their Affiliates and other than an underwriter in connection with a Public Offering).

“Class A Common Shares” means the Class A Common Shares of the Corporation.

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“Class B Common Shares” means the Class B Common Shares of the Corporation.

“Closing” means the consummation of the closing under the Acquisition Agreement.

“Closing Date” means the date on which the Closing occurs.

“Common Shares” means the common shares of the Corporation (including the Class A Common Shares and the Class B Common Shares).

“Competing Activities” means (a) manufacturing, selling, distributing, designing, developing or marketing recreational products, including snowmobiles, personal watercrafts, all-terrain vehicles, karts, sportboats, outboard engines, snow-grooming equipment and multipurpose tracked vehicles; (b) manufacturing, selling, distributing, designing, developing or marketing engines that power recreational products, including snowmobiles, personal watercrafts, all-terrain vehicles, sportboats, motorcycles, karts, scooters and light weight and ultra light aircraft; or (c) manufacturing, selling, distributing, designing, developing or marketing, accessories and clothing, or parts incorporated in or related to any of the products described in (a) and (b) hereof;

“Convertible Securities” means any evidence of indebtedness, share capital (other than Common Shares) or other securities (other than Options and Warrants) which are directly or indirectly convertible into or exchangeable or exercisable for Common Shares.

“Corporation” has the meaning set forth in the Preamble.

“Drag-Along Initiating Sellers” has the meaning specified in Section 4.3.1.

“Electing Purchaser” has the meaning set forth in Section 4.1.2.

“Equivalent Shares” means, at any date of determination, (a) as to any outstanding Common Shares, such number of shares and (b) as to any outstanding Options, Warrants or Convertible Securities, the maximum number of Common Shares for which or into which such Options, Warrants or Convertible Securities may at the time be exercised, converted or exchanged (or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the transaction or circumstance in connection with which the number of Equivalent Shares is to be determined).

“Escrow Agent” has the meaning set forth in Section 7.2.

“Executive Committee” has the meaning set forth in Section 11.2.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as in effect from time to time.

“Family Holding Companies” means, collectively, Beaudier, Jadier International Inc., Gestion J.I.C.A. inc. and Fonds Achbée Inc., in each case for so long as such corporation continues to be used as a holding corporation for some or all of the Members of the Bombardier/Beaudoin Family and Members of the Bombardier/Beaudoin Family continue to

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hold and own, directly or indirectly, not less than 85% of the beneficial ownership interests in such corporation.

“Family Holding Companies’ Agreement” means the Agreement dated December 18, 2003 among Beaudier, Jadier International Inc., Gestion J.I.C.A. inc. and Fonds Achbée Inc., a copy of which has been provided to the Corporation and each Investor Group Representative.

“Financial Institution” shall be a United States or Canadian bank or similar financial institution having a combined capital, surplus and undivided profit of at least $1,000,000,000.

“First Offer Holder” has the meaning set forth in Section 4.1.1.

“Initial Public Offering” means the first sale of Common Shares (whether in a primary offering of new shares or a secondary offering of issued and outstanding shares) to an underwriter for reoffering to the public in a Public Offering pursuant to (i) an effective registration statement filed with the SEC on Form S-l (or any successor form), (ii) a preliminary and final prospectus filed with any Canadian Securities Authority under Canadian Securities Laws or (iii) comparable mechanics under the securities laws of any other jurisdiction.

“Investor Group” means each of the Bain Investors, the Beaudier Group Investors and the Caisse Investors; and the phrase “consent of all Investor Groups” or “approval of all Investor Groups” or equivalent phrases means consent or approval by each of the Majority Bain Investors, the Majority Beaudier Group Investors and the Majority Caisse Investors.

“Investor Shares” means all Common Shares held by an Investor, whenever issued.

“Investors” means, collectively, Bain Investors, the Beaudier Group Investors and the Caisse Investors.

“Issuance” has the meaning set forth in Section 5.

“Majority Bain Investors” means, as of any date, the holders of a majority of the Class A Common Snares held by the Bain Investors.

“Majority Beaudier Group Investors” means, as of any date, the holders of a majority of the Class A Common Shares held by the Beaudier Group Investors.

“Majority Caisse Investors” means, as of any date, the holders of a majority of the Class A Common Shares held by the Caisse Investors.

“Majority Investors” means, as of any date, the holders of a majority of all Class A Common Shares then held by Investors and outstanding on such date.

“Management Shares” means (a) all Common Shares held by a Manager, whenever issued, including all Common Shares issued upon the exercise, conversion or exchange of any Options, Warrants or Convertible Securities and (b) all Options, Warrants and Convertible Securities held by a Manager (treating such Options, Warrants and Convertible Securities as a number of Shares equal to the number of Equivalent Shares represented by such Options,

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Warrants and Convertible Securities for all purposes of this Agreement except (i) for purposes of Sections 4.1, 4.2 and (ii) as otherwise specifically set forth herein).

“Managers” has the meaning set forth in the Preamble.

“Marketable Securities” means, (a) Cash Equivalents, and (b) any other securities that both (i) are listed or traded on a Recognized Securities Exchange and have an average daily trading volume of over $25 million (Cdn. Dollars or U.S. dollar equivalent, and calculated on 30-day weighted average (by dollar volume) basis) and (ii) subject to any customary lockup agreement entered into in connection with the Sale transaction (which will in no event prohibit trading for more than 180 days), will be tradable in either Canada or the U.S. without any further registration under the securities laws of such jurisdiction, subject to compliance with any applicable securities law limitations under Canadian or U.S. securities laws.

“Members of the Bombardier/Beaudoin Family” means, each of Laurent Beaudoin and Claire Bombardier Beaudoin, Janine Bombardier, J.R. André Bombardier and Huguette Bombardier Fontaine and Jean-Louis Fontaine, and any Member of the Immediate Family of each such individual.

“Members of the Immediate Family” means, with respect to any individual, each spouse (whether by marriage or civil union) or common law partner (as defined in the Income Tax Act (Canada)) or child or other descendants (whether by birth or adoption) of such individual, each spouse (whether by marriage or civil union) or common law partner (as defined in the Income Tax Act (Canada)) of any of the aforementioned individuals, each trust created solely for the benefit of one or more of the aforementioned Persons and their spouses and each custodian or guardian of any property of one or more of the aforementioned Persons in his capacity as such custodian or guardian.

“Non-Strategic Institutional Investor” means a pension fund, private equity investor, investment company or similar non- industrial investor that does not have any direct or indirect ownership interest of more than 15% in any Person that has, on a consolidated basis together with its controlled subsidiaries, revenues for the most recent fiscal year ending prior to the time of determination attributable to Competing Activities in excess of three hundred seventy-five million dollars ($375,000,000).

“Offer Notice” has the meaning set forth in Section 4.1.1.

“Options “ means any options to subscribe for, purchase or otherwise directly acquire Common Shares, other than any such option held by the Corporation or any right to purchase shares pursuant to this Agreement.

“Original Bain Shares” means the Class A Common Shares originally issued to the Bain Investors as of the Closing or issued to the Bain Investors within three (3) months after Closing pursuant to the Subscription Agreement.

“Original Beaudier Group Shares” means the Class A Common Shares originally issued to Beaudier Group Investors as of the Closing or issued to the Beaudier Group Investors within three (3) months after Closing pursuant to the Subscription Agreement.

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“Original Caisse Shares” means the Class A Common Shares originally issued to the Caisse Investors as of the Closing or issued to the Caisse Investors within three (3) months after Closing pursuant to the Subscription Agreement.

“Other Director” means a member of the Board designated by the Majority Investors, other than a Bain Director, Beaudier Director or Caisse Director.

“Other Investor Shares” means (a) all Common Shares originally issued to, or issued with respect to shares originally issued to, or held by, an Other Investor, whenever issued, including all Common Shares issued upon the exercise, conversion or exchange of any Options, Warrants or Convertible Securities and (b) all Options, Warrants and Convertible Securities originally granted or issued to an Other Investor (treating such Options, Warrants and Convertible Securities as a number of Shares equal to the number of Equivalent Shares represented by such Options, Warrants and Convertible Securities for all purposes of this Agreement except as otherwise specifically set forth herein).

“Other Investors” has the meaning set forth in the Preamble.

“Other Securities” has the meaning set forth in Section 5.1.3.

“Participating Buyer” has the meaning set forth in Section 5.1.2.1.

“Participating Seller” has the meaning set forth in Section 4.2.2.

“Participation Notice” has the meaning set forth in Section 5.1.1.

“Participation Offerees” has the meaning set forth in Section 5.1.1.

“Participation Portion” has the meaning set forth in Section 5.1.1.

‘“Person” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

“Preferred Shares” means the preferred shares of the Corporation (including the Corporation’s Class A Preferred Shares).

“Price Per Equivalent Share” means the Board’s good faith determination of the price per Equivalent Share of any Convertible Securities or Options which are the subject of an Issuance pursuant to Section 5 hereof, as determined by an independent committee of the Board formed for such purpose.

“Private Placement Transaction” means a sale or distribution of Shares that is not subject to registration requirement under applicable securities laws (including Canadian Securities Laws, Section 5 of the Securities Act or comparable provisions of the securities laws of other countries).

“Pro Rata Portion” has the meaning given to it in Section 4.2.3.

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“Prospective Buyer” means any Person proposing to purchase shares from a Prospective Selling Investor.

“Prospective Selling Investor” has the meaning set forth in Section 4.1

“Prospective Subscriber” has the meaning set forth in Section 5.1.1.

“Public Offering” means a public offering and sale of Common Shares for cash pursuant to (i) an effective registration statement under the Securities Act, (ii) a preliminary and final prospectus filed with any Canadian Securities Authority under Canadian Securities Law or (iii) comparable mechanics under the securities laws of any other jurisdiction.

“Recognized Securities Exchange” means any established trading market or quotation system for the trading of securities, including any established electronic securities market.

“Registration Rights Agreement” means the Registration Rights Agreement entered into on or about the date of this Agreement among the Corporation and the Investors.

“Regulation D” means Regulation D under the Securities Act.

“Resident Canadian” means an individual who is “Canadian” for purposes of both the Investment Canada Act and the CBCA.

“ROFO Price” has the meaning set forth in Section 4.1.1.

“Sale” means a Transfer for value.

“SEC” means the U.S. Securities and Exchange Commission.

“Section 3.1 Permitted Transferee” has the meaning set forth in Section 3.1.

“Section 3.2 Private Placement Permitted Transferee” has the meaning set forth in Section 3.2.

“Securities Act” means the Securities Act of 1933, as in effect from time to time.

“Securities Exchange Act” has the meaning specified in Section 4.4.2.

“Shares” means all Common Shares (including, all Investor Shares, Other Investor Shares and Management Shares), all Preferred Shares and all other share capital, if any, of the Corporation.

“Significant Subsidiary” means any direct or indirect subsidiary of the Corporation as of immediately after the Closing and any other Person which thereafter becomes a direct or indirect subsidiary of the Corporation and meets any of the following conditions: (a) the Corporation’s or its other subsidiaries’ investments in and advances to such subsidiary exceed 5% of the total assets of the Corporation and its subsidiaries on a consolidated basis; (b) the Corporation’s and its other subsidiaries proportionate share of the total assets (after inter-company eliminations) exceeds 5% of the total assets of the Corporation and its subsidiaries on a consolidated basis, or

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(c) the Corporation’s and its other subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle of such subsidiary exceeds 5% of such income of the Corporation and its subsidiaries on a consolidated basis.

“Shareholders” has the meaning set forth in the Preamble.

“Special Shareholder Approval” has the meaning set forth in Section 2.4.2.

“Subject Securities” has the meaning set forth in Section 5.

“Subject Shares” has the meaning set forth in Section 4.1.1.

“Subscription Agreement” means the Subscription Agreement entered into on or about the date of this Agreement among the Corporation and the Investors.

“Substantially All” means not less that 80%.

“Tag Along Holder” has the meaning set forth in Section 4.2.1.

“Tag Along Notice” has the meaning set forth in Section 4.2.1.

“Tag Along Offer” has the meaning set forth in Section 4.2.2.

“Tag Along Sale Percentage” has the meaning set forth in Section 4.2.1.

“Tag Along Sellers” has the meaning set forth in Section 4.2.2.

“Transfer” means any sale, assignment, pledge, hypothecation, granting of security interest in, encumbrance or other transfer or disposition of any Shares to any other Person, whether directly, indirectly, voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise.

“Warrants” means any warrants to subscribe for, purchase or otherwise directly acquire Common Shares.

11. MISCELLANEOUS.

11.1. Confidential Information; Special Information Rights.

11.1.1. Each Shareholder will keep confidential and will not disclose, divulge or use for any purpose, other than to monitor and manage its investment in the Corporation and for purposes incidental thereto, any Confidential Information, unless such Confidential Information (a) is known or becomes known generally to the public (other than as a result of a breach of this paragraph by such Shareholder) or (b) is made known or disclosed to the Shareholder by a third party who is not known by the Shareholder to owe a duty of trust or confidence to the Corporation; provided, however, (i) any Shareholder may disclose Confidential Information to (A) its representatives, attorneys, accountants, consultants, and other professionals on a confidential basis in connection

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with monitoring and managing its investment in the Corporation or (B) as may otherwise be required by law, legal process (including arbitration) or regulatory requirements (including tax regulatory requirements); and (ii) any Investor may also disclose Confidential Information to (A) any prospective purchaser of any Common Shares from such Shareholder in a proposed transaction to which Section 4.1, 4.2 or 4.3 applies if such prospective purchaser agrees to be bound by a confidentiality agreement in substantially the form attached hereto as Exhibit A and names the Corporation and the Investors as third party beneficiaries of such agreement or (B) any Affiliate of such Investor on a confidential basis or (C) to such Investors’ shareholders, limited partners or members on a confidential basis to the extent required by law or by agreements. For purposes of this paragraph, “Confidential Information” means any information with respect to this Agreement or arrangement contemplated by it and any confidential or proprietary information that such Shareholder obtains from the Corporation pursuant to financial statements, reports and other materials provided by the Corporation to such Shareholder.

11.1.2. Notwithstanding the foregoing, except as reasonably necessary to comply with applicable securities laws, each party (and each representative of such party) may disclose to any and all persons the tax treatment and tax structure of any transaction contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure.

11.1.3. The Corporation shall forthwith, without prior request and without any fees or charges whatsoever, for so long as any Investor Group is entitled to designate any member of the Board pursuant to Section 2.1 (but whether or not such Investor Group exercises such rights) provide to such Investor Group’s Investor Group Representative a copy of all notices, information and documents provided to the Board or to members of the board of BRP (or to members of the board of any other subsidiary which such Investor Group is then entitled under Section 2.3 to designate members of the board) at the same time and in the same manner as same are communicated to such members. Furthermore, as long as the Corporation is not a reporting issuer, the Corporation shall also provide to the Investor Group Representative, upon reasonable notice, access to all books and records or other information with respect to the Corporation or any Affiliate thereof, to the same extent and in the same manner as a director or a partner thereof, as the case may be, could legally require. This Section 11.1.3 shall cease to be in effect with respect to any Investor Group if and when the Investors constituting such Investor Group collectively own less than 10% of the number of Class A Common Shares originally issued to members of such Investor Group as of Closing (including, for such purposes, any Class A Common Shares issued to such Investor Group within three (3) months of the Closing pursuant to the Subscription Agreement).

11.2. Committees. From time to time, the Board may appoint one or more committees. The scope of authority for and composition of such committees will be approved in advance by the Board; provided that there shall be an executive committee of the Board (the “Executive Committee”) composed of: two Bain Directors (for so long as the Bain Investors are entitled to designate at least three Bain Directors pursuant to Section 2.1.1.1), one Beaudier Director (for so long as the Beaudier Group Investors are entitled to designate at least one Beaudier Director

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pursuant to Section 2.1.1.2) and one Caisse Director (for so long as the Caisse Investors are entitled to designate at least one Caisse Director pursuant to Section 2.1.1.3). If and when the Caisse Investors are no longer entitled to designate any members of the Board pursuant to Section 2.1.1.3, and if and for so long as the Beaudier Group Investors are entitled to elect at least two members of the Board under Section 2.1.1.5 or (to the extent Section 2.1.1.6 is applicable) at least three members of the Board under Sections 2.1.1.2 and 2.1.1.6, the Beaudier Group Investors will also be entitled to designate a second Beaudier Director to serve on the Executive Committee. The Executive Committee will have authority to take actions on behalf of the Board and to authorize the Corporation and its officers to take actions (including the actions specified in Section 2.4.1). Any matter as to which the vote of the Executive Committee is split in a tie vote shall be submitted to the entire Board for final decision.

11.3. Further Assurances. Subject to Section 2.4.4.1, each holder of Shares will cast all votes to which such Shareholder is entitled with respect to such Shares, whether at any annual or special meeting by written consent or otherwise, and take such other actions as may reasonably be requested by the Majority Investors to give effect to the agreements set forth in this Agreement. Without limiting the generality of the foregoing, each holder of Class B Common Shares and, subject to Section 2.4.4.1, each holder of Preferred Shares agrees to: (i) cast all votes to which such Shareholder may be or become entitled with respect to such Shares (under the CBCA or otherwise), whether at any annual or special meeting by written consent or otherwise, with respect to any merger, amalgamation, consolidation, sale of all or Substantially All assets, Public Offering or other matter (including any of the matters described in Section 2.4.1 or 4.3) in the same manner as Class A Common Shares are voted in connection with such matter and (ii) take such other actions as may reasonably be requested by the Majority Investors to cooperate in connection with and support any Approved Drag-Along Sale or other transaction that has received the requisite approvals of the Board or Shareholders as provided under this Agreement (without regard to any greater approval requirement that might otherwise apply under the CBCA or other applicable law). The Corporation will not give effect to any action by any holder of Shares or any other Person which is in contravention of this Agreement.

11.4. Agreement to Redeem Class A Preferred Shares Upon IPO. If all Class A Preferred Shares of the Corporation are not redeemed prior to the Initial Public Offering, the Corporation will exercise its rights under the articles of incorporation (as amended and in effect as of the Closing Date) to voluntarily redeem all such then outstanding Class A Preferred Shares promptly upon consummation of the Initial Public Offering to the extent that such redemption is permitted under the provisions of the financing agreements of the Corporation and its subsidiaries and by applicable law.

11.5. Authority; Effect. Each party hereto represents and warrants to and agrees with each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association. BRP shall be jointly and severally liable for all obligations of the Corporation pursuant to this Agreement.

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11.6. Notices. Any notices and other communications required or permitted in this Agreement shall be effective if in writing and (a) delivered personally, (b) sent by facsimile or email, or (c) sent (i) by internationally recognized courier service or (ii) by registered or certified mail, postage prepaid, in each case, addressed as follows:

If to the Corporation or BRP to it:

c/o Beaudier Inc.

1000 de La Gauchetière West

Suite 4310

Montréal, Québec H3B 4W5

Facsimile: (514)861-0032

E-mail: jacques.levesque@beaudier.com

Attention: Jacques Levesque

and to:

c/o Bain Capital Partners, LLC

111 Huntington Avenue

Boston, MA 02199

Facsimile: (617)516-2010

E-mail: mlevin@baincapital.com

Attention: Matthew S. Levin

and to:

c/o CDP Capital Amérique

Centre CDP Capital

1000, Place Jean-Paul Riopelle

Montréal, Qc, H2Z 2B3

Tel: (514) 847-2447

Facsimile: (514) 847-2493

Attention: Luc Houle & Robert Côté

E-mail: lhoule@cdpcapital.com& rcote@cdpcapital.com

If to a Bain Investor, to it at both:

33, rue Henri VII

L-1725 Luxembourg

Facsimile: 352 26 26 14 444

Attn: Theo J. Van Den Berghe, Manager

Frank Bergman, Manager

With a copy to:

Michael Siefke, Manager

c/o Bain Capital Munich

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Beteilgungsberatung GmbH

Maximilianstrasse 11

80539 Munich, Germany

Facsimile: 49 89 244 41 07 31

If to a Beaudier Group Investor, to it:

c/o Beaudier Inc.

1000 de la Gauchetiére St. West, suite 4310

Montréal, Qc, H3B 4W5

Facsimile (514) 861-0032

E-mail: jacques.levesque@,beaudier.com &

             louis.laporte@beaudier.com

Attention: Jacques Levesque & Louis Laporte

If to a Caisse Investor, to it:

c/o CDP Capital Amérique

Centre CDP Capital

1000, Place Jean-Paul Riopelle

Montréal, Qc, H2Z 2B3

Tel: (514) 847-2447

Facsimile: (514) 847-2493

Attention: Luc Houle & Robert Côté

E-mail: lhoule@cdpcapital.com& rcote@cdpcapital.com

In each case with a copy to each of:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Facsimile: 1-617-951-7050

E-mail: nstillwell@ropesgray.com

Attention: R. Newcomb Stillwell

Osier Hoskin & Harcourt LLP

1000 de la Gauchetière St. West, suite 2100

Montréal, Qc, H3B 4W5

Facsimile: 1-514-904-8101

E-mail: blevitt@osler.com

Attention: Brian Levitt

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Fasken Martineau DuMoulin LLP

Stock Exchange Tower

Suite 3400, P.O. Box 242

800 Place- Victoria

Montréal, Québec

Canada H4Z 1E9

Facsimile: (514)397-7600

E-mail: rpare@mtl.fasken.com & dpicotte@mtl.fasken.com

Attention: Robert Paré & Daniel Picotte

If to an Other Investor or a Manager, to him at the address set forth in the stock record book of the Corporation.

Notice to the holder of record of any Share shall be deemed to be notice to the holder of such Shares for all purposes hereof.

Unless otherwise specified herein, such notices or other communications shall be deemed effective (a) on the date received, if personally delivered, (b) on the date received if delivered by facsimile or email on a Business Day, or if not delivered on a Business Day, on the first Business Day thereafter, (b) two Business Days after being sent by internationally recognized courier service, and (c) three Business Days after deposit with the U.S. or Canadian postal service, if sent by registered or certified mail. Each of the parties hereto will be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

11.7. Binding Effect, Other Agreements, Etc. This Agreement constitutes the entire agreement of the parties and their respective Affiliates with respect to its subject matter, supersedes all prior or contemporaneous oral or written agreements or discussions with respect to such subject matter, and shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns. In the event of any conflict or inconsistency between the terms of this Agreement and the terms of the Family Holding Companies Agreement or the Corporation’s By-laws, the terms of this Agreement shall prevail.

11.8. Descriptive Headings. The descriptive headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and shall not be construed to define or limit any of the terms or provisions hereof.

11.9. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one instrument.

11.10. Severability. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof.

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12. GOVERNING LAW.

12.1. Governing Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed and interpreted by and construed in accordance with the substantive laws of the Province of Québec and the federal laws of Canada applicable in the Province of Québec, including the CBCA, without reference to or giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction. This Agreement will be treated in all respects as a Québec contract.

12.2. Consent to Jurisdiction. Each party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the courts sitting in the District of Montreal for the purpose of any action, claim, cause of action or suit (in contract, delict or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named court, that its property is exempt or immune from attachment or execution, that any such proceeding brought in the above-named court is improper, or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (c) hereby agrees not to commence or maintain any action, claim, cause of action or suit (in contract, delict or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof or thereof other than before the above-named court nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, delict or otherwise), inquiry, proceeding or investigation to any court other than the above-named court whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this agreement, the court in which such litigation is being heard shall be deemed to be included in clause (a) above. Notwithstanding the foregoing, any party to this Agreement may commence and maintain an action to enforce a judgment of the above-named court in any court of competent jurisdiction. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by the laws of Québec, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 11.2 hereof is reasonably calculated to give actual notice.

12.3. Exercise of Rights and Remedies. No delay or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

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Shareholders Agreement

IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) under seal as of the date first above written.

THE CORPORATION:	J.A. BOMBARDIER (J.A.B.) INC.
	By:	/s/ Illegible
		Name:
		Title:

BRP:	BOMBARDIER RECREATIONAL PRODUCTS INC.
	By:	/s/ Illegible
		Name:
		Title:

THE BAIN INVESTORS:	BAIN CAPITAL LUXEMBOURG INVESTMENTS S.A.R.L.
	By:
		Name:
		Title:

THE BEAUDIER GROUP INVESTORS:	BEAUDIER INC.
	By:	/s/ Illegible
		Name:
		Title:

By:	/s/ Illegible
	Name:
	Title:

/s/ Illegible

Shareholders Agreement

JADIER INTERNATIONAL INC.
By:	/s/ Illegible
	Name:
	Title:

GESTION J.I.C.A. INC.
By:	/s/ Illegible
	Name:
	Title:

FONDS ACHBÉE INC.
By:	/s/ Illegible
	Name:
	Title:
By:	/s/ Illegible
	Name:
	Title:

THE CAISSE INVESTORS:	CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
	By:	/s/ Illegile
		Name:
		Title:
	By:	/s/ Illegible
		Name:
		Title:

Shareholders Agreement

BOMBARDIER:	BOMBARDIER INC.
	By:
		Name:
		Title:
	By:
		Name:
		Title:

Schedule 1

Investor Share Holdings¹

Investor	(Number and Class)	Status
Bain Capital Luxembourg Investments S.ar.l.	152,299,950 Cl. A Common Shares	Bain Investor
Beaudier Inc.	63,965,979 Cl. A Common Shares	Beaudier Group
	6,415,000 Cl. B Common Shares	Investor
Jadier International Inc.	14,214,662 Cl. A Common Shares	Beaudier Group
	1,425,000 Cl. B Common Shares	Investor
Gestion J.I.C.A. Inc.	14,214,662 Cl. A Common Shares	Beaudier Group
	1,425,000 Cl. B Common Shares	Investor
Fonds Achbée Inc.	14,214,662 Cl. A Common Shares	Beaudier Group
	1,425,000 Cl. B Common Shares	Investor
Caisse de Dépôt et Placement du Québec	45,689,985 Cl. A Common Shares	Caisse Investor
Bombardier Inc.	50,000 Class A Pref. Shares	Bombardier
Others*	5,500,000 Cl. A or Cl. B Common Shares
Reserved for Management Option Plan	25,500,000 Cl. B Common Shares	Manager

* Managers purchasing Class B Common Shares within three months of the Closing and Investors purchasing Class A Common Shares, if any, pursuant to Section 3 of the Subscription Agreement.

¹ Subject to final sign-off.

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Schedule 2

Initial Members of the Board of Directors

	Name	“Class”	Resident Canadian?
			(yes or no)
1.	Joshua Bekenstein	Bain Designated Director	No
2.	Mark Nunnelly	Bain Designated Director	No
3.	Matthew Levin	Bain Designated Director	No
4.	Jordan Hitch	Bain Designated Director
5.	[To be named]	Bain Designated Director
6.	Laurent Beaudoin	Beaudier Designated Director	Yes
7.	Pierre Beaudoin	Beaudier Designated Director	Yes
8.	J.R. Andre Bombardier.	Beaudier Designated Director	Yes
9.	Luc Houle	Caisse Designated Director	Yes
10.	Pierre Michaud	Caisse Designated Director	Yes
11.		Independent Director
12.		Independent Director
13.		Independent Director

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Schedule 3

Criteria for Independence under Section 2.1.3.1

Each Investor will select for Initial Independent Nominees only individuals who are independent of management and the Investors and are free from any interest in and any business or other relationship with the Investors and their Affiliates (including, for such purposes, all Members of the Immediate Family of each such Affiliate) which could, or could reasonably be perceived to, materially interfere with the director’s ability to act with a view to the best interests of the Corporation and all the Shareholders.

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Exhibit A

FORM OF CONFIDENTIALITY AGREEMENT

[Date]

J.A. Bombardier (J.A.B.) Inc.,

[Address]

Bombardier Recreational Products Inc.

[Address]

[Investor]

[Address]

Attention of:

Dear Sir:

l (the “Company”) has requested information from J.A. Bombardier (J.A.B.) Inc., Bombardier Recreational Products Inc. (collectively “BRP”) and [Investor] (the “Investor”) in connection with the Company’s consideration of a possible acquisition of [BRP] [/ or /] [                     (the “Division”)], (the “Proposed Transaction”).

The purpose of this agreement (the “Agreement”) is to set out the provisions which are to apply with respect to any information (whether written or oral) that may be provided (whether on or after the date of this letter) by BRP, [the Investor] or the advisors (including the advisor to BRP,                      (collectively referred to herein as the “Advisors”)) to the Company or its agents, debt financing sources, directors, officers, advisors, auditors, representatives and employees (collectively known as, “Representatives”) in connection with the Proposed Transaction including, without limitation, all financial, technical and operational information, information about the business, products and services of [BRP] / [the Division], as well as all notes, analyses, compilations, studies or other associated documents (collectively “Confidential Information”).

Notwithstanding the foregoing, the Confidential Information does not include any information that:

(a) is generally available to the public at the time of disclosure;

(b) is or becomes publicly available, other than as a result of a breach of this Agreement by the Company or its Representatives;

(c) is or was received or becomes available from a third party source that is not known, by the Company, to be bound by a confidentiality agreement or other obligation of secrecy owed to BRP [or Investor] with respect to such information;

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(d) which is acquired or developed by the Company through its research and development efforts without violating the terms of this Agreement and without having had access directly or indirectly to the Confidential Information;

(e) is known by the Company prior to its disclosure; or

(f) is required by legal process or applicable law to be disclosed.

The Company agrees that the Confidential Information will be kept confidential and shall not, without the prior written consent of BRP, except as required by legal process or applicable law, be disclosed in any manner whatsoever, in whole or in part, and shall not be used other than in connection with the evaluation of the Proposed Transaction.

Without the prior written consent of the other party, each party will not, and will direct its Representatives not to disclose to any person either the fact that Confidential Information has been made available to the Company, that the Company is considering the Proposed Transaction or any other transaction involving BRP, or that discussions or negotiations are taking place or have taken place, concerning the Proposed Transaction between the parties or any terms, conditions or other facts with respect to the Proposed Transaction, including the status thereof.

Moreover, the Company agrees to allow access to the Confidential Information exclusively to those of its Representatives who have a reasonable need to know about and have access to the Confidential Information, for purpose of evaluating the Proposed Transaction, who are informed of the confidential nature of the information and who have agreed to abide by the terms of this Agreement. The Company shall be liable for any breach of this Agreement by its Representatives.

Except for the access permitted to Representatives by the immediately preceding paragraph, no Confidential Information may be disclosed to third parties, including but not limited to potential partners or potential investors, without prior written approval for such disclosure from BRP on a case by case basis.

If either [BRP / Investor] or the Company decides that it is not interested in proceeding with the Proposed Transaction with the other party, then, the Confidential Information, together with all copies or other reproductions in whole or in part thereof, will be returned to [BRP or Investor, as the case may be] promptly upon written, request or will be destroyed and written confirmation of said destruction will be delivered to [BRP or Investor, as the case may be]. That portion of that Confidential Information, which consists of analyses, compilations, studies, or other documents prepared by the Company or its Representatives, shall either be destroyed or held by the Company and kept confidential pursuant to the terms of this Agreement. Additionally, any oral Confidential Information will continue to be subject to the terms of this Agreement.

Each of BRP and [Investor] acknowledges that it may be necessary to make disclosures required by statute, regulation, securities commissions, or other regulatory authorities or bodies. In the event that the Company, or anyone to whom the Company transmits the Confidential Information pursuant to this Agreement, should become legally required or compelled to disclose any of the Confidential Information, the Company will promptly notify BRP so that BRP may, if the circumstances permit, seek, at its sole expense, a protective order or other appropriate

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remedy and/or waive compliance with the provisions of this Agreement. In the event that such protective order or other remedy either is not obtained or that compliance with the provisions of this Agreement is waived, only that portion of the Confidential Information which is legally required to be disclosed will be disclosed and the Company will exercise its reasonable efforts to obtain a protective order or other reliable assurance that confidential treatment will be accorded to the Confidential Information disclosed.

Except for any such communication that may occur in the ordinary course of business, not including any business as it relates to the Proposed Transaction, the Company agrees that, unless otherwise agreed to in writing by BRP, all communication with, inquiries of and/or requests for additional information from BRP or management; facility tours; or management meetings are to be coordinated through                      on behalf of BRP. Without the prior written consent of BRP or the Advisors, neither the Company nor any of its Representatives who are aware of the Confidential Information and/or the Proposed Transaction will initiate or cause to be initiated or maintain any communication with any officer, director, agent or employee of BRP concerning the Proposed Transaction except such officers or employees of BRP as may from time to time be identified to the Company by BRP or the Advisors.

The Company agrees that, except as provided below, it will not, within 2 years of the date of this Agreement, without obtaining the written consent of BRP, make any direct or indirect approach, normal vacancy and general advertising excepted, to the senior management or key employees of BRP [or the Division] with whom the Company has had contact or who became known to the Company in connection with its consideration of the Proposed Transaction with a view to offering employment or other incentives. The parties agree that the foregoing shall not apply to employees of BRP [or the Division] if a purchase and sale agreement (or similar agreement) is executed between the Company and BRP with respect to the Proposed Transaction.

The Company acknowledges that BRP may choose not to disclose information that is, in its sole discretion, deemed to be of a sensitive nature, unless and until an agreement is signed in connection with the Proposed Transaction.

BRP and the Investor (including the Advisors) make no representation or warranty as to the accuracy or completeness of the Confidential Information, although they have endeavoured to include information that they believes is relevant for the purpose of the Company’s evaluation. The Company agrees that BRP, the Investor and their affiliates and Advisors and their respective shareholders, directors, officers, employees and agents shall have no liability to the Company or any of the Company’s affiliates or Representatives resulting from the use of the Confidential Information by the Company. Only those representations and warranties that may be made to the Company in a definitive agreement for the Proposed Transaction, when, as, and if executed and subject to such limitations and restrictions as may be specified therein, shall have any legal effect, and the Company agrees that if the Company determines to enter into the Proposed Transaction, such determination will be based solely on the terms of such written agreement and on the Company’s own investigation, analysis, and assessment of the Proposed Transaction.

The Company agrees that it will be responsible for its own due diligence investigations and will be responsible for any and all costs, monetary or otherwise, incurred by the Company or its Representatives in connection with its due diligence investigations or other review of the

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Proposed Transaction, and that BRP, the Investor and their Advisors assume no responsibility for reimbursement or payment of any such costs.

It is further understood and agreed that money damages may not be a sufficient remedy for any breach of this Agreement and that BRP and the Investor may be entitled to seek specific performance and injunctive or other equitable relief for any breach by the Company without proof of actual damages, in addition to and not in substitution for any other remedy BRP or the Investor may have.

Nothing in this Agreement shall impose any obligation on BRP, the Investor or the Company to enter into any agreements with respect to the Proposed Transaction. The Company understands that BRP, the Investor (or the Advisors) will from time to time set out rules and procedures governing the process leading to the Proposed Transaction and that BRP and the Investor reserve the right, at any time, to change the process and/or terminate discussions with the Company or any or all prospective purchasers, to reject any or all proposals, to negotiate with one or more other prospective purchasers and to enter into a definitive written agreement for the sale of [the Division] [/or/] [BRP] without prior notice to the Company or any other prospective purchaser.

The Company agrees that, while in possession of material non-public information, it will abide by all securities laws governing the trading of securities of BRP.

This Agreement embodies the entire understanding between [BRP, the Investor] and the Company with respect to the Confidential Information and supersedes any prior agreements relating thereto. This Agreement may only be modified in writing by [BRP, the Investor] and the Company.

This Agreement may be executed in counterparts each of which shall be deemed to be an original and all of which shall constitute one and the same document. Each party shall be entitled to rely on delivery of a facsimile copy of this Agreement which shall create a legal, valid and binding Agreement between the Company, BRP and the Investor in accordance with the terms hereof.

The parties hereto have expressly requested that this Agreement, all documents incorporated by reference, any notices or other documents to be given under such Agreement, and other documents related thereto be drawn up in the English language. Les parties aux présentes ont expressément exigées que la présente convention et tous les documents qui y sont incorporés par renvoi, ainsi que tout avis donné en vertu de ladite convention ou tout autre document qui s‘y rapporte, soient rédigés en anglais.

The obligations contained in this Agreement and the provisions hereof shall survive the termination of any discussions or negotiations relating to the Proposed Transaction between the parties and the return to BRP or the Investor or destruction of the written Confidential Information. Notwithstanding the foregoing, this Agreement and all of the obligations hereunder shall terminate in their entirety 2 years from the date of this Agreement.

To the extent, if any, that they are not parties to this Agreement, each of J.A. Bombardier (J.A.B.) Inc., Bombardier Recreational Products Inc. and each “Investor” (as such term is defined in the Unanimous Shareholder Agreement dated as of December 18, 2003 among J.A. Bombardier (J.A.B.) Inc. and its shareholders) is a third party beneficiary of this agreement and will be entitled to enforce this agreement.

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This Agreement shall be governed and construed in accordance with laws of the Province of Quebec and the laws of Canada applicable therein.

If the Company agrees with the terms of this Agreement, please return a signed copy to BRP and the Investor.

Yours sincerely,

l

By:

Acknowledged and agreed as of                     , 200  .

J.A. Bombardier (J.A.B.) Inc.,

By:

Bombardier Recreational Products Inc.

By:

[Investor]

By:

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EX-10.17

EXHIBIT 10.17

Execution Copy

MANAGEMENT AGREEMENT

This Management Agreement (this “Agreement”) is entered into as of December 18, 2003 by and among J.A. Bombardier (J.A.B.) Inc., a corporation incorporated under the laws of Canada (“Holdings”), Bombardier Recreational Products Inc., a corporation incorporated under the laws of Canada (the “Company”), Beaudier Inc., a corporation incorporated under the laws of Canada (“Beaudier”), Bain Capital Partners, LLC, a Delaware limited liability company (“Bain Capital”) and Caisse de dépôt et placement du Québec (“CDP,” and together with Beaudier and Bain Capital the “Managers”).

RECITALS

WHEREAS, Holdings and the Company have been formed for the purpose of completing the acquisition of the recreational products business of Bombardier Inc. (the “Seller”) (the “Acquisition”), all on the terms and subject to the conditions of that certain Purchase Agreement dated as of December 2, 2003 by and between the Company and Seller (as the same may be amended from time to time, the “Acquisition Agreement”);

WHEREAS, the Managers are advising Holdings and the Company in connection with the structuring and negotiation of senior secured debt financing (the “Senior Financing”) being provided for the Acquisition pursuant to Credit Agreement dated as of December 18, 2003, among the Company, as a borrower, certain other subsidiaries of the Company or Holdings, as guarantors, and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets, UBS Securities LLC, Harris Nesbitt Corp., Bank of Montreal, and the other lenders party there to from time to time; and

WHEREAS, the Company and Holdings want to retain the Managers to provide certain management and advisory services to the Company and Holdings, and the Managers are willing to provide such services on the terms set forth below.

AGREEMENT

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Services. Each of the Managers hereby agrees that, during the term of this Agreement (the “Term”), it will provide the following consulting and management advisory services to the Company and Holdings as requested from time to time by the Boards of Directors of the Company and Holdings:

(a) financial, managerial and operational advice in connection with the day-to-day operations of the Company and its subsidiaries, including, without limitation,

advice with respect to the development and implementation of strategies for improving the operating, marketing and financial performance of the Company and its subsidiaries;

(b) advice in connection with the negotiation and consummation of agreements, contracts, documents and instruments necessary to provide the Company or Holdings or both with senior secured bank debt financing on terms and conditions satisfactory to the Company and Holdings; and

(c) such other services (which may include financial and strategic planning and analysis, consulting services, human resources and executive recruitment services and other services) as such Manager, the Company and Holdings may from time to time agree in writing.

Each of the Managers shall devote such time and efforts to the performance of services contemplated hereby as such Manager deems reasonably necessary or appropriate; provided, however, that no minimum number of hours is required to be devoted by Beaudier, Bain Capital or CDP on a weekly, monthly, annual or other basis. The Company and Holdings acknowledge that each of the Manager’s services are not exclusive to the Company and to Holdings and that each Manager will render similar services to other persons and entities. In providing services to the Company and Holdings, each Manager will act as an independent contractor and it is expressly understood and agreed that this Agreement is not intended to create, and does not create, any partnership, agency, joint venture or similar relationship and that no party has the right or ability to contract for or on behalf of any other party or to effect any transaction for the account of any other party. The parties hereto further recognize and agree that CDP will render services and provide advice hereunder in Canada only and, without limitation, shall have no activity hereunder in the United States of America.

2. Fees.

2.1. Upon the consummation of the closing under the Acquisition Agreement (the “Closing”), the Company will pay to the Managers in connection with the structuring of the Senior Financing for the Acquisition the following fees: (a) to Bain Capital or its designee Cdn. $11.1 million; (b) to Beaudier Cdn. $5.55 million; and (c) to CDP or its designee Cdn. $5.55 million.

2.2. The Company will also pay to the Managers hereunder periodic management fees in the aggregate amount of up to U.S. $2.25 million per year, as follows:

(a) The Company will pay a management fee of US $1.5 million per year to Bain Capital or its designee; provided, however, that such annual management fee will be reduced to US $1.0 million per year at such time as the Bain Investors (as defined in the Unanimous Shareholders Agreement among the Company, Holdings and Holdings’ shareholders dated as of December 18, 2003 (the “Unanimous Shareholders Agreement”)) hold Common Shares (as defined in the Unanimous

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Shareholders Agreement) in an amount less than fifty percent (50%) of amount of Common Shares held by the Bain Investors as of the Closing and shall be reduced to zero at such time as the Bain Investors hold Common Shares in an amount less than ten percent (10%) of the Common Shares held by the Bain Investors as of the Closing.

(b) The Company will pay a management fee of US $375,000 per year to Beaudier, provided, however, that such annual management fee will be reduced to US $250,000 per year at such time as the Beaudier Investors (as defined in the Unanimous Shareholders Agreement) hold Common Shares in an amount less than fifty percent (50%) of the Common Shares held by the Beaudier Investors as of the Closing and shall be reduced to zero at such time as the Beaudier Investors hold Common Shares in an amount less than ten percent (10%) of the Common Shares held by the Beaudier Investors as of the Closing.

(c) The Company will pay a management fee of US $375,000 per year to CDP or Beaudier as described in clauses (i) through (iii) of this Section 2.2(c); provided, however, that such annual management fee will be (x) reduced to US $250,000 per year at such time as the Caisse Investors (as defined in the Unanimous Shareholders Agreement) hold Common Shares in an amount less than fifty percent (50%) of the Common Shares held by the Caisse Investors as of the Closing (unless the Caisse Shares transferred by the Caisse Investor to bring their holdings below such 50% level (the ‘Tranche A Portion Shares”) have all been transferred to Beaudier Group Investors (as defined in the Unanimous Shareholders Agreement), in which event the amount of this management fee payable to CDP will be reduced to $250,000 and the remaining $125,000 of such fee will be payable to Beaudier as and to the extent provided in clause 2.2(c)(i) through (iii) below) and (y) reduced to zero at such time as the Caisse Investors hold Common Shares in an amount less than ten percent (10%) of the Common Shares held by the Caisse Investors as of the Closing (unless the Caisse Shares transferred by the Caisse Investor to bring their holdings below such 10% level (the “Tranche B Portion Shares”) have all been transferred to Beaudier Group Investors, in which event the amount of this management fee payable to CDP will be reduced to zero and the fee payable under this Section 2.2(c) will be payable to Beaudier as and to the extent provided in clause 2.2(c)(i) through (iii) below).

(i) As described above, the management fees payable under Section 2.2(c) shall be divided into two tranches. The first $125,000 of such fee shall be the first tranche (the “Tranche A Portion”) and such Tranche A Portion will be eliminated as described above in clause (x) of Section 2.2(c). The other $250,000 of such fee shall be the second tranche (the “Tranche B Portion”), and such Tranche B Portion will be eliminated as described above in clause (y) of Section 2.2(c).

(ii) From and after the date upon which the Caisse Investors hold less than 50% of the Common Shares held by Caisse Investors as of the Closing, the

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Tranche A Portion shall be paid to Beaudier; provided that if Beaudier Group Investors shall then have acquired and thereafter, from time to time, hold less than all the Tranche A Portion Shares, the amount payable to Beaudier shall be that proportion of the Tranche A Portion that (a) the Tranche A Portion Shares acquired and then held by Beaudier Group Investors is of (b) the total number of Tranche A Portion Shares.

(iii) From and after the date upon which the Caisse Investors hold less than 10% of the Common Shares held by Caisse Investors as of Closing, the Tranche B Portion shall be paid to Beaudier; provided that if Beaudier Group Investors shall then have acquired and thereafter, from time to time, hold less than all the Trance B Portion Shares, the amount payable to Beaudier shall be that proportion of the Tranche B Portion that (a) the Tranche B Portion Shares acquired and then held by Beaudier Group Investors is of (b) the total number of Tranche B Portion Shares.

(d) All management fees described in clauses (a), (b) and (c) of this Section 2.2 will be payable in quarterly installments and prorated for any partial periods of less than three months. Any reduction in fees that arises out of a disposition of Common Shares will take effect only as of the end of the quarter in which such disposition occurs. The first quarterly fee will be payable on the Closing Date, payable for the period ending on January 31, 2004. Thereafter, such quarterly fees will be payable in advance on the first business day in February, May, August and October, in each case for so long as such fees are payable under the terms of this Agreement.

(e) For purposes of this Section 2 (and the calculations or reductions or reallocations of fees as provided above), the total number Common Shares held by any Investor or Investor Group (as such terms are defined in the Shareholder Agreement) will be deemed to include any Common Shares acquired within three months of Closing pursuant to the Subscription Agreement dated on or about the date hereof (the “Subscription Agreement”) among the Corporation and the Managers or their affiliated investment funds (or, in the case of the Beaudier Group Investors, include shares acquired under the Subscription Agreement within such 3-month period by Beaudier or the Family Holding Companies (as defined in the Unanimous Shareholders Agreement)).

2.3. In each case for so long as it is receiving ongoing management fees pursuant to Section 2.2, each Manager will also advise Holdings and the Company in connection with financing, acquisition and disposition transactions (however structured) involving Holdings or any of its direct or indirect subsidiaries, and the Company will pay to the Managers (or their respective designees, as the case may be) a fee, subject to the approval of the Company’s Board of Directors, for services rendered in connection with each such transaction (other than an Initial Public Offering (as defined in the Unanimous Shareholders Agreement)) equal to up to one percent (1%) of the gross transaction value of such transaction, such fee to be due and payable at the closing of such transaction; and such fee to

-4-

be allocated among the Beaudier, Bain Capital or its designee and CDP, respectively, in the same proportions as the respective holdings of Common Shares, as of the date of such subsequent transaction, of the Beaudier Group Investors, the Bain Investors and the Caisse Investors (as such terms are defined in the Unanimous Shareholders Agreement).

2.4. Each payment made pursuant to this Section 2 shall be paid by wire transfer of immediately available federal funds to the accounts specified on Schedule 1 hereto, or to such other account(s) as the relevant Manager may specify to the Company in writing prior to such payment.

2.5. The Company and Holdings shall be liable for and shall pay any goods and services tax levied under the Excise Tax Act (Canada), Quebec sales tax levied under the Act respecting Quebec Sales Tax or any similar value added or sales taxes which are collectible by any of the Managers or required to be self-assessed by the Company or Holdings in connection with the supply of services made under this Agreement and the amount of payments made to the Managers pursuant to this Section 2 will not be reduced by any such taxes.

3. Term. This Agreement shall continue in full force and effect until January 31, 2014. The obligations of the Company under Section 2 above and Section 4(a) below with respect to fees earned or expenses incurred prior to such termination, and the provisions of Sections 4(b), 5, 6, 7 and 8 below shall all survive any termination of this Agreement to the maximum extent permitted under applicable law.

4. Expenses; Indemnification.

(a) Expenses. Each of the Company and Holdings will pay all expenses incurred prior to the Closing by the Managers as and to the extent provided in Section 7 of the Letter Agreement between the Managers dated July 21, 2003 and the letter agreement between the Managers dated November 17, 2003, each of which is hereby incorporated by reference in this Agreement. Each of the Company and Holdings will pay on demand all Reimbursable Expenses. As used herein, “Reimbursable Expenses” means (i) reasonable out-of-pocket travel expenses incurred from and after the Closing to attend meetings of the Board of Directors of Holdings or the Company (or any committee thereof) or for other travel specifically authorized and requested by the Board of Directors of Holdings or the Company or related directly to the performance of advisory duties under this Agreement and (ii) reasonable out-of-pocket legal expenses incurred by any Manager or its affiliates from and after the Closing in connection with the enforcement of rights or taking of actions under this Agreement, the Unanimous Shareholders Agreement or the Registration Rights Agreement; provided that the reimbursement of expenses incurred by the Managers or their affiliates in connection any registration of securities under the Registration Rights Agreement will be governed by (and subject to any limitations contained in) the applicable provisions of the Registration Rights Agreement and the reimbursement of expenses with respect to transactions pursuant

-5-

to Section 4.4.5 of the Unanimous Shareholders Agreement (Drag-Along Expenses) and Section 5.1.6 of the Unanimous Shareholders Agreement (Preemptive Right Expenses) will be governed by, and subject to any limitations contained in, the applicable provisions of the Unanimous Shareholders Agreement.

(b) Indemnity and Liability Each of the Company and Holdings hereby indemnifies and agrees to exonerate and hold each of the Managers, and each of their respective Affiliates (collectively, the “Indemnitees”) free and harmless from and against any and all actions, causes of action, suits, claims and liabilities and out-of-pocket expenses in connection therewith, including without limitation reasonable attorneys’ fees and charges (collectively, the “Indemnified Liabilities”), incurred by the Indemnitees or any of them as a result of, arising out of, or in any way relating to (i) this Agreement, the Acquisition or any related transactions (other than any such indemnified liabilities that arise out any breach of the Unanimous Shareholders Agreement, the Registration Rights Agreement, the Family Holding Companies’ Agreement (as defined in the Unanimous Shareholders Agreement) or Subscription Agreement by such Indemnitees or its Affiliates), (ii) the services provided by any of the Managers under this Agreement to the Company, Holdings or any of their subsidiaries from time to time or (iii) the investment in Holdings (including but not limited to any indemnification obligations assumed or incurred by any Indemnitee to or on behalf of the Seller, or any of its accountants or other representatives, agents or affiliates in connection with the Acquisition pursuant to any and all letter agreements between Ernst & Young LLP (“E&Y”), BRP, Caisse and Bain Capital pursuant to which E&Y grants PricewaterhouseCoopers LLP the right to access certain of its working papers, or the letter agreement dated November 11, 2003 between Merrill Lynch Capital Corporation, UBS Loan Finance LLC and other financial institutions and the Managers relating to the financing of the acquisition under the Acquisition Agreement), except for any such Indemnified Liabilities arising on account of (A) such Indemnitee’s gross negligence or willful misconduct, (B) any breach by such Indemnitee of its obligations under the Unanimous Shareholders Agreement, the Registration Rights Agreement, the Family Holding Companies’ Agreement (as defined in the Unanimous Shareholders Agreement) or Subscription Agreement or (C) any duties owed by such Indemnitee to its own Affiliates (other than Holdings and its subsidiaries). In addition, Beaudier and its Affiliates will not be entitled to indemnification hereunder with respect to any action, suits, claims and liabilities and out-of-pocket expenses to the extent arising out of or relating to the relationship of Beaudier or any of its Affiliates with (x) the Seller or any of its affiliates or (y) any duties owed by Beaudier or any or its Affiliates to the Family Holding Companies (as defined in the Unanimous Shareholders Agreement) or any of their respective affiliates. If and to the extent that the foregoing undertaking to indemnify may be unenforceable for any reason, the Company and Holdings hereby agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

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(c) For purposes of this Section 4 the term “Affiliate” means with respect to any Manager, (i) any other person or entity which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Manager and (ii) each partner, member, shareholder, officer, director, fiduciary or employee of such Manager or such person or entity; provided, however, that Affiliates of Beaudier shall not include the Seller or any affiliate of the Seller who would not, absent a direct or indirect investment by Beaudier or any of its affiliates in the Seller or such affiliate of the Seller, be an Affiliate of Beaudier.

5. Disclaimer and Limitation of Liability; Opportunities.

(a) Disclaimer; Standard of Care. None of the Managers makes any representations or warranties, express or implied, in respect of the services to be provided by them hereunder. None of the Indemnitees shall in any event be liable to the Company, Holdings or any of their Affiliates for any act taken or omission suffered by such Indemnitee that does not either (i) constitute gross negligence or willful misconduct as determined by a final, non-appealable determination of a court of competent jurisdiction or (ii) arise out of or relate to any breach by such Indemnitee of its obligations under the Unanimous Shareholders Agreement, the Registration Rights Agreement, the Family Holding Companies’ Agreement (as defined in the Unanimous Shareholders Agreement) or Subscription Agreement or out of any duties owed by such Indemnitee to its own Affiliates (other than Holdings and its subsidiaries)

(b) Freedom to Pursue Opportunities. In recognition that the Managers and their respective affiliates currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which they or their respective affiliates may serve as an advisor, a director or in some other capacity, and recognition that the Managers and their respective affiliates have myriad duties to various investors and partners, and in anticipation that the Company and Holdings, on the one hand and any Manager (or one or more affiliates, associated investment funds or portfolio companies), on the other hand, may engage in the same or similar activities or lines of business and have an interest in the same areas of corporate opportunities, and in recognition of the benefits to be derived by the Company and Holdings hereunder and in recognition of the difficulties which may confront any advisor who desires and endeavors fully to satisfy such advisor’s duties in determining the full scope of such duties in any particular situation, the provisions of this Section 5(b) are set forth to regulate, define and guide the conduct of certain affairs of the Company and Holdings as they may involve such Manager. Except as each Manager may otherwise agree in writing after the date hereof:

(i) Each Manager and its respective affiliates shall have the right: (A) to directly or indirectly engage in any business (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Holdings or Company), (B) to directly or

-7-

indirectly do business with any client or customer of Holdings or the Company, (C) to take any other action that such Manager believes in good faith is necessary to or appropriate to fulfill its obligations as described in the first sentence of this Section 5(b), and (D) not to present potential transactions, matters or business opportunities to Holdings, the Company, or any of their subsidiaries, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another person

(ii) Each Manager and its respective officers, employees, partners, members, other clients, affiliates and other associated entities shall have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company or Holdings or any of their affiliates or to refrain from any actions specified in Section 5(b)(i), and the Company and Holdings, on their own behalf and on behalf of their affiliates, hereby renounce and waive any right to require such Manager or any of its affiliates to act in a manner inconsistent with the provisions of this Section 5(b).

(iii) Neither the Managers, nor any Affiliate of such Managers shall be liable to the Company, Holdings or any of their affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 5(b) or of any such person’s participation therein.

(iv) Bain Capital will ensure that none of the directors designated by affiliates of Bain Capital pursuant to Section 2.1.1 of the Shareholders Agreement will be individuals who serve as directors of any entity that has, on a consolidated basis together with its controlled subsidiaries, revenues for the most recent fiscal year ending prior to the time of such designation attributable to Competing Activities (as defined in the Shareholders Agreement) in excess of three hundred seventy-five million dollars ($375,000,000).

6. Assignment, etc. Except as provided below, none of the parties hereto shall have the right to assign this Agreement without the prior written consent of each of the other parties. Notwithstanding the foregoing, any Manager may assign all or part of its rights and obligations hereunder to any of their respective affiliates which provides services similar to those called for by this Agreement, in which event such Manager shall not be released of all of its rights and obligations hereunder.

7. Amendments and Waivers. No amendment or waiver of any term, provision or condition of this Agreement shall be effective, unless in writing and executed by each of the Managers, Holdings and the Company. No waiver on any one occasion shall extend to or effect or be construed as a waiver of any right or remedy on any future occasion. No course of dealing of any person nor any delay or omission in exercising any right or remedy shall constitute an amendment of this Agreement or a waiver of any right or remedy of any party hereto.

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8. Miscellaneous.

(a) Choice of Law. This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed and interpreted by and construed in accordance with the substantive laws of the Province of Quebec and the federal laws of Canada applicable in the Province of Quebec, including the CBCA, without reference to or giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction. This Agreement will be treated in all respects as a Quebec contract.

(b) Consent to Jurisdiction. Each party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the Superior Court of Quebec sitting in the District of Montreal for the purpose of any action, claim, cause of action or suit (in contract, delict or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named court, that its property is exempt or immune from attachment or execution, that any such proceeding brought in the above-named court is improper, or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (c) hereby agrees not to commence or maintain any action, claim, cause of action or suit (in contract, delict or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof or thereof other than before the above-named court nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, delict or otherwise), inquiry, proceeding or investigation to any court other than the above-named court whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this agreement, the court in which such litigation is being heard shall be deemed to be included in clause (a) above. Notwithstanding the foregoing, any party to this Agreement may commence and maintain an action to enforce a judgment of the above-named court in any court of competent jurisdiction. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by the laws of Quebec, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 10 hereof is reasonably calculated to give actual notice.

(c) Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior communication or agreement with respect thereto.

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(d) Notice. All notices, demands, and communications required or permitted under this Agreement shall be in writing and shall effective if be served upon such other party and such other party’s copied persons as specified below to the address set forth for it below (or to such other address as such party shall have specified by notice to each other party) if (i) delivered personally, (ii) sent and received by facsimile or email or (iii) sent by certified or registered mail or by Federal Express, DHL, UPS or any other comparably reputable overnight courier service, postage prepaid, to the appropriate address as follows:

If to the Company or Holdings, to them at:

c/o Beaudier Inc.

1000 de La Gauchetière West

Suite 4310

Montréal, Québec H3B 4W5

Facsimile: (514) 861-0032

E-mail: jacques.levesque@beaudier.com

Attention: Jacques Levesque

and to:

c/o Bain Capital Partners, LLC

111 Huntington Avenue

Boston, MA 02199

Facsimile: (617) 516-2010

E-mail: mlevin@baincapital.com

Attention: Matthew S. Levin

and to :

c/o CDP Capital Amérique

Centre CDP Capital

1000, Place Jean-Paul Riopelle

Montréal, Qc, H2Z 2B3

Tel: (514) 847-2447

Facsimile: (514) 847-2493

Attention: Luc Houle & Robert Côté

E-mail: lhoule@cdpcapital.com& rcote@cdpcapital.com

with a copy to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Tel: 617-951-7000

-10-

Fax: 617-951-7050

Attn: R. Newcomb Stillwell

Email: nstillwell@ropesgray.com

and to:

Osler, Hoskin & Harcourt LLP

1000 de La Gauchetière Street West

Suite 2100

Montréal, Québec H3B 4W5

Tel: (514) 904-8100

Fax: (514) 904-8101

Attn: Brian Levitt

Email: blevitt@osler.com

and to:

Fasken Martineau DuMoulin LLP

Stock Exchange Tower

Suite 3400, P.O. Box 242

800 Place Victoria

Montréal, Québec

H4Z 1E9

Facsimile: (514) 397-7600

E-mail: rpare@mtl.fasken.com& dpicotte@mtl.fasken.com

Attention: Robert Paré & Daniel Picotte

If to Beaudier, to it at:

Beaudier Inc.

1000 de La Gauchetière Street West

Suite 4310

Montreal, QC H3B 4W5

Tel: (514) 861-3456

Fax: (514) 861-0032

Attn: Jacques Levesque

Email: jacques.levesque@beaudier.com

If to Bain Capital, to it at:

c/o Bain Capital LLC

111 Huntington Avenue

Boston, Massachusetts 02199

Tel: 617-516-2000

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Fax: 617-516-2010

Attn: Joshua Bekenstein

Email: jbekenstein@baincapital.com

If to CDP, to it at:

c/o CDP Capital Amérique

Centre CDP Capital

1000, Place Jean-Paul Riopelle

Montréal, Qc, H2Z 2B3

Tel: (514) 847-2447

Facsimile: (514) 847-2493

Attention: Luc Houle & Robert Côté

E-mail: lhoule@cdpcapital.com& rcote@cdpcapital.com

A copy of any notices to Beaudier, Bain Capital or CDP shall be directed to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Tel:  617-951-7000

Fax: 617-951-7050

Attn: R. Newcomb Stillwell

Email: nstillwell@ropesgray.com

and to:

Osler, Hoskin & Harcourt LLP

1000 de La Gauchetière Street West

Suite 2100

Montréal, Québec H3B 4W5

Tel:  (514) 904-8100

Fax: (514) 904-8101

Attn: Brian Levitt

Email: blevitt@osler.com

and to:

Fasken Martineau DuMoulin LLP

Stock Exchange Tower

Suite 3400, P.O. Box 242

800 Place Victoria

Montréal, Québec

H4Z 1E9

Facsimile: (514) 397-7600

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E-mail: rpare@mtl.fasken.com & dpicotte@mtl.fasken.com

Attention: Robert Paré & Daniel Picotte

Unless otherwise specified herein, such notices or other communications shall be deemed effective, (a) on the date received, if personally delivered or sent by facsimile during normal business hours, (b) on the business day after being received if sent by facsimile other than during normal business hours, (c) one business day after being sent by Federal Express, DHL or UPS or other comparably reputable delivery service and (c) five business days after being sent by registered or certified mail. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

(e) Severability. If in any proceedings a court shall refuse to enforce any provision of this Agreement, then such unenforceable provision shall be deemed eliminated from this Agreement for the purpose of such proceedings to the extent necessary to permit the remaining provisions to be enforced. To the full extent, however, that the provisions of any applicable law may be waived, they are hereby waived to the end that this Agreement be deemed to be valid and binding agreement enforceable in accordance with its terms, and in the event that any provision hereof shall be found to be invalid or unenforceable, such provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent consistent with and possible under applicable law.

(f) Counterparts. This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement.

[Remainder of Page Intentionally Left Blank]

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Management Agreement

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf as an instrument under seal as of the date first above written by its officer or representative thereunto duly authorized.

HOLDINGS:	J.A. BOMARDIER (J.A.B.) INC.
	By:	Illegible
		Name:
		Title:
THE COMPANY:	BOMBARDIER RECREATIONAL PRODUCTS INC.
	By:	Illegible
		Name:
		Title:

Management Agreement

BEAUDIER:	BEAUDIER INC.
	By:	Illegible
		Name:
		Title:
	By:	Illegible
		Name:
		Title:
BAIN CAPITAL:	BAIN CAPITAL PARTNERS, LLC
	By:	Bain Capital LLC, its sole member
	By:	Illegible
		Name:
		Title:
CDP:	CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
	By:	Illegible
		Name:
		Title:
	By:	Illegible
		Name:
		Title:

Management Agreement

BEAUDIER:	BEAUDIER INC.
	By:
		Name:
		Title:
	By:
		Name:
		Title:
BAIN CAPITAL:	BAIN CAPITAL PARTNERS, LLC
	By:	Bain Capital LLC, its sole member
	By:	/s/ Illegible
		Name:
		Title:
CDP:	CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
	By:	/s/ Illegible
		Name:
		Title:
	By:	/s/ Illegible
		Name:
		Title:

Schedule 1 to

Management Agreement

Wire Transfer Instructions for

[Beaudier]

	Banque Nationale du Canada
	Gestion Privée
	600, rue de La Gauchetiére Ouest
Bank:	Montréal (Québec) H3B 4W5
ABA #:	ABA026009797
Acct #:	00-054-62
Transit	0008-1
Beneficiary	Beaudier inc.

Wire Transfer Instructions for

[Bain Capital]

Bank:	Citibank, NA-New York
ABA #:	021-000-089
	Brown Brothers Harriman-
For:	Boston
Acct #:	09250276
To Further Credit:
Name:	Bain Capital Partners, LLC
Acct #:	612541-3

Wire Transfer Instructions for

[CDP]

Bank:	Bank of New York. New York, USA
Swift	IRVTUS3N
ABA #:	ABA 021-000-018
Acct #:	890-0470-690
Account Name:	Account Caisse Centrale Desjardins du Québec, Montréal
Reference:	CDPQ
Swift Beneficiary	CCDQCAMMIMM

EX-12.1

Exhibit 12.1

Computation of ratio of earnings to fixed charges

	Predecessor											Successor
	Fiscal Year Ended January 31,									For the Period February 1, 2003 to December 18,		For the Period December 19, 2003 to January 31,			Combined Twelve Months Ended January 31,		Pro Forma Twelve Months Ended January 31,			Three Months Ended April 30,			Pro Forma Three Months Ended April 30,
	2000		2001		2002			2003		2003		2004			2004		2004			2004			2003
	($ in millions, except ratios)
Ratio of earnings to fixed charges
Income (loss) before income taxes	$	33.6	$	109.1	$	90.3		$	164.9	$	45.5	$	(23.4	)	$	22.1	$	(12.3	)	$	(46.5	)	$	(44.7	)
Add Fixed charges		9.6		6.2		12.1			14.0		11.9		7.5			19.4		59.8			15.2			15.2
Total earnings (loss)	$	43.2	$	115.3	$	102.4		$	178.9	$	57.4	$	(15.9	)		41.5	$	47.5			(31.3	)		(29.5	)
Fixed charges
Interest expense	$	4.8	$	2.1	$	5.9		$	7.4	$	6.1	$	5.6		$	11.7	$	43.4		$	11.4		$	11.4
Accretion in carrying value of redeemable preferred shares		—		—		—			—		—		0.5			0.5		4.0			1.0			1.0
Interest expense on operating leases		4.8		4.1		6.2			6.6		5.8		0.6			6.4		6.4			1.2			1.2
Amortization of financing costs		—		—		—			—		—		0.8			0.8		6.0			1.6			1.6
Total fixed charges	$	9.6	$	6.2	$	12.1		$	14.0	$	11.9	$	7.5		$	19.4	$	59.8		$	15.2		$	15.2
Ratio(a)		4.5x		18.6x		8.5x			12.8x		4.8x		—			2.1x		—			—			—
Ratio of earnings to fixed charges (US GAAP)
Earnings
Income (loss) before income taxes (Canadian GAAP)					$	90.3		$	164.9	$	45.5	$	(23.4	)	$	22.1	$	(12.3	)	$	(46.5	)	$	(44.7	)
US GAAP adjustments before income taxes						(19.4	)		26.3		10.9		(8.5	)		2.4		2.4			2.1			2.1
US GAAP income (loss) before income taxes						70.9			191.2		56.4		(31.9	)		24.5		(9.9	)		(44.4	)		(42.6	)
Fixed charges						12.1			14.0		11.8		7.0			18.8		55.7			14.2			14.2
Total earnings (loss)					$	83.0		$	205.2	$	68.2	$	(24.9	)	$	43.3	$	45.8		$	(30.2	)	$	(28.4	)
Fixed charges
Interest expense					$	6.0		$	7.7	$	6.3	$	5.6		$	11.9	$	43.6		$	11.4		$	11.4
Interest expense on operating leases						6.1			6.3		5.5		0.6			6.1		6.1			1.2			1.2
Amortization of financing costs						—			—		—		0.8			0.8		6.0			1.6			1.6
Fixed charges					$	12.1		$	14.0	$	11.8	$	7.0		$	18.8	$	55.7		$	14.2		$	14.2
Ratio(a)						6.9x			14.7x		5.8x		—			2.3x		—			—			—

(a) For purposes of calculating the ratio of earnings to fixed charges, earnings represent income (loss) before income tax expense plus fixed charges. Fixed charges consist of total interest expense, amortization of deferred financing costs, accretion in carrying value of preferred shares and a one-third portion of operating lease expenses that management believes is representative of the interest component of rent pursuant to our operating leases. For U.S. GAAP purposes, the accretion in carrying value of redeemable preferred shares in the amount of $0.5 million, for the period from December 19, 2003 to January 31, 2004 and $1.0 million for the three-month period ended April 30, 2004 and pro forma three-month period ended April 30, 2004, are not included in fixed charges. The ratio (under Canadian GAAP) was not presented for the period of December 19, 2003 to January 31, 2004 and pro forma twelve months ended January 31, 2004 as earnings were insufficient to cover fixed charges by $23.4 million and $12.3 million, respectively. The ratio (under Canadian GAAP) was not presented for the three-month period ended April 30, 2004 and pro forma three-month period ended April 30, 2004 as earnings were insufficient to cover fixed charges by $16.5 million and $44.7 million, respectively. The ratio (under U.S. GAAP) was not presented for the period of December 19, 2003 to January 31, 2004 and pro forma twelve months ended January 31, 2004, as earnings were insufficient to cover fixed charges by $31.9 million and $9.9 million, respectively. The ratio (under US GAAP) was not presented for the three month period ended April 30, 2004 and pro forma three-month period ended April 30, 2004 as earnings were insufficient to cover fixed charges by $44.4 million and $42.6 million, respectively. The ratio for the pro forma twelve months ended January 31, 2004 is a supplemental pro forma ratio to give effect to the Transactions as reflected in the Unaudited Pro Forma Consolidated Statement of Income included elsewhere in this prospectus.

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions “Summary Historical and Pro Forma Consolidated Financial Data”, “Selected Historical Consolidated Financial Data” and “Independent Auditors” in the Registration Statement (Amendment No. 1 to Form F-4) and related Prospectus of Bombardier Recreational Products Inc. for the registration of U.S. $200,000,000 8 3/8% Senior Subordinated Notes due 2013 and to the inclusion therein of our reports dated May 21, 2004, with respect to the consolidated financial statements of Bombardier Recreational Products Inc. for the 44-day period ended January 31, 2004, and with respect to the financial statements of Bombardier Recreational Products (a reportable segment of Bombardier Inc.) for the 321-day period ended December 18, 2003 and the years ended January 31, 2003 and 2002, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Chartered Accountants

Montreal, Canada

September 3, 2004

EX-99.1

LETTER OF TRANSMITTAL

for

Offer to Exchange All Outstanding

8 ³/8% Senior Subordinated Notes due 2013

for

8 ³/8% Senior Subordinated Notes due 2013

which have been registered under the Securities Act of 1933

of

Bombardier Recreational Products Inc.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                         , 2004 (THE “EXPIRATION DATE”) UNLESS EXTENDED.

The Exchange Agent is:

U.S. BANK NATIONAL ASSOCIATION

By Mail, Hand or Overnight Delivery: U.S. Bank National Association 60 Livingston Avenue St. Paul, Minnesota 55107 Attn: Specialized Finance By Facsimile: (651) 495-8158 For Information or Confirmation by Telephone: (800) 934-6802

Delivery of this Letter of Transmittal to an address other than as set forth above or transmission via a facsimile transmission to a number other than as set forth above will not constitute a valid delivery.

The undersigned acknowledges receipt of the Prospectus dated                 , 2004 (the “Prospectus”) of Bombardier Recreational Products Inc. (the “Issuer”), and this Letter of Transmittal (the “Letter of Transmittal”), which together describe the Issuer’s offer (the “Exchange Offer”) to exchange their 8 ³/8% Senior Subordinated Notes due 2013 which have been registered under the Securities Act of 1933, as amended (the “Securities Act”) (the “Exchange Notes”) for their outstanding 8 ³/8% Senior Subordinated Notes due 2013 (the “Outstanding Notes” and, together with the Exchange Notes, the “Notes”) from the holders thereof.

Holders (as defined herein) who wish to be eligible to receive Exchange Notes (as defined herein) for their Outstanding Notes (as defined herein) pursuant to the Exchange Offer must validly tender (and not withdraw) their Outstanding Notes to the Exchange Agent prior to the Expiration Date.

The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus).

Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus.

YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.

The undersigned has checked the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

PLEASE READ THE ENTIRE

LETTER OF TRANSMITTAL AND THE PROSPECTUS

CAREFULLY BEFORE CHECKING ANY BOX BELOW.

List below the Outstanding Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and aggregate principal amounts should be listed on a separate signed schedule affixed hereto.

DESCRIPTION OF OUTSTANDING NOTES TENDERED HEREWITH
Name(s) and Address(es) of Registered Holder(s) (Please fill in)	Certificate Number(s)*	Aggregate Principal Amount Represented by Outstanding Notes*	Principal Amount Tendered**
Total:
*  Need not be completed by book-entry holders. **  Unless otherwise indicated, the holder will be deemed to have tendered the full aggregate principal amount represented by such Outstanding Notes. See instruction 2.

Holders of Outstanding Notes whose Outstanding Notes are not immediately available or who cannot deliver all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus.

Unless the context otherwise requires, the term “holder” for purposes of this Letter of Transmittal means any person in whose name Outstanding Notes are registered or any other person who has obtained a properly completed bond power from the registered holder or any person whose Outstanding Notes are held of record by The Depository Trust Company (“DTC”).

¨ CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:

Name of Registered Holder(s):                                                                                                                                                       

Name of Eligible Guarantor Institution that Guaranteed Delivery:                                                                                    

Date of Execution of Notice of Guaranteed Delivery:                                                                                                            

If Delivered by Book-Entry Transfer:                                                                                                                                           

Name of Tendering Institution:                                                                                                                                                       

Account Number:                                                                                                                                                                                 

Transaction Code Number:                                                                                                                                                               

¨ CHECK HERE IF EXCHANGE NOTES ARE TO BE DELIVERED TO PERSON OTHER THAN PERSON SIGNING THIS LETTER OF TRANSMITTAL:

Name:                                                                                                                                                                                                       

Address:                                                                                                                                                                                                  

¨ CHECK HERE IF EXCHANGE NOTES ARE TO BE DELIVERED TO ADDRESS DIFFERENT FROM THAT LISTED ELSEWHERE IN THIS LETTER OF TRANSMITTAL:

Name:                                                                                                                                                                                                       

Address:                                                                                                                                                                                                  

¨ CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED OUTSTANDING NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:                                                                                                                                                                                                       

Address:                                                                                                                                                                                                  

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may not participate in the Exchange Offer with respect to Outstanding Notes acquired other than as a result of market-making activities or other trading activities. Any holder who is an “affiliate” of the Issuer or who has an arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, or any broker-dealer who purchased Outstanding Notes from the Issuer to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act.

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Issuer the principal amount of the Outstanding Notes indicated above. Subject to, and effective upon, the acceptance for exchange of all or any portion of the Outstanding Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Issuer all right, title and interest in and to such Outstanding Notes as are being tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Issuer, in connection with the Exchange Offer) to cause the Outstanding Notes to be assigned, transferred and exchanged.

The undersigned represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Outstanding Notes and to acquire Exchange Notes issuable upon the exchange of such tendered Outstanding Notes, and that, when the same are accepted for exchange, the Issuer will acquire good and unencumbered title to the tendered Outstanding Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Issuer to be necessary or desirable to complete the exchange, assignment and transfer of the tendered Outstanding Notes or transfer ownership of such Outstanding Notes on the account books maintained by the book-entry transfer facility. The undersigned further agrees that acceptance of any and all validly tendered Outstanding Notes by the Issuer and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Issuer of its obligations under the Registration Rights Agreement dated December 18, 2003, among Bombardier Recreational Products Inc., the Guarantor named therein and the initial purchasers referred to therein (the “Registration Rights Agreement”), and that the Issuer shall have no further obligations or liabilities thereunder. The undersigned will comply with its obligations under the Registration Rights Agreement.

The undersigned understands that tenders of Outstanding Notes pursuant to any one of the procedures described in the Prospectus and in the instructions attached hereto will, upon the Issuer’s acceptance for exchange of such tendered Outstanding Notes, constitute a binding agreement between the undersigned and the Issuer upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under circumstances set forth in the Prospectus, the Issuer may not be required to accept for exchange any of the Outstanding Notes.

By tendering Outstanding Notes and executing this Letter of Transmittal, the undersigned represents that Exchange Notes acquired in the exchange will be obtained in the ordinary course of business of the undersigned, that the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such Exchange Notes, that the undersigned is not an “affiliate” of the Issuer within the meaning of Rule 405 under the Securities Act and that if the undersigned or the person receiving such Exchange Notes, whether or not such person is the undersigned, is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned or the person receiving such Exchange Notes, whether or not such person is the undersigned, is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The SEC has taken the position that such broker-dealers may fulfill their prospectus delivery requirements with respect to the Exchange Notes (other than a resale of Exchange Notes received in exchange for an unsold

allotment from the original sale of the Outstanding Notes) with the Prospectus. The Prospectus, as it may be amended or supplemented from time to time, may be used by certain broker-dealers (as specified in the Registration Rights Agreement referenced in the Prospectus) (“Participating Broker-Dealers”) for a period of time, starting on the Expiration Date and ending on the close of business 90 days after the Expiration Date in connection with the sale or transfer of such Exchange Notes. The Issuer has agreed that, for such period of time, it will make the Prospectus (as it may be amended or supplemented) available to such a broker-dealer which elects to exchange Outstanding Notes, acquired for its own account as a result of market making or other trading activities, for Exchange Notes pursuant to the Exchange Offer for use in connection with any resale of such Exchange Notes. By accepting the Exchange Offer, each broker-dealer that receives Exchange Notes pursuant to the Exchange Offer acknowledges and agrees to notify the Issuer prior to using the Prospectus in connection with the sale or transfer of Exchange Notes and that, upon receipt of notice from the Issuer of the happening of any event which makes any statement in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein (in light of the circumstances under which they were made) not misleading, such broker-dealer will suspend use of the Prospectus until (i) the Issuer has amended or supplemented the Prospectus to correct such misstatement or omission and (ii) either the Issuer has furnished copies of the amended or supplemented Prospectus to such broker-dealer or, if the Issuer has not otherwise agreed to furnish such copies and declines to do so after such broker-dealer so requests, such broker-dealer has obtained a copy of such amended or supplemented Prospectus as filed with the SEC. Except as described above, the Prospectus may not be used for or in connection with an offer to resell, a resale or any other retransfer of Exchange Notes. A broker-dealer that acquired Outstanding Notes in a transaction other than as part of its market-making activities or other trading activities will not be able to participate in the Exchange Offer.

Any holder of Outstanding Notes using the Exchange Offer to participate in a distribution of the Exchange Notes (i) cannot rely on the position of the staff of the Securities and Exchange Commission enunciated in its interpretive letter with respect to Exxon Capital Holdings Corporation (available April 13, 1989) or similar interpretive letters and (ii) must comply with the registration and prospectus requirements of the Securities Act in connection with a secondary resale transaction.

All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tendered Outstanding Notes may be withdrawn at any time prior to the Expiration Date in accordance with the terms of this Letter of Transmittal. Except as stated in the Prospectus, this tender is irrevocable.

Certificates for all Exchange Notes delivered in exchange for tendered Outstanding Notes and any Outstanding Notes delivered herewith but not exchanged, and registered in the name of the undersigned, shall be delivered to the undersigned at the address shown below the signature of the undersigned.

The undersigned, by completing the box entitled “Description of Outstanding Notes Tendered Herewith” above and signing this letter, will be deemed to have tendered the Outstanding Notes as set forth in such box.

TENDERING HOLDER(S) SIGN HERE

(Complete accompanying substitute Form W-9)

Must be signed by registered holder(s) exactly as name(s) appear(s) on certificate(s) for Outstanding Notes hereby tendered or in whose name Outstanding Notes are registered on the books of DTC or one of its participants, or by any person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth the full title of such person. See Instruction 3.

(Signature(s) of Holder(s))

Date                                                                                                                                                                                                       

Name(s)                                                                                                                                                                                               

(Please Print)

Capacity (full title)                                                                                                                                                                           

Address                                                                                                                                                                                                

(Including Zip Code)

Daytime Area Code and Telephone No.                                                                                                                                   

Taxpayer Identification No.                                                                                                                                                         

GUARANTEE OF SIGNATURE(S)

(If Required — See Instruction 3)

Authorized Signature                                                                                                                                                                       

Dated                                                                                                                                                                                                    

Name                                                                                                                                                                                                    

Title                                                                                                                                                                                                       

Name of Firm                                                                                                                                                                                     

Address of Firm                                                                                                                                                                                

(Include Zip Code)

Area Code and Telephone No.                                                                                                                                                     

6

SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4) To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are to be issued in the name of someone other than the registered holder of the Outstanding Notes whose name(s) appear(s) above. Issue:   ¨  Outstanding Notes not tendered to: ¨  Exchange Notes to: Name(s)                                                                                     Address:                                                                                     (Include Zip Code) Daytime Area Code and
Telephone No.                                                                        Tax Identification No. SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4) To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are to be sent to someone other than the registered holder of the Outstanding Notes whose name(s) appear(s) above, or such registered holder(s) at an address other than that shown above. Mail:    ¨  Outstanding Notes not tendered to: ¨  Exchange Notes to: Name(s)                                                                                     Address:                                                                                     (Include Zip Code) Area   Code and
Telephone No.                                                                        Tax Identification No.

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1. Delivery of this Letter of Transmittal and Certificates; Guaranteed Delivery Procedures.

A holder of Outstanding Notes may tender the same by (i) properly completing and signing this Letter of Transmittal or a facsimile hereof (all references in the Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates, if applicable, representing the Outstanding Notes being tendered and any required signature guarantees and any other documents required by this Letter of Transmittal, to the Exchange Agent at its address set forth above on or prior to the Expiration Date, or (ii) complying with the procedure for book-entry transfer described below, or (iii) complying with the guaranteed delivery procedures described below.

Holders of Outstanding Notes may tender Outstanding Notes by book-entry transfer by crediting the Outstanding Notes to the Exchange Agent’s account at DTC in accordance with DTC’s Automated Tender Offer Program (“ATOP”) and by complying with applicable ATOP procedures with respect to the Exchange Offer. DTC participants that are accepting the Exchange Offer should transmit their acceptance to DTC, which will edit and verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send a computer-generated message (an “Agent’s Message”) to the Exchange Agent for its acceptance in which the holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal or the DTC participant confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. Delivery of the Agent’s Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. DTC participants may also accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through ATOP.

The method of delivery of this Letter of Transmittal, the Outstanding Notes and any other required documents is at the election and risk of the holder, and except as otherwise provided below, the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If such delivery is by mail, it is suggested that registered mail with return receipt requested, properly insured, be used. In all cases sufficient time should be allowed to permit timely delivery. No Outstanding Notes or Letters of Transmittal should be sent to the Issuer.

Holders whose Outstanding Notes are not immediately available or who cannot deliver their Outstanding Notes and all other required documents to the Exchange Agent on or prior to the Expiration Date or comply with book-entry transfer procedures on a timely basis must tender their Outstanding Notes pursuant to the guaranteed delivery procedure set forth in the Prospectus. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Guarantor Institution (as defined below); (ii) prior to the Expiration Date, the Exchange Agent must have received from such Eligible Guarantor Institution a letter, telegram or facsimile transmission (receipt confirmed by telephone and an original delivered by guaranteed overnight courier) setting forth the name and address of the tendering holder, the names in which such Outstanding Notes are registered, and, if applicable, the certificate numbers of the Outstanding Notes to be tendered; and (iii) all tendered Outstanding Notes (or a confirmation of any book-entry transfer of such Outstanding Notes into the Exchange Agent’s account at a book-entry transfer facility) as well as this Letter of Transmittal and all other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three NYSE trading days after the date of execution of such letter, telegram or facsimile transmission, all as provided in the Prospectus.

No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Outstanding Notes for exchange.

2. Partial Tenders; Withdrawals.

If less than the entire principal amount of Outstanding Notes evidenced by a submitted certificate is tendered, the tendering holder must fill in the aggregate principal amount of Outstanding Notes tendered in the box entitled “Description of Outstanding Notes Tendered Herewith.” A newly issued certificate for the Outstanding Notes submitted but not tendered will be sent to such holder as soon as practicable after the Expiration Date. All Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise clearly indicated.

If not yet accepted, a tender pursuant to the Exchange Offer may be withdrawn prior to the Expiration Date.

To be effective with respect to the tender of Outstanding Notes, a written notice of withdrawal must: (i) be received by the Exchange Agent at the address for the Exchange Agent set forth above before the Issuer notify the Exchange Agent that they have accepted the tender of Outstanding Notes pursuant to the Exchange Offer; (ii) specify the name of the person who tendered the Outstanding Notes to be withdrawn; (iii) identify the Outstanding Notes to be withdrawn (including the principal amount of such Outstanding Notes, or, if applicable, the certificate numbers shown on the particular certificates evidencing such Outstanding Notes and the principal amount of Outstanding Notes represented by such certificates); (iv) include a statement that such holder is withdrawing its election to have such Outstanding Notes exchanged; and (v) be signed by the holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantee). The Exchange Agent will return the properly withdrawn Outstanding Notes promptly following receipt of notice of withdrawal. If Outstanding Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Outstanding Notes or otherwise comply with the book-entry transfer facility’s procedures. All questions as to the validity of notices of withdrawals, including time of receipt, will be determined by the Issuer, and such determination will be final and binding on all parties.

Any Outstanding Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Outstanding Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent’s account at the book entry transfer facility pursuant to the book-entry transfer procedures described above, such Outstanding Notes will be credited to an account with such book-entry transfer facility specified by the holder) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Outstanding Notes may be retendered by following one of the procedures described under the caption “The Exchange Offer—Procedures for Tendering” in the Prospectus at any time prior to the Expiration Date.

3. Signature on this Letter of Transmittal; Written Instruments and Endorsements; Guarantee of Signatures.

If this Letter of Transmittal is signed by the registered holder(s) of the Outstanding Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Outstanding Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If a number of Outstanding Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of Outstanding Notes.

When this Letter of Transmittal is signed by the registered holder or holders (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) of Outstanding Notes listed and tendered hereby, no endorsements of certificates or separate written instruments of transfer or exchange are required.

If this Letter of Transmittal is signed by a person other than the registered holder or holders of the Outstanding Notes listed, such Outstanding Notes must be endorsed or accompanied by separate written

instruments of transfer or exchange in form satisfactory to the Issuer and duly executed by the registered holder, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the Outstanding Notes.

If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Issuer, proper evidence satisfactory to the Issuer of their authority so to act must be submitted.

Endorsements on certificates or signatures on separate written instruments of transfer or exchange required by this Instruction 3 must be guaranteed by an Eligible Guarantor Institution.

Signatures on this Letter of Transmittal must be guaranteed by an Eligible Guarantor Institution, unless Outstanding Notes are tendered: (i) by a holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on this Letter of Transmittal; or (ii) for the account of an Eligible Guarantor Institution (as defined below). In the event that the signatures in this Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by an eligible guarantor institution which is a member of a firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an “Eligible Guarantor Institution”). If Outstanding Notes are registered in the name of a person other than the signer of this Letter of Transmittal, the Outstanding Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Issuer, in its sole discretion, duly executed by the registered holder with the signature thereon guaranteed by an Eligible Guarantor Institution.

4. Special Issuance and Delivery Instructions.

Tendering holders should indicate, as applicable, the name and address to which the Exchange Notes or certificates for Outstanding Notes not exchanged are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the tax identification number of the person named must also be indicated. Holders tendering Outstanding Notes by book-entry transfer may request that Outstanding Notes not exchanged be credited to such account maintained at the book-entry transfer facility as such holder may designate.

5. Transfer Taxes.

The Issuer shall pay all transfer taxes, if any, applicable to the transfer and exchange of Outstanding Notes to it or its order pursuant to the Exchange Offer. If, however, certificates representing Exchange Notes or Outstanding Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any other person other than the registered holder of the Outstanding Notes tendered, or if tendered Outstanding Notes are registered in the name of any person other than the person signing the Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer and exchange of Outstanding Notes to the Issuer or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exception therefrom is not submitted herewith the amount of such transfer taxes will be billed directly to such tendering holder.

6. Intentionally Omitted.

7. Mutilated, Lost, Stolen or Destroyed Securities.

Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed, should contact the Exchange Agent at the address indicated below for further instructions.

8. Substitute Form W-9

Each holder of Outstanding Notes whose Outstanding Notes are accepted for exchange (or other payee) is generally required to provide a correct taxpayer identification number (“TIN”) (e.g., the holder’s Social Security or federal employer identification number) and certain other information, on Substitute Form W-9, which is provided under “Important Tax Information” below, and to certify under penalties of perjury that the holder (or other payee) is not subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the holder (or other payee) to a $50 penalty imposed by the Internal Revenue Service and 28% federal income tax backup withholding on payments made in connection with the Outstanding Notes or the Exchange Notes. The box in Part 3 of the Substitute Form W-9 may be checked if the holder (or other payee) has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked and a TIN is not provided by the time any payment is made in connection with the Outstanding Notes or the Exchange Notes, 28% of all such payments will be withheld until a TIN is provided and, if a TIN is not provided within 60 days, such withheld amounts will be paid over to the Internal Revenue Service.

9. Requests for Assistance or Additional Copies.

Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth above. In addition, all questions relating to the Exchange Offer, as well as requests for assistance or additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number indicated above.

IMPORTANT: This Letter of Transmittal or a facsimile or copy thereof (together with certificates of Outstanding Notes or confirmation of book-entry transfer and all other required documents) or a Notice of Guaranteed Delivery must be received by the Exchange Agent on or prior to the Expiration Date.

IMPORTANT TAX INFORMATION

Under U.S. federal income tax law, a holder of Outstanding Notes whose Outstanding Notes are accepted for exchange may be subject to backup withholding unless the holder provides U.S. Bank National Association, as Paying Agent (the “Paying Agent”), through the Exchange Agent, with either (i) such holder’s correct taxpayer identification number (“TIN”) on Substitute Form W-9 attached hereto, certifying (A) that the TIN provided on Substitute Form W-9 is correct (or that such holder of Outstanding Notes is awaiting a TIN), (B) that the holder of Outstanding Notes is not subject to backup withholding because (x) such holder of Outstanding Notes is exempt from backup withholding, (y) such holder of Outstanding Notes has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (z) the Internal Revenue Service has notified the holder of Outstanding Notes that he or she is no longer subject to backup withholding and (C) that the holder of Outstanding Notes is a U.S. person (including a U.S. resident alien); or (ii) an adequate basis for exemption from backup withholding. If such holder of Outstanding Notes is a U.S. individual, the TIN is such holder’s social security number. If the Paying Agent is not provided with the correct TIN, the holder of Outstanding Notes may also be subject to certain penalties imposed by the Internal Revenue Service.

Certain holders of Outstanding Notes (including, among others, all corporations and certain foreign individuals and entities) are not subject to these backup withholding requirements. However, exempt holders of Outstanding Notes should indicate their exempt status on Substitute Form W-9. For example, a corporation should complete the Substitute Form W-9, provide its TIN and indicate by checking the appropriate boxes in Part 4 of the Substitute Form W-9 that it is a corporation and that it is exempt from backup withholding. In order for a

foreign individual to qualify as an exempt recipient, the holder must submit the appropriate Form W-8BEN, rather than a Form W-9, signed under penalties of perjury, attesting to that individual’s exempt status. A Form W-8BEN can be obtained from the Paying Agent. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for more instructions.

If backup withholding applies, the Paying Agent is required to withhold 28% of any payments made to the holder of Outstanding Notes or Exchange Notes or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service, provided the required information is furnished.

The box in Part 3 of the Substitute Form W-9 may be checked if the surrendering holder of Outstanding Notes has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the holder of Outstanding Notes or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Paying Agent will withhold 28% of all payments made prior to the time a properly certified TIN is provided to the Paying Agent and, if the Paying Agent is not provided with a TIN within 60 days, such amounts will be paid over to the Internal Revenue Service.

The holder of Outstanding Notes is required to give the Paying Agent the TIN (e.g., social security number or employer identification number) of the record owner of the Outstanding Notes. If the Outstanding Notes are in more than one name or are not in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the Paying Agent. Social Security numbers and individual taxpayer identification numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.

For this type of account:	Give name and the SOCIAL SECURITY number (or individual taxpayer identification number) of—
1.   An individual’s account	The individual
2.   Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account
3.   Custodian account of a minor (Uniform Gift to Minors Act)	The minor
4.   Account in the name of guardian or committee for a designated ward, minor, or incompetent person	The ward, minor, or incompetent person
5.   a  The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee
b  So-called trust account that is not a legal or valid trust under State law	The actual owner

For this type of account:	Give the name and the EMPLOYER IDENTIFICATION number of—
6.   Sole proprietorship account or single owner LLC	The owner (or the owner’s Social Security number or individual taxpayer identification number) (you must show the name of the owner but you may also enter your business or “doing business as” name)
7.   A valid trust, estate, or pension trust	The legal entity (do not furnish the Taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title)
8.   Corporate or LLC electing corporate status	The corporation
9.   Religious, charitable, or educational organization account or an association, club or other tax-exempt organization	The organization
10.   Partnership or multi-member LLC	The partnership
11.   A broker or registered nominee	The broker or nominee
12.   Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments)	The public entity

* Note: If no name is circled when there is more than one name listed, the TIN will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Obtaining a Number

If you do not have a taxpayer identification number, obtain Form SS-5, Application for a Social Security Card, Form SS-4, Application for Employer Identification Number or Form W-7, Application for Individual Taxpayer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number.

To complete Substitute Form W-9, if you do not have a taxpayer identification number, write “Applied For” in the space for the taxpayer identification number in Part 1, check the box in Part 3, sign and date the Form, and give it to the requester.

Payee Exempt from Backup Withholding

Payees specifically exempted from backup withholding on ALL payments include the following:

· An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodian account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2).

· The United States, or any agency or instrumentality thereof.

· A State, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities.

· An international organization or any agency, or instrumentality thereof.

· A foreign government or any of its political subdivisions, agencies or instrumentalities.

Payees that may be specifically exempted from backup withholding on certain payments include the following:

· A corporation.

· A financial institution.

· A futures commission merchant registered with the Commodity Futures Trading Commission.

· A dealer in securities or commodities registered in the United States, the District of Columbia or a possession of the United States.

· A real estate investment trust.

· A nominee or custodian.

· A common trust fund operated by a bank under section 584(a).

· A trust exempt from tax under section 664 or described in section 4947.

· An entity registered at all times during the taxable year under the Investment Company Act of 1940.

· A foreign central bank of issue.

Exempt payees should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYING AGENT, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, CHECK THE BOX LABELLED “EXEMPT FROM BACKUP WITHHOLDING”, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

Privacy Act Notice.—Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA or Archer MSA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide this information to the Department of Justice for civil and criminal litigation, and to cities, states, and the District of Columbia to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, or to Federal and state agencies to enforce Federal nontax criminal laws and to combat terrorism.

Penalties

1.  Penalty for Failure to Furnish Taxpayer identification Number.—If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

2.  Civil Penalty for False Information With Respect to Withholding.—If you make a false statement with no reasonable basis that results in no imposition of backup withholding, you are subject to a penalty of $500.

3.  Criminal Penalty for Falsifying Information.—Falsifying certifications or affirmations may be subject to criminal penalties including fines and/or imprisonment.

4.  Misuse of Taxpayer Identification Numbers.—If the requester discloses or uses taxpayer identification numbers in violation of Federal Law, the requester may be subject to civil and criminal penalties.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX ADVISOR OR THE INTERNAL REVENUE SERVICE.

PAYER’S NAME: U.S. Bank National Association, as Exchange Agent

SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service Payor’s Request for Taxpayer Identification Number (TIN)	Part 1—PLEASE PROVIDE YOUR TIN AND CERTIFY BY SIGNING AND DATING BELOW	Name Social Security Number OR Employer Identification Number
	Part 2—Certification—Under the penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien).
	Part 3 Awaiting TIN    ¨
	Part 4—Check appropriate boxes:
	Individual/Sole proprietor    ¨ Partnership    ¨ Corporation    ¨ Other (specify)    ¨	Exempt from backup withholding    ¨
	Certificate Instructions—You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).
The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.
Signature		Date                                                   , 0000

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me will be withheld.

Signature Date , 2003