IMPORTANT PGA UPDATE.

We have been provided with a Court File No. 09-8342-00CL as reference. Canadian Scooter Corporation (CSC), also known as Vespa Canada, operated under direct licence from Piaggio Group Americas (PGA) as the Canadian distributor of the Piaggio Group product line (Vespa, Piaggio, Aprilia, Moto Guzzi). Below is our understanding of the events that transpired.

· On August 28, 2009, CSC commenced an action in the Ontario Superior Court of Justice against Piaggio and PGA as well as related companies.

· CSC was terminated as Piaggio’s exclusive Canadian distributor on October 5, 2009, as a result of its failure to pay outstanding invoices owing to Piaggio and PGA.

· On November 6, 2009 at 5:00pm, the existing Canadian dealers were notified of the transition to PGA relating to the distribution and business operations in Canada.

· On November 10, 2009, PGA issued the media-newswire outlining the announcement. Refer to the following: www.newswire.ca/en/releases/archive/November2009/10/c7956.html

· On December 18, 2009, PGA filed a defence to CSC’s action. At the same time, Piaggio and PGA commenced a counterclaim against CSC, certain of its principals, and certain Canadian dealers of Piaggio products controlled by those same. In the counterclaim, Piaggio and PGA are seeking: (i) damages for CSC’s unpaid invoices, (ii) damages for CSC’s breaches of its post-termination obligations under its distributorship agreement with Piaggio, (iii) a declaration that the CSC Group Defendants have unlawfully used and continue to unlawfully use Piaggio’s trade-marks, an injunction restraining them from doing so, and damages for same, and (iv) damages for product unlawfully obtained by the CSC Group Defendants.

· On February 3, 2010, PGA conducted a Canadian/Ontario Dealer Meeting to assess who will be eligible to continue as an authorized PGA dealer. As a result some non-performing dealers, including the Corporate-run dealerships which were owned and operated by CSC, are no longer approved authorized dealers of the Piaggio product line in Canada.

· Vespa Burlington has completed the authorization process and is pleased to announce that we are your authorized PGA dealer servicing Toronto through to the Niagara Region.
For those interested in learning more about the changes, please stop by the dealership and we can discuss over an espresso.