October 13, 1999

Costa Mesa, CA- In a strategic move, privately held Lost Arrow Corp., the holding company of Patagonia Inc. acquired 50% of, Cold as Ice Inc., a Costa Mesa based women�s snowboarding apparel company. Terms of this deal were not disclosed.

Through this alliance, the two companies plan to expand the Cold as Ice, Pixi, and Stardust brands through increased international distribution and enhanced service to U.S.-based retailers. The Cold as Ice headquarters will remain in Costa Mesa, CA. and there are no plans for changes to the in-house staff. The Cold as Ice team of athletes will also remain intact, and could include a top professional female rider in the near future. For now, advertising and marketing plans will continue as planned.

Cold as Ice and Lost Arrow/Patagonia share similar business philosophies and a mutual concern for environmental & community issues, which are important to their core customer. Cold as Ice focuses on tough issues facing young women today while working to promote an empowering, yet feminine image. Lost Arrow Corp/Patagonia has long been an ardent advocate of environmental issues. Says Darcy Lee, "The match between the two companies is really strong and we�re all looking forward to working together."

Director of New Business Development at Lost Arrow/Patagonia, Bill Kulczycki, stated that Lost Arrow has plans to provide financial and operational support for the Cold as Ice, Inc. brands. "Cold as Ice�s strength lies in superb design and marketing", said Mr. Kulczycki. "By integrating into our operations, Cold as Ice will have more time and resources available to focus on product development and marketing of this great snowboarding line for women and girls."

Cold as Ice will continue to offer its apparel through their established wholesale distribution.