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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(Name of Small Business Issuer in its charter)
NEW HAMPSHIRE 14-1805077
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
100 WALNUT STREET - CHAMPLAIN, NEW YORK 12919
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (518) 298-2042
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
COMMON STOCK OTCBB NASDAQ
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK $000.1
____________________________
(Title of class)
____________________________
(Title of class)
Potential persons who are to respond to the collection of
information contained in this form are not required to
respond unless the form displays a currently valid OMB
control number.
SEC 2336 (3/97)
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GENERAL INSTRUCTIONS
A. Use of Form 10-SB.
1. This Form may be used by a "small business issuer," defined in
Rule 12b-2 (Sect. 240.12b-2) of the Securities Exchange Act of
1934 (the "Exchange Act"), to register a class of securities
under Section 12(b) or (g) of the Exchange Act. For further
information as to eligibility to use this form see Item 10(a)
of Regulation S-B (17 CFR 228.10 et seg.).
2. If the small business issuer is not organized under the laws of
any of the states of or the United States of America, it shall
at the time of filing this registration statement, file with
the Commission a written irrevocable consent and power of
attorney on Form FX [Sect. 239.42]. Any change to the name or
address of the agent for service of the issuer shall be
communicated promptly to the Commission through amendment of
the requisite form and referencing the file number of the
registration statement.
B. Signature and Filing of Registration Statement.
1. File three "complete" copies and five "additional" copies of
the registration statement with the Commission and file at
least one complete copy with each exchange on which the
securities will be registered. A "complete" copy includes
financial statements, exhibits and all other papers and
documents. An "additional" copy excludes exhibits.
2. Manually sign at least one copy of the report filed with the
Commission and each exchange; other copies should have typed or
printed signatures.
C. Information to be Incorporated by Reference.
Refer to Rule 12b-23 (Sect. 240.12b-23 of this chapter) if
information will be incorporated by reference from other documents
in answer or partial answer to any item of this Form.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Business.
Furnish the information required by Item 101 of Regulation S-B.
Item 2. Management's Discussion and Analysis or Plan of 0peration.
Furnish the information required by Item 303 of Regulation S-B.
Item 3. Description of Property.
Furnish the information required by Item 102 of Regulation S-B.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
Furnish the information required by Item 403 of Regulation S-B.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
Furnish the information required by Item 401 of Regulation S-B.
Item 6. Executive Compensation.
Furnish the information required by Item 402 of Regulation S-B.
Item 7. Certain Relationships and Related Transactions.
Furnish the information required by Item 404 of Regulation S-B.
Item 8. Legal Proceedings.
Furnish the information required by Item 103 of Regulation S-B.
Item 9. Market for Common Equity and Related Stockholder Matters.
Furnish the information required by Item 201 of Regulation S-B
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Item 10. Recent Sales of Unregistered Securities.
Furnish the information required by Item 701 of Regulation S-B.
Item 11. Description of Securities.
Furnish the information required by Item 202 of Regulation S-B.
Item 12. Indemnification of Directors and Officers.
Furnish the information required by Item 702 of Regulation S-B.
Item 13. Financial Statements.
Furnish the information required by Item 310 of Regulation S-B.
Item 14. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure.
Furnish the information required by Item 304 of Regulation S-B.
Item 15. Financial Statements and Exhibits.
(a) List separately all financial statements filed as part of
the registration statement.
(b) Furnish the exhibits required by Item 601 of Regulation S-B.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
_________________________
(Registrant)
Date _____________________ By _________________________
(Signature)*
Print the name and title of each signing officer under his or her
signature.
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ITEM 1: DESCRIPTION OF BUSINESS
Business Development
Ameri-can Railway Systems Inc. is a developmental-stage company
incorporated in New Hampshire on May 4, 1998. The Company may be
deemed a successor company in fact to Ameri-Can Equipment Sales and
Leasing, Inc. (the "Predecessor"), a Canadian corporation. The
Company and the Predecessor have common ownership. The Company
acquired certain assets and assumed certain liabilities of the
Predecessor.
Bankruptcy or receivership: N/A
Material reclassification: N/A
Business of Issurer
The prime focus of Ameri-Can Railway Systems Inc. (ARS) is wireless
private network management for railway traffic control and public
safety. ARS designs, develops and commercializes new lines of
railroad equipment products based on modern signaling, control and
communications technologies. The Advance Warning System for railway
level crossings is the first commercial product to be offered by ARS,
and its technology is the foundation for an extensive family of
wayside warning and wayside to train signaling products.
Railway signaling and control systems are used to provide advance
warning of oncoming trains, and maintain adequate separation between
trains on the same track and in switching areas where tracks cross or
merge. They also facilitate train movements under centralized
dispatcher control, classify freight cars, and provide warning systems
for rail and highway grade crossings. Signaling system technology
ranges from the use of microprocessors to 150-ton freight car
retarders. The technology has evolved from relatively simple train
separation schemes to the highly sophisticated systems that facilitate
complete automation of both railway and rapid transit operations.
The ARS system makes innovative use of reliable, remote sensing
equipment and radio communications technology, allowing the system to
be priced much lower than competing systems. The ARS system is a
complete line of intelligent microprocessor-based equipment for train
detection, vital wireless communications, advanced warning systems,
that provide general-purpose data acquisition and control capabilities
for a wide variety of vital fail-safe railway applications.
The ARS Signaling System is composed of five modules: Web Sensors -
that perform the wheel sensing functions:
Rail Sensor Processors - to control and process the signals from the
sensors, and interface to the communications system.
Digital Communications Sub-System - that may be a data radio,
dedicated wire lines or multi-drop system.
Application (Crossing) Processor - to collect and interpret sensor
data from Remote Sensor Processors and perform the specific
application functions.
Optional PC-based Diagnostics and Monitoring System - to maintain
monitor and analyze the application system.
Two important advances have been secured in the ARS platform by
eliminating the insulated joints used in conventional systems. In
these systems a signal is triggered when the axle of a carriage
creates a shunt across the insulated joints. Traditional competing
railway crossing systems use insulated joints in the tracks:
Because the ARS system does not use insulated joints it is not prone
to false triggering.
Because the ARS system eliminates insulated joints it reduces wheel
damage, premature wheel wear, damaged tracks and, ultimately,
potential derailments. It is estimated that each insulated joint costs
$1,000 per year to maintain. With each crossing requiring at least one
set of joints per track savings on maintenance add up very quickly.
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The ARS Advanced Warning System offers optional features not available
on competing systems. ARS has grouped its product offerings into three
tiers, with each tier representing the product focus inherent in the
product line.
Tier 1 Safety Systems
Tier 2 Wayside to train communications
Tier 3 Wayside and equipment monitoring
Using the same platform, many value-added operations are possible.
For example, the ARS product in future can carry out predictive
maintenance on trains. It can detect flat wheels and over-heated
bearings on a rail car. Both of these problems are leading causes of
train derailments. The ARS signaling system can identify potentially
dangerous track and wheel situations so that early maintenance pre-
empts accidents and derailments.
The ARS system is a boon to railway operating efficiency because it
can give virtually instant feedback on the location of cars and
freight, which includes logging and time-stamping of trains as they
pass through a crossing. Plus, this innovative system will allow
communication between trains and crossing signals to provide motorists
with more complete information on train movements. Improved
information creates safer conditions and benefits for the railways and
their customers, as well as motorists and pedestrians.
ARS plans to distribute the Advance Warning System through an
exclusive distributorship with Geismar/Modern Track Machinery Inc.
(Geismar/MTM). Geismar/MTM has a worldwide sales network in over 100
countries. They are a premier manufacturer and distributor of light
machinery and railway systems for the railroad industry. They command
a major share of the North American markets.
ARS has completed the design, technical development, and beta testing
of the Advanced Warning System and is now in pre-production testing.
Canadian Pacific, among North America's largest and most
technologically advanced railways, is participating in a trial of pre-
productions systems. Once CP has completed its audit of the system,
it is anticipated that ARS systems will be installed along many of
North America's railway systems.
"US Freight Transportation Forecast...to 2003", a study conducted by
DRI/McGraw-Hill, predicts that rail inter-modal and air freight will
experience the largest percentage revenue gains of all transportation
industries in the coming years. Air freight revenues will increase by
90% while rail inter-modal is forecast to grow 61%. Trucking revenue,
while still 76% of total transportation revenue, is expected to
decline by 2%, with the loss mainly to rail and air freight.
Despite growing public pressure, potential liabilities and threatened
government legislation, there are still over 260,000 inadequately
protected passive and private crossings in North America. These
crossings remain unprotected as a result of the extremely high cost of
installing and maintaining available crossing systems. While the
railways would like to provide warning systems at every crossing the
expense ($39 billion) of doing so is clearly beyond their means in a
competitive transportation industry. Substantial government subsidies
are available, but they do not come close to covering the cost of
installing so many crossing systems.
On the tracks operated by these railways there are 220,000 passive
and/or private crossings in the USA and 40,000 in Canada. Based on an
average cost per crossing of US$30,000 per installation, the 260,000
passive crossings indicate a market worth US$7,800,000,000 for the ARS
basic system.
This estimate does not include the approximately 80,000 public
crossings in the USA and 15,000 in Canada which have some form of
active warning system in place, nor does it include the crossings for
the approximately 60 transit or passenger railways across North
America.
The Company visualizes that there is a strong market for a crossing
advance control system which is substantially cheaper than the
presently available systems from the four major suppliers. This price
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advantage, combined with the technical advantages described earlier,
in management opinion provide a substantial market window.
There are four major suppliers of railway crossing systems:
Safetran Systems Corporation, Minneapolis, MN.
General Railway Signal Corporation, Rochester, NY.
United Switch & Signal Inc., Columbia, SC.
Harmon Industries Inc., Blue Springs, MO.
Sources and availability of Raw Materials: N/A
Dependence on one or a few customers: N/A
The company has applied for U.S. patent protection for its product.
ARS has applied for patent protection for an Automated Railway
Crossing in the USA and will pursue protection overseas through
international patent treaties and local patent applications in
appropriate markets. ARS has a United States patent pending
application filed on January 23, 1998.
Government Approval: N/A
The government does not regulate private crossings at present and
there are no specifications for passive crossings. FRA will hold an
informal safety inquiry to review the concept of defining minimum
safety standards for private crossings, or for certain categories of
private crossings, up to and including standards for closure and
consolidation under certain conditions. The inquiry will address the
allocation of responsibilities and costs associated with private
crossings and the need for dispute resolution mechanisms regarding
that allocation.
Every year accidents at railway crossings claim the lives of more than
1600 people in North America. Railways are facing significant
potential liabilities as a result of these court rulings. In addition
mounting pressure from the public as well as municipalities, states,
provinces and the federal government in the US and Canada is beginning
to demand that all passive/private crossings have adequate advance
warning systems.
Year 2000
Historically, certain computer programs were written using two digits
rather that four to define the applicable year. Accordingly, the
Company's software may recognize a date using "00" as 1900 rather than
the year 2000, which could result in computer systems failures or
miscalculations, commonly referred to as the Year 2000 ("Y2K") issue.
The Y2K issue can arise at any point in the Company's supply, product
development tools, and financial applications. Incomplete or untimely
resolution of the Y2K issue by the company, key suppliers, customers
and other parties could have a material adverse effect on the
company's results of operations, financial condition and cash flows.
The Company has developed a plan to modify its information technology
to recognize the Year 2000 and has, to the extent necessary, begun
analyzing and converting, where necessary, its critical data
processing systems. Since many of the Company's systems and software
are relatively new, management does not expect Year 2000 issues
related to its own internal systems to be significant and does not
anticipate that it will incur significant operating expenses or be
required to invest heavily in computer systems improvements to be Year
2000 compliant. The Company is planning to initiate formal
communications with certain of its significant equipment suppliers and
service providers to determine the extent to which the Company's
systems may be vulnerable to embedded technology such as micro-
controllers. The Company currently expects the project to be
completed in the third quarter of 1999. There can be no guarantee that
the systems of suppliers or other companies on which the Company
relies will be converted in a timely manner and will not have a
material adverse effect on the Company's systems. To date the Company
has not developed a formal contingency plan. The Company believes it
is taking the steps necessary regarding Year 2000 compliance with
respect to matters within its
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control. However, no assurance can be given that the Company's
systems will be made Year 2000 compliant in a timely manner or that
the Year 2000 problem will not have a material adverse effect on the
Company's business, prospects, financial condition and results of
operations.
The Founders of the Company have contributed their knowledge and
expertise to the Company in exchange for 5,250,739 number of common
shares. (SEE DESCRIPTION OF LOCK-UP AGREEMENT) ARS has completed the
design and technical development of the Advance Warning System, which
offers significantly more features and functionality than envisioned
in the original specification. The prototype system has been
rigorously tested to insure that the communications and the wheel
counting systems operate accurately at speeds of up to 175 miles per
hour. Test and certification procedures (audit) of the pre-production
system installed on CPR's main line started at the end of February
1999 and should take approximately 90 to 120 days. Upon successful
completion of the certification process, the ARS Advance Warning
System will be approved for installation along many other major
Railways associated with CPR.
LOCK-UP AGREEMENT
On June 20, 1998, the Directors, Officers Advisors and certain initial
investors to the Company entered into an Lock-up Agreement (the" Lock-
up") with the Company, hereby agreeing that for a period of two (2)
years from the date of the first of sales of the Company's stock to
the public, under what is commonly referred to as a Regulation D-Rule
504 offering. The Directors, Officers Advisors agreed not to,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any of the 6,811,489 shares of Company Common
Stock without prior written consent of the company, except that they
may transfer any number of such shares to their children, by gift or
otherwise, provided that any such shares will continue to be subject
to the restriction set forth.
Compliance with environmental law: N/A
Total employees and contractors number 7, full time employees are
zero.
Reports to Security Holders:
The Company is not presently a reporting Company and does not file
annual reports or other information with the securities exchange
commission, On the effective date of this filing under the Securities
Act, however, the Company will become a reporting Company. The Company
intends to furnish it's shareholders with annual reports containing
audited financial statements and quarterly reports containing un-
audited summary financial information for each of the first three
quarters of each fiscal year.
The public may read and copy all materials filed with the SEC at the
SEC's Public Reference Room at 450 Fifth St., N.W., Washington, D.C.,
20549 or may obtain a information on the operation of the public
Reference Room by calling the SEC at 1-800-SEC-0330.
DILUTION
As of November 20, 1998, there were 9,726,489 shares of Common Stock.
As of that date, the net tangible book value per share of Common Stock
was $0.0014
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"Dilution" represents the difference between the offering price of the
Common Stock and the net tangible book value per share of Common Stock
immediately after completion of the Offering. "Net tangible book
value" is the amount that results from subtracting the total
liabilities of the Company from its total tangible assets. Assuming
all the shares offered are sold, and giving effect to the receipt of
the net proceeds of this Offering, the projected net tangible book
value of the Common Stock would be $210,128.00 or $0.0214 per share.
Therefore, the purchasers of the Common Stock will suffer an immediate
dilution of approximately $0.9786 per share while the present
stockholders of the Company will receive an immediate increase of
$0.0200 per share in the net tangible book value of the Common Stock
held by them.
The following table summarizes the results of the sale of 100,000
shares of the Common Stock as described.
Offering Price of Stock $1.000
Net Tangible Book Value before Offering 0.0014
Increase attributable to sale of Common Stock 0.0200
Net Tangible Book Value after Offering 0.0214
Per share dilution to Purchaser $0.9786
CAPITALIZATION
The following table sets forth the capitalization of the Company at
January 30, 1999, and as adjusted, to give effect to the full
subscription of this Offering. This table should be read in
conjunction with the Company's financial statements and footnotes
thereto included elsewhere in this Offering Memorandum.
Actual As Adjusted(1)
Long-Term Debt $ -0- $ -0-
Stockholders' Equity
Preferred Stock, Par Value $.0001;
25,000,000 Shares Authorized, zero issued -0- -0-
Common Stock, Par Value $.0001;
50,000,000 shares authorized
9,726,489 issued and outstanding 973
9,826,489 issued and outstanding 983
Additional Paid-In Capital $134,256 209,246
Retained Earnings -0- -0-
Total Stockholders' Equity $135,229 $210,229
Total Stockholders' Equity and
Long- Term Debt $135,229 $210,229
(1) Assumes the Sale of 100,000 Shares of Common Stock
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On February 1,1999 the Board of Directors authorized the Company to
issue 100,000 units. See Description of "Units" included elsewhere
herein.(which is hereby being offered) for the purpose of raising up
to $100,000, before expenses, through a sale of the Common Stock
pursuant to Regulation D, Rule 504 as of June 20,1998 the Company had
sold approximately 1,915,000 shares of Common Stock pursuant to
Regulation D, Rule 504, with proceeds of approximately $192 before
expenses. On November 20, 1998 the Company had sold an additional
1,000,000 shares of Common Stock pursuant to Regulation D, Rule 504,
with proceeds of approximately $100,000 before expenses.
Canadian Issuer: N/A
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
2(a) Plan of Operation
The Company is in the developmental stage and therefor has no revenue
from operations in the current fiscal year.
In the current fiscal year of operation the company anticipates to
have raised a total of $205,000 from the sale of its Common Stock
pursuant to Rule 504 Regular D exemption. These funds in part were
utilized to fund the start-up and development of the Company. The
Officers and Directors have not been compensated to date. SEE
Management Compensation included elsewhere herein.
The prime focus of Ameri-Can Railway Systems Inc. (ARS) is private
wireless network management for railway traffic control and public
safety. ARS designs, develops and commercializes new lines of
railroad equipment products based on modern data acquisition,
signaling, control and communications technologies. The Advance
Warning System for railway level crossings is the first commercial
product to be offered by ARS, and its technology is the foundation for
an extensive family of wayside warning and wayside to train signaling
products. The ARS objective is to build and design "State of the
Art," signal systems that meet customer demands, that are cost
competitive, and that are capable of standing up to the tough
conditions of continuous use in the railway industry.
Railway crossing systems are one of the most important safety systems
used by railroads. Canadian Pacific Railroad has agreed to test the
ARS Advance Crossing System on its main line in Mississauga Ontario
Canada. The audit and certification process is expected to take 60 to
180 days. Other major Canadian and associated U.S. railways that share
signaling information and test results with CPR will automatically
except positive test results, audited by CPR. It is anticipated that a
number of other railroads will want to put the system through their
own internal audit procedures, which will take 3 to 6 months. ARS
will lease/rent crossing systems to each of its customers on a money
back guarantee basis to gain approval at all targeted railways as soon
as possible. This approach will secure test sites at the major class I
and classes II railways in North America.
Certification of the ARS Advance Warning System by several Class I
railways will guarantee acceptance of the system by the majority of
Class II and Class III railways. Many Class II and III railways will
forego testing if more than one Class I railway has certified the
technology.
ARS plans to distribute the Advance Warning System through an
exclusive distributorship with Geismar -Modern Track Machinery Inc.
(Geismar/MTM). This ensures immediate exposure to the key decision-
makers at every one of the 697 railways and 60 rapid transit
authorities across North America, and guarantees ARS an entrance into
the world market. Geismar/MTM has a worldwide sales network in over
100 countries. They are a premier manufacturer and distributor of
light machinery and railway systems for the railroad industry. They
command 60% of the US market and over 70% of the Canadian market. The
alliance with Geismar/ MTM will enhance the company's ability to
penetrate the market. The ARS management team will support the efforts
of Geismar's sales representatives. The ARS Vice President of
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Sales and Service will be mandated to build a North American field
support network to service the railways directly insuring that ARS is
immediately recognized in the market place.
Market Development and Future Key Customers:
ARS will use a four-step approach to develop business opportunities in
national and international markets:
Identify and rank the decision-makers within each customer
organization.
Develop client champions among the decision-makers.
Establish decision-makers within the targeted companies listing to
include regions and divisions of the identified target.
Demonstrate the signal equipment at target accounts to insure a
comprehensive, unified understanding of ARS' advantages, and identify
problems for which ARS could contribute to cost effective solutions.
Publicity and Advertising:
The company will aggressively pursue the leading industry publications
for editorial coverage, publicity and trade advertising.
Railway Age
Progressive Railroading
Modern Railway
The objective will be to create awareness of the company's products.
Geismar/MTM will co-op with ARS on advertising.
Brochures and Technical Briefs:
ARS will produce a web site and product brochure to illustrate the
Advance Warning System's features and benefits to railway executive,
government transportation authorities and rail safety lobby groups.
The company plans to have Geismar / MTM representatives distribute
these brochures to customers. In addition they will be used in direct
marketing campaigns.
ARS will publish Technical Briefs that provides technical and
operational details. The briefs will be distributed over the web and
in hard copy to the railway's signal engineers to evaluate the system.
Direct Mail:
The company will use direct mail to build awareness of the Advanced
Warning System. The company will target senior officials at each
railway as well as appropriate officials at municipal, state,
provincial and Canadian US federal transportation authorities. By
targeting these government officials, the company hopes to be able to
"pull" product through the distribution channel.
Manufacturing Plan
Manufacturing and assembly will be by contractors for the foreseeable
future, with care taken to ensure that ISO 9000 standards are
maintained. The salient points are discussed below:
Procurement
All hardware will be specified and procured by ARS engineering staff.
This critical function will be controlled to guarantee that only
optimal hardware from the most reliable vendors (Motorola based) is
used. A database of hardware component failures, which occur during
manufacturing and test, will be
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maintained in order to keep vital statistics on component failure
rate for each part and for each vendor. This Quality Assurance program
will meet ISO9000 standards.
Component Assembly
To avoid the high cost of establishing an assembly plant, this
operation will be contracted out to a qualified assembly house. Future
assembly may require in-house facilities to control production and
reduce product cost.
Functional Testing
ARS' system will be tested in an environmentally controlled test
chamber from -40 to +85 Degree C. In addition, vibration tables will
be used to test the boards and sensors at variable vibration levels to
detect assembly and component mechanical problems. Thermal Cycling is
a well-documented process proven to expose failures in electronic
components.
Circuit boards will be monitored during extended temperature cycling
by a computer system, which will record the calibration, drift,
induced noise and functionality over several thermal cycles. Each
board is serialized and this data is saved permanently.
Final Quality Assurance
Contract manufacturers will assembly the ARS system. Company personnel
will approve all product tests, in order to control the final
acceptance and quality assurance operations before shipping.
The manufacturing area will be operated under the principles of "
Improved Product Reliability through Continuous Process Improvement"
in accordance with ISO9000 standards.
2(a).1(ii) Product Research and Development
During the coming fiscal year the company plans to complete the
initial pre-production testing and complete the first rail carrier
system audit and gain certification for the base Advance Crossing
configuration using a single track system. Multiple track systems
will be deployed later on in the fiscal year with logging of enhanced
rail data information (timestamps, etc.) and support of remote upload
of logging. Later releases in this fiscal year will alert vehicular
traffic of train direction and speed, and provide support for Wide
Area Network capability and TCP/IP protocol.
In future product releases the entry level crossing processor will be
expanded to include other devices and functions that can build on the
installed user-base. For example, the following products are in the
design stages and add considerable value for the railway yet are
relatively inexpensive to manufacture.
Hot box detector: This is a non-contact temperature measurement
system, which will add-on to our sensors on the track which will allow
the bearing journal temperatures to be monitored as the train rolls by
at high speed. This is a major safety issue for the railway since the
detection of a hot bearing can prevent a derailment.
Flat wheel detector: The use of a vibration sensor can be used to
detect wheel with flat spots. The detection of flat spots will allow
the offending cars to be decommissioned and repaired before additional
damage to the rail occurs.
Wide area networking: Current radio technology can be upgraded to
provide a higher speed communications capability and include
locomotive mobile radios and work equipment monitoring.
Hazardous Materials Monitoring: Constant monitoring of tank cars or
other vessels transporting hazardous materials, e.g. measures of
temperature, pressure, evaporation, volatility, decomposition, and so
forth.
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Inter-modal Reefer Monitoring Systems: This is a wireless monitoring
system for refrigerated railway cars (Reefers) which communicate with
each ARS crossing system. This allows the reefers to report a health
status and allows the railway to determine where the cars are located.
2(a) 1(iii) Purchase or sale of Plant and Significant Equipment:
This is not anticipated to occur as all manufacture and most assembly
is contracted out.
2(a) 1(iv) Significant Changes in Numbers of Employees: Full time
employees are expected to grow to 8 over the next fiscal year.
2(a) 2 Interim Period: N/A
ITEM 3. DESCRIPTION OF PROPERTY
The company has no investments in plants or other property. The
company presently leases office at the following locations.
Ameri-can Railway Systems, Incorporated
100 Walnut Street,
Champlain,
New York 12919
Tel: 518-298- 2042
Fax:518-298-2813
Small warehousing available, offices and meeting rooms when required.
Ameri-can Railway Systems, Incorporated,
3 Robert Speck Parkway,
9th Floor, Mississauga,
Ontario, L4Z 2G5
Tel: 905-276-661
Fax: 905-277-1232
Corporate Business Center, provides both large and small meeting rooms
and other common space. We will lease 2 offices at 100 square feet
each. Services are available on a charge per usage's bases ie:
answering phones, offices and typing services.
ITEM 4 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) security ownership of certain beneficial owners.
(1) (2) (3) (4)
Name and Address Amount and Percent of
Title of of Beneficial Nature of Class
Class Owner Beneficial
Owner
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Common Sydney Harland CO-Founder 46.0
2155 Winchester Court 4,520,239
Burlington Ontario, Canada,
L7P 3M7
Common Donald Hathaway CO-Founder 7.6
5964 Ninth Line, Erin 750,500
Ontario, Canada, N0B 1T0
(b) Security ownership of management.
(1) (2) (3) (4)
Title of Name and Address Amount and Percent of
Class of Beneficial Nature of Class
Owner Beneficial
Owner
Common Peter Ross Officer 1.4
276 Chartwell, Oakville, 144,250
Ontario, Canada, L6J 3Z9
Common Mark P. Miziolek CFO & Treasurer 0.6
1450 Bayshire Drive, 63,000
Oakville, Ontario, Canada,
L6H 6E7
Common John Andrews Director 1.0
109 Lamplighter Lane 100,500
Pontevedra, Fl 32082
Common Patrick R. Shea Director 1.0
944 North Russell Road, 100,500
Russell, Ontario. K4R 1C7
Common Robert M. Esecson Director 1.0
5964 Ninth Line, Erin, 100,500
Ontario, Canada, N0B 1T0
Common Peter Hoult Director 1.0
110 East 55th Street 100,500
11th floor
NY, NY 10022
(c) Changes in control.
Common Stock controlled by the Chief Executive Officer and the other
Co-Founder , both of whom are directors of the Company, own directly
or beneficially 5,270,739 shares of the Company's Common Stock and
will control more than 50% of the outstanding Common Stock if this
Offering is fully subscribed. Therefore, they are in a position to
elect all of the Company's Directors. The Company's Directors, in
turn, elect all of the Company's executive officers. Accordingly, the
principal shareholder and the other Co-Founder
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directly or indirectly will be able to control all of the affairs of
the Company. Therefor there is no situation which would result in a
change in control of the company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
A) Directors and Executive Officers of the Company are:
1) Name Age 2)Position 3)Term, Time Served
Sydney Harland 48 Chairman,CEO, 24 mo. 6 mo.
Peter Ross 55 President & COO 24 mo. 6 mo.
Mark Miziolek 41 CFO & Treasurer 24 mo. 6 mo.
Donald Hathaway 62 Director 24 mo. 6 mo.
Patrick Shea 50 Director 24 mo. 6 mo.
Robert Esecson 47 Dir.& Secretary 24 mo. 6 mo.
Peter Hoult 54 Director 24 mo. 6 mo.
John Andrews 45 Director 24 mo. 6 mo.
4) Business Experience:
Sydney A. Harland, M.C.Inst. M., 47, has been Chairman of the board
of Directors, Chief Executive Officer of the Company since April 5,
1998. He is a co-founder of the company. From 1987 to 1998, Mr.
Harland was President and sole stockholder, founder of Ameri-can
Equipment Sales and Leasing Inc., engaged in developing and managing
effective strategies, creating and executing sales and growth
opportunities, marketing new products, design and manufacturing. 1995
to Present: Consultant to Ontario Hydro Technologies with a mandate to
recognize opportunities and transfer technologies from Ontario Hydro's
nuclear research into industry. 1993 to Present: Developed wireless
advanced rail level crossing, signaling system that is less expensive
than traditional systems, is expandable to accommodate other
applications, easily installed and suitable to be remotely monitored.
The system has completed its initial prototype trials and is ready for
pre-commercial production. 1991: Developed Hi-Frequency electric
inverter based 300 Hz system for railway track maintenance. Designed
system from concept to finished product. Controlled all research and
development, contract engineering and manufacture of product.
Implemented warranty, service and parts policies. Established a North
American market, sales and service network through a worldwide
distribution network. 1987: Contracted to function as Vice President
and General Manager of point of purchase advertising and manufacturing
company. Increased markets share and profit by increasing sales,
implementing management controls and information systems. Improved
order entry, materials purchasing, production flow, quality, and
billing. 1985: US Sales Manager, Geismar/Modern Track Machinery Inc.,
Chicago, Illinois. Manufacturer of rail maintenance equipment.
Developed sales targets and strategies, customer pricing, and warranty
policy. Pioneered sales of new equipment lines, creating need through
equipment demonstrations, renting, leasing and closing sale when
capital budgets were available. 1982: Regional Sales Manager, Western
Canada, Tamper Canada, Toronto Ont. Manufacturer of railway track
maintenance equipment. Syd was responsible for equipment sales, lease,
and rental negotiations. New equipment specifications, parts supply,
warranty policy and establishment of Western Canadian subsidiary.
1980: General Manager, Eveready Lincoln Mercury Sales Ltd. Kamloops,
British Columbia. Contracted to restructure the company losing
$50,000 per month. The
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company had an annual planning volume of 1,000 units. Restored
company to break even in eight months, refinanced the company
and positioned it for sale. Rationalized vehicle and parts'
inventories, increased vehicle sales, part sales and service sales,
reduced staffing level by ten percent. 1976: Sales Specialist Western
Canada, Unit Rig and Equipment Company Tulsa, Oklahoma. Manufacture of
open pit mining trucks. Responsible for product sales negotiation,
product specifications, warranty policy, fleet upgrading, equipment
erection and commissioning, development of after market sales and
three parts depots with annual sales of $14-16 million. Mr. Harland
received a 4 year Electrical Diploma from CP Tech., Montreal, Quebec,
Canada and studied Business Administration and Marketing at Dawson
College Montreal, Quebec, Canada. Mr. Harland has been elected a
member of the Canadian Institute of Marketing and the American Railway
Engineering and Maintenance-of-Way Association (AREMA), he is an
entrepreneur, with extensive cross over experience in the railway,
telecommunications, nuclear utility and mining industries. Mr. Harland
has assured the Board of Directors that his other business shall not
be in conflict with the interest of the Company.
Peter Ross, MBA, B.Sc., 55, Has been the President and Chief Operating
Officer of the Company since May 28, 1998. From 1996 to 1998, Mr. Ross
was President and Chief Operating Officer of Internet Payment Inc., a
leader in the development of an Interac compliant electronic payments
system over the Internet. From 1995 to 1996 Mr. Ross was the President
and Chief Executive Officer Of Domal Envirotech Inc., a business
engaged in the manufacture of rubber adjustment units and transition
collars made from recycled tires and plastic waste. These products
were designed and used to prevent roadway deterioration around
manholes and catch basins. He invested in the company in 1995 and
brought it from a start up R&D operation to a fully commercialized
enterprise. He sold his position in the company in 1996. From 1994 to
1995, Mr. Ross was Vice President and Chief Operating Officer of Marr
Electric Limited, a 15 million dollar manufacturing and distribution
company serving the electrical Industry in the United States and
Canada. He was hired to lead Marr through a period of restructuring
involving cost reduction and product reengineering. From 1990 to 1993
Mr. Ross was Senior Vice President - Services and Corporate Secretary
of Voyageur Insurance Company. Voyageur is the largest provider of
travel insurance sold in Canada. With annual revenues of 100 million
dollars. From 1985 to 1989 Mr. Ross was Senior Vice President of
Services of Selkirk Communications Limited a public owned diversified
communications company with annual revenues of 180 million dollars and
over 1600 employees. The company is involved in radio, television and
satellite communications. From 1976 to 1985 Mr. Ross was Consultant -
Partner of Price Waterhouse where he specialized in computer
technology, which included providing client services in software
development and implementation, strategic planning and operation,
computer hardware, telecommunications, production and distribution,
Inventory management, financial management systems and sales and
customer service support. From 1970 to 1976 Mr. Ross was Director,
Systems/ Computer Services of Consolidated Bathurst a Canadian multi-
national forest products and packaging company with annual revenues
exceeding 1.5 billion dollars. Mr. Ross received his MBA, from
McGill University, Montreal, Quebec, Canada and a B.Sc., from Sir
George Williams University, Montreal, Quebec, Canada. Mr. Ross is a
Certified Management Consultant (CMC), and a member of the Institute
of Certified Management Consultants of Ontario.
Mark P. Miziolek, C.G.A., B.Com.,41, has been the Vice President and
Chief Financial Officer and Treasurer of the Company since May
20,1998. From 1994 to 1998, Mr. Miziolek first held the positions of
Treasurer and Chief Financial Officer, and was then promoted to
President, Treasurer & CFO of Thornmark Holdings Inc./Thornmark
Corporation. Thornmark is a privately held investment holding company
with interests in industrial and residential real estate development
and Great Lakes and ocean shipping. In his first position with the
company he was responsible for financial planning, arranging financing
and advising on portfolio investments. In his position as President,
Treasurer & CFO he was mandated to improve corporate profit and cash
flows from real estate and portfolio activities. Mr. Miziolek
reorganized the company to take maximum benefit of tax loses, provide
for greater shareholder liquidity and to restructure corporate debt.
From 1981 to 1994 Mr. Miziolek held the positions of Assistant
Controller and then in 1988 promoted to Controller of Upper Lakes
Group Inc. One of Canada's largest dry bulk shipping companies with 21
vessels operating on the Great Lakes and in 4 vessels in ocean trades.
Upper Lakes also has investments in related businesses of grain
brokerage, shipbuilding and repair and
12
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vessel fuelling. Mr. Miziolek first responsibilities included
financial statement preparation and analysis, budgeting, cash
flow management and special projects. As controller he was responsible
for annual and long term financial planning, statutory compliance
and financial reporting through a staff of 5. He acted in all areas
of corporate planning, budgeting, acquisition, finance, and treasury
management. Mr. Miziolek received his B. Com., from the University
of Toronto in 1983 and received his charter as a Certified General
Accountant in 1989.
John Andrews, BA, MBA.,41, has been a Director of the company since
June 3, 1998. Mr. Andrews is President and Chief Executive Officer of
Sanga International Inc., a leader in the Java applications
development market, addressing the growing need for enterprise
caliber, 'outward-facing', Java applications. John joined Sanga in
1998 from CSX where he served most recently as Chief Information
Officer. At CSX, he was also President and CEO of CSX Technology and a
Senior Vice President of CSX Transportation. Prior to joining CSX from
GTE in 1993, John served as the Vice President and General Manager of
several business units, serving the health, government and
telecommunications industries. During his career at GTE, he also held
positions in field operations, engineering, planning, operations,
finance and information technology. During his tenure at CSX, John
brought national recognition to the corporation as an industry leader
in technology and high performance organization. In 1996 and 1997,
Computer World magazine named CSX Transportation to the Network 25 as
an outstanding user of network technology in the world. In 1997 and
1998, CIO magazine honored CSX Transportation as a CIO 100 company of
the year and as a top IT performer. In 1997 and 1998, Computer World
magazine ranked CSX Corporation in the top 100 places to work in the
information systems field, obtaining the number one spot in 1998.
John's individual accolades include selection as a 1997 Visionary
award winner by Communications Week magazine in 1998. In 1996, he was
also a candidate for CIO of the year award by Information Week
magazine. John is a member of the Conference Board's Council of North
American Information Management Executives; National Defense
Transportation Association's Transportation Advisory Board; NCR's
Transportation Board of Directors; Computer World's Board of Directors
North Florida Technology Innovation Corporation's Board; Harvard
School of Government; and BMC Software Corporation's Board of
Advisors. John holds a B.A. degree in Business Administration/Finance
from Whitworth College and a Masters Degree in Business Administration
form the University of Puget Sound. Mr. Andrews has assured the Board
of Directors that his other business shall not be in conflict with
the interest of the Company.
Donald B. Hathaway, B.Eng., B.Sc., MBA, FCMC, 62 has been a Director
of the Company since June 3, 1998. He is a co-founder of the
Company. Don Hathaway is the Managing Director and co-founder, NetFX
Concepts Inc., begun in 1996 to pursue the commercialization of new
and innovative technologies. In September 1997 NetFX was selected to
act on behalf of one of Canada's largest telecommunications companies,
targeting $10 million annually in early stage, high technology
investments. While pursuing a career in electronics design and
manufacturing, academia and management consulting over the last thirty
years, he has also been an active entrepreneur, with interests in
several small companies. He has been a partner in two national
consulting firms and the president of two others, and he is a Past
President and a Fellow of the Institute of Management Consultants of
Ontario, and a Past President of the Institute of Management
Consultants of Canada. He is active on several Boards, including
Qnetix Inc. (Chair); Wordwrap Associates Inc.(Chair); Organization and
Systems Design Inc. (Chair); The Uxmal Group; Keystone Enterprizes
Inc.; Gate Technology Inc., and NetFX Concepts Inc. He is a former
Governor of York University and he is currently on the University of
Waterloo Advisory Council and The Financial Post's selection committee
for the Leaders in Management Education Award. He has a B.Eng.
(electrical) from Sir George Williams University (now Concordia), a
B.Sc. in mathematics from the same university, and an MBA from York
University. Mr. Hathaway has assured the Board of Directors that his
other business shall not be in conflict with the interest of the
Company.
Patrick R. Shea, 50 has been a Director of the Company since June 3,
1998 Pat Shea is the President and co-founder of Taima Corporation, a
privately owned, Canadian-based company providing in-bound call center
and related technical support services to the high growth internet,
hardware and software market.
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Currently operating across North America, it plans expansion
into Europe and Asia Pacific within a year. In 1985 Pat Shea
co-founded The PSC Communications Group (PSC), a high tech
systems, consulting and OEM training company, which he positioned
as Cisco's number one training partner worldwide (with offices
in Canada, the US, Europe and Asia Pacific). While at PSC, he
assumed the positions of President, CEO and Chairman of the Board. He
sold the company in 1994, but retained executive leadership till he
joined Taima in 1996. The company was renamed to Geotrain in 1997, and
remains one of Ciscos's prime global training partners. He is still a
shareholder and Director of Geotrain. He joined Bell Canada in 1969,
and for 14 years (over two periods), he designed and managed numerous
communications and systems projects in networks and telematics. He
represented Bell Canada on various forums, including a committee of
the United Nations International Telecommunications Union, focused on
the harmonization of international services and standards, and chaired
a related international advisory group to fast-track research and the
implementation of advanced communication protocols. He worked at Royal
Trust from 1978 to 1980, leading major initiatives in their quest to
revamp their Information Systems programs. An entrepreneur by nature,
with extensive knowledge in the establishment, management and
financing of fast growth companies, Pat Shea is actively involved in
several investments in the high tech sector, and serves on the board
of various companies. He has a Diploma in Electronics from the
Montreal Institute of Technology (1969). Mr. Shea has assured the
Board of Directors that his other business shall not be in conflict
with the interest of the Company.
Robert M. Esecson, BS, JD, 47 has been a Director of the Company since
June 3, 1998. Bob Esecson is the founder, Senior Managing Director and
CEO of The Esmarox Group, LLC, an Investment banking and business
advisory firm specializing in comprehensive services to public and
private middle-market companies. The Esmarox Group develops and
implements creative marketing programs and strategic growth/expansion
plans to increase the profitability of client firms. It is actively
involved in corporate divestitures, raising and investing venture
capital, and negotiating and structuring M&A transactions. Trained as
a lawyer, and an entrepreneur in his own right, Bob Esecson has a
comprehensive background in finance, management, and consulting
businesses. He has held senior executive positions at a merchant and
investment-banking firm and at several financial services firms. He
earned BS in Management and Accounting from Bentley College in
Waltham, Massachusetts and a JD from the New England School of Law in
Boston. Mr. Esecson has assured the Board of Directors that his other
business shall not be in conflict with the interest of the Company.
Peter J. Hoult, BA., 54, has been a Director of the Company since June
3, 1998. In 1993 Peter Hoult formed the international strategic
marketing and consulting practice which he operates from North
Carolina and Toronto, Ontario. Upon graduation from university in 1965
he joined Unilever in London, England as a management trainee while
attending the London School of Economics in the doctoral program.. In
1967 he formed his own market research company in London with an
American partner and conducted studies in all parts of the world. In
1972 he joined RJR Tobacco as the International Research Director. He
worked for RJR until 1990, living in many locations including Geneva,
Hong Kong, Toronto, and North Carolina His roles included Executive
Vice President Marketing, RJR Tobacco International; President and
CEO, RJR Canada; and Executive Vice President US Operations
responsible for Marketing, R and D, Manufacturing, and various free-
standing subsidiaries. He joined Northwest Airlines in 1990 as
Executive Vice President Marketing, Sales, and Strategic Planning. He
has taught international marketing courses at the Babcock Graduate
School of Business Management at Wake Forest University, and is
currently teaching at the Fuqua Graduate School of Business at Duke
University in North Carolina, while continuing to serve his key
clients. Peter Hoult graduated from the University of Reading with an
Upper Second Honours degree in Psychology in 1965 and he has completed
the course work for a doctorate at the London School of Economics. Mr.
Hoult has assured the Board of Directors that his other business shall
not be in conflict with the interest of the Company.
5) Directorships Held In Reporting Companies:
Donald B. Hathaway Qnetix Inc. (Chairman), Alberta Stock Exchange
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B Significant Employees:
1) Name Age 2)Position 3)Term Time Served
Shabir Gova 32 VP, Technology 24 mo., 6 mo.
Gary S. Johnson 38 VP Marketing 24 mo., 6 mo.
Susan MacStravick 49 Dir.,Investor Relations 24 mo., 6 mo.
4) Business Experience:
Shabir Gova B.Sc., P. Eng., 32, has been Vice President, Technology of
the company since April 5, 1998. From 1990 to 1998, Mr. Gova worked
for Shlumberger Systems & Services Canada Limited, and has held the
following positions, Design engineer, Senior Design Engineer, Manager,
Systems Services & Development, Manager, Technology and Development -
Canada, Director, Information Technology - Canada. Mr. Gova, has
progressive experience in Software/ Firmware systems design and
development, Interactive DOS and Windows based software applications
(employing an object- oriented framework) used to remotely program,
read and provide a graphical analysis of data gathered by monitoring
devices. Real time multitasking embedded systems used for high-speed
data acquisition and storage. Graphical User Interfaces used as a
front -end for various existing software applications. C++ Class
Libraries used as the core technology for software under development.
From 1989 to 1990 Mr. Gova was Software Development & Systems Support
Analyst, for IBM Canada Limited. Mr. Gova was responsible for
automation of the SIMM prototype fabrication laboratory. Mr. Gova
received an Honours Bachelor of Applied Science in Systems Design
Engineering, Options in Management Science and Computer Engineering,
from the University of Waterloo, Ontario, Canada. Mr. Gova is a member
of the IEEE.
Gary S. Johnson, MBA, B.Sc., 38, has been Vice President, Marketing of
the company since April 5,1998. From 1996 to 1998, Mr. Johnson was
Marketing Manager, Ontario Hydro Technologies the largest electrical
technologies provider in North America. Mr. Johnson was responsible
for rapid growth in providing technology services to the electric
utility industry in the U.S., Mexico and Canada. From 1989 to 1996 Mr.
Johnson worked for Schlumberger Limited, Electricity Division a world
leader in the metering industry. He started his career with
Schlumberger as Product Manager Core Products and Automatic Meter
Reading Technology (AMR). He was responsible for electromechanical
meters and remote communication meter technology. In 1991, he was
appointed too the position of Marketing Manager, where he was
responsible for the launch of electronic metering and (AMR) in Canada.
In 1994, Mr. Johnson was appointed to the position of Director,
Utility Services Group. He was responsible for P&L, 142 employees, and
Contracting services to electricity, water and gas utilities across
Canada. From 1988 to 1989, Mr. Johnson was the Marketing Manager Semi-
conductors Philips electronics Limited. He was responsible for the
development and implementation of strategic plans for 14 major semi-
conductor component product lines, and sales support to companies such
as Northern Telecom, Ford electronics. Mr. Johnson received his MBA,
and B.Sc. Electrical Engineering from Queens University in Kingston,
Ontario, Canada.
Susan Boyd MacStravick Hon. B. A., 49 has been the Director of
Investment Relations of the Company since April 5,1998. From 1987 to
1998, Ms. Boyd McStravick was President of Susan Boyd Associates
contracted as Editor of The Mariposa Group, Vista Communications, The
Sonar Group, and The Hughes Group. From 1985 to 1987, Ms. Boyd
McStravick was Vice President of Clarendon Communications Ltd. From
1984 to 1985 Ms. Boyd McStravick was Manager of National Media
Relations, Mc Master University. From 1972 to 1983 Ms. Boyd
MacStravick was Information Officer, then Director of Public Affairs
and Media Relations, University of Western Ontario. Ms. Boyd
MacStravick's, assignment experience includes, producing video
scripts, investor relations and communications, advisor work for the
Toronto Stock Exchange, analysts for the financial community in pre
and post offering phases for new equity issues aimed at gaining
national and international media coverage. Her focus was Canadian and
American high tech and resource companies (e.g. Robert Freidland,
Gemini Technologies). Ms. Boyd MacStravick has written and edited
magazines, newsletters and brochures. Her media relations clients
include HRH Prince Phillip, Malcolm Muggeridge, Germaine Greer,
Margaret Mead, William F. Buckley,
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<PAGE>
Jr., Alvin Toffer and Ralph Nader. Ms. Boyd MacStravick organized
and orchestrated international media attendance, coverage, daily
multiple press conferences (300 plus senior writers and editors)
for 7,000 scientists attending Sixth International Congress of
Immunology (1986), and Sixth International Congress of Genetics
(1988). Ms. Boyd MacStravick, provided investor support for Second
Century Fund's multi-million dollar capital campaign for University
of Western Ontario, and devised ground breaking marketing materials
for it's launch. Ms. Boyd devised a communication strategy for a
major multi-national pharmaceutical company that included writing
speeches for senior management to stem a potentially disruptive
corporate merger. Ms. Boyd MacStravick received her Hon. B.A.,
form University of Toronto 1971, Postgrad Journalism Diploma,
from University of Western Ontario 1972, (UWO Ivey School of Business,
Marketing Management 1979). Ms. Boyd MacStravick has assured the
Board of Directors that her other business shall not be in conflict
with the interest of the Company.
C) Family Relationships: N/A
D) Involvement in Certain Legal Proceedings:
1) Bankruptcy: N/A
2) Criminal Proceedings: N/A
3) Being Subject to any Order, Judgment, or Decree: N/A
4) Being found by a court of competent jurisdiction (in a civil
action) the Commission on the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and
the judgment has not been reversed, suspended, or vacated: N/A
ITEM 6. EXECUTIVE COMPENSATION
The Officers of the company currently are forgoing their compensation
until which time the Company has raised sufficient capital to fund the
anticipated compensation.
Summary Compensation Table
Annual Compensation Long Term Comp.
A B C D E F
Other Restricted
Name and Annual Stock
Principal Com- Awards
Position Year Salary $ Bonus $ pensation $000.1
Sydney Harland 98 0 0 0 0
Peter Ross 98 0 0 0 28,750
Mark Miziolek 98 0 0 0 12,500
6) Definitions:
Incentive Compensation Plan
16
<PAGE>
Equity Incentive Plan:
On June 20,1998 the Company adopted the Equity Incentive Plan (the
"Equity Plan"). The purpose of the Equity Plan is to provide
directors, officers and certain key employees with additional
incentives by increasing their proprietary interest in the Company.
As of June 20,1998, there were 4,500,000shares of Common Stock
reserved for issuance under the Equity Plan pursuant to stock options
and stock awards. Options granted under the Equity Plan may be either
Incentive Stock Options (as defined in the Internal Revenue Code of
1986, as amended) or Options which do not qualify as incentive stock
options ("Non-Qualified Options"). The exercise price of all Incentive
Stock Options granted under the Equity Plan may not be less than the
fair market value of the underlying Common Stock at the date of grant.
In the event that an optionee owns more than 10% of the voting power
or value of all classes of stock of the Company, the minimum exercise
price of the Incentive Stock Option may not be less than 110% of the
market value of the underlying Common Stock at the date of grant. No
Option may be exercised after 10 years from the date of grant (5 years
for optionees who are greater than 10% stockholders). The Equity Plan
will be administered by a committee of two or more non-employee
members of the Company's Board of Directors. Options are transferable
only with the written approval of the Committee. An option to purchase
1,969,998 Shares of the Company's Common Stock has been granted to the
Founders, Directors, Executive Officers and certain consultants of the
Company. The options have a term of five (5) years and vested upon
the date of grant. It was resolved to issue to the founders,
Directors, and Officers a pro-rata increase in their respective
shareholdings of twenty-five in response to progress in meeting
corporate goals related to key milestones in the development and
testing of the technology, securing a test site with a major Class I
Railway, in operations, and in the raising of capital. SEE: options
SAR Grants table elsewhere within.
NOTE: see Options/SAR Grants Table re: 500,000 shares granted to
consultants elsewhere within.
Under the Equity Plan, a director who is not otherwise an employee of
the Company ("Non-Employee Director") is granted in July of each year
that he serves as a director, a Non-Qualified option to Purchase
10,000 shares of Common Stock at an exercise price equal to the fair
market value of the underlying Common Stock at the date of grant. Each
option is for a term of ten years and can be exercised immediately.
Except for the foregoing, non-employee directors are not otherwise
eligible to receive options, awards or other rights under the Equity
Plan.
The Equity Plan also provides that the officers, independent
contractors, consultants and employees of the Company may receive,
without payment, awards of Common Stock, cash or a combination thereof
in respect of the attainment of certain performance goals determined
by the Board of Directors, under the Incentive Compensation Plan or
otherwise.
The Equity Plan also provides that stock appreciation and depreciation
rights may be granted in tandem with, or independently of, options
granted under the Equity Incentive Plan (except for non-employee
directors). However, stock appreciation rights granted in tandem with
an Incentive Stock Option may be granted only at the time such option
is granted, and Stock depreciation rights may not be granted in
connection with an Incentive Stock Option.
Under the Equity Plan, participants in the Equity Incentive Plan other
than non-employee directors may be granted the right to exercise
their options by surrendering all or part of the option (to the extent
then exercisable) and receive in exchange an amount payable by the
Company in cash or Common Stock (valued at the then fair market value)
or a combination thereof equal to the excess of the then fair market
value of the shares issuable upon exercise of the option or portion
thereof surrendered over the exercise price of the option or portion
thereof surrendered. Generally, options that are exercisable at death
or disability or termination for cause may be exercised at any time
prior to the expiration of the option but not more than three months
after the date of termination, unless the option has vested.
On June 20, 1998 the Company adopted the Incentive Compensation Plan
(the "Incentive Plan"). The purpose of the Incentive Plan is to
attract, motivate and retain key employees of the Company. Employees
of the Company are eligible to participate in the Incentive Plan. Each
participant shall be eligible to receive a
17
<PAGE>
performance award under the plan as computed on measured
performance, equal to a predetermined percentage of annual
salary at the beginning of the Company's fiscal year. The
maximum eligible award by component is: profit performance - 50%,
budget discipline - 30%, subjective - 20%. The profit performance
segment relates directly to the achievement of certain goals
set at the beginning of the year. The budget discipline segment
is based on the approved budget for the year. The subjective segment
relates to the total performance of the participant as determined by
the Chief Executive Officer and/or the Board of Directors. No profit
performance award will be given if the Company does not achieve at
least 80% of its profit plan for the year. The Board of Directors
reserves the right to modify, change and/or delete components or the
entire Incentive Compensation Plan. Consultants and/or other
independent contractors may be eligible to participate in the
Incentive Compensation Plan.
(7) Location of specified Information: N/A
B) Summary Compensation Table: N/A
C) Option/SAR Grants Table:
NOTE: CERTAIN COMPANY CONSULTANTS WERE GRANTED 500,000 COMMON
SHARES AT $000.1 SUBJECT TO THE TERMS OF THE COMPANYS CONTRACT WITH
IDAHO CONSULTING SERVICES, INC. THE GRANTS EXPIRE JULY 1, 2003 AND
ARE SUBJECT TO A TWO YEAR LOCK-UP AGREEMENT. (SEE: LOCK-UP AGREEMENT
ELSEWHERE WITHIN.)
Security ownership and options/SAR Grants CO-Founders:
(1) (2) (3) (4)
Name and Address Amount and Option/SAR
Title of of Beneficial Nature of Grants @ $0.11
Class Owner Beneficial
Owner
Common Sydney Harland CO-Founder Grants @ $0.11
2155 Winchester Court, 4,520,239 1,130,069
Burlington Ontario, Canada, Expires on 2/18/04
L7P 3M7
Common Donald Hathaway CO-Founder Grants @ $0.11
5964 Ninth Line, Erin, 750,500 187,625
Ontario, Canada, N0B 1T0 Expires on 2/18/04
Security ownership and options/SAR Grants of Directors and Officers:
(1) (2) (3) (4)
Title of Name and Address Amount and Option/SAR
Class of Beneficial Nature of Grants @ $0.10
Owner Beneficial
Owner
Common Peter Ross President & Grants @ $0.10
276 Chartwell, Oakville, COO 36,023
Ontario, Canada, L6J 3Z9 144,250 Expires on 2/18/04
Common Mark P. Miziolek CFO & Grants @ $0.10
1450 Bayshire Drive, Treasurer 15,750
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Oakville, Ontario, Canada, 63,000 Expires on 2/18/04
L6H 6E7
Common John Andrews Director Grants @ $0.10
109 Lamplighter Lane 100,500 25,125
Pontevedra, Fl 32082 Expires on 2/18/04
Common Patrick R. Shea Director Grants @ $0.10
944 North Russell Road, 100,500 25,125
Russell, Ontario. K4R 1C7 Expires on 2/18/04
Common Robert M. Esecson Director Grants @ $0.10
5964 Ninth Line, Erin, 100,500 25,125
Ontario, Canada, N0B 1T0 Expires on 2/18/04
Common Peter Hoult Director Grants @ $0.10
110 East 55th Street 100,500 25,125
11th floor Expires on 2/18/04
NY, NY 10022
D) Aggregated Option/SAR Exercises and Fiscal Year-End Options/SAR Value
Table: N/A
E) Long Term Incentive Plan ("LTIP") Awards Table: N/A
F) Compensation of Directors:
1) Standard Arrangements:
1. Term
Directors are appointed for a term of twenty-four(24) months, to
commence upon the date of your acceptance of the Appointment.
2. Compensation
Save and except for the share options set out below and 100,000 common
shares of the Company at a nominal value you shall receive no
compensation for your services or efforts as a Director. Provided that
should you, for any reason resign your Directorship prior to the
expiration of the term of your appointment hereunder, the Company has
the right to repurchase and you must sell to the Company all of these
100,000 common shares at their par value.
3. Expenses
Directors will be forthwith reimbursed by the Company for all expenses
incurred in the course of fulfilling there duties as a Director,
including the full cost of travel, food and hotel accommodation
associated with your attendance at meetings of the Board of Directors.
4. Share Option Plan
Each Director shall be entitled to purchase fifty thousand (50,000)
common shares of the Company at fair market value per share, for each
year of the Term that the Director completes as a Director, however, the
19
<PAGE>
shares which underlay the option referable to any given year do
not vest in the Director until the expiry of that year. Should the
Director resign the position of Director or should his or her
Appointment be terminated prior to the completion of any given year,
then the shares referable to that year shall be forfeited upon
repayment to the Director of the cost of exercising the option for
that year.
5. Attendance at Board Meetings
Directors are required to attend all Board Meeting. Absence from any
two (2) consecutive Board Meetings shall constitute the tendering of
the Directors resignation from the Board.
Under the Equity Plan, a director who is not otherwise an employee of
the Company ("Non-Employee Director") is granted in July of each year
that he serves as a director, a Non-Qualified option to Purchase
10,000 shares of Common Stock at an exercise price equal to the fair
market value of the underlying Common Stock at the date of grant. Each
option is for a term of ten years and can be exercised immediately.
Except for the foregoing, non-employee directors are not otherwise
eligible to receive options, awards or other rights under the Equity
Plan.
2) Other Arrangements: N/A
Employment Contracts and Termination of Employment and in-control
arrangements.
The Company has entered into employment contracts with its Executive
Officers. The terms of the contracts provide for provisions to
terminate the parties at any time as stipulated under the conditions
of their individual contracts. Mr. Harland's contract is for a term of
5 years and he is to be compensated in the amount of $100,000 per year
plus bonus. Mr. Ross is contracted for 2 years and is to be
compensated in the amount of $61,000 per year plus quarterly stock
options. Mr. Miziolek is compensated in the amount of $45,00 per year
plus semi-annual stock options. The compensation packages of the
Officers shall be reviewed from time to time by the Directors of the
Company. The Officers have agreed to forgo Compensation until the
Company is successful in raising initial financing in the amount of
$1,000,000
1)Employment Contracts Executive Officers
Sydney Harland see: Exhibits
Peter Ross see: Exhibits
Mark Miziolek see: Exhibits
2)Reports on re-pricing of options/SARs. N/A
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, a developmental-stage company, was incorporated in New
Hampshire on May 4, 1998. The Company was formed to manufacture and
sell railway level crossings to the railroad industry. The Company
may be deemed a successor company, in fact, to Ameri-Can Equipment
Sales and Leasing, Inc. (the "Predecessor"), a Canadian corporation,.
Accordingly, the financial statements of the Predecessor are included
elsewhere herein. The Company and the deemed Predecessor have common
ownership. In management's opinion, ARS does not have, in fact, a
Predecessor. On May 11,1998 the Company acquired certain assets, from
the deemed Predecessor, such as, the assignment of outstanding
proposals, purchase orders and other agreements, relationships and
goodwill in exchange 50,000 shares of its Common Stock The Company's
principal shareholder was the principal shareholder of the deemed
Predecessor. Additionally, the Company, issued to the principal
shareholder 4,520,239 shares of its $0.0001 par value, Common Stock,
these shares, were issued, in reliance on the "private placement"
exemption under the Securities Act of 1933, as amended
20
<PAGE>
("the Act"), in exchange for certain assets, including the assignment
of patents and a non-compete agreement. The transaction was accounted
for under the Purchase Method of Accounting.
On June 1, 1998, subject to the Company's due diligence, the Company
issued 1,555,000 shares of Common Stock $0.0001 par value per share to
its Officers, Directors some of which the Company deems to be
founders, and certain initial investors for $5,000 cash and other
valuable considerations. These shares, were issued, in reliance on
the "private placement" exemption under the Securities Act of 1933, as
amended ("the Act"), and the exemption from registration under
Section 4(2) of the Securities Act. See "Risk Factors--Shares
Eligible for Future Sale" and "Principal Shareholders" herein, as to
4,520,239 shares issued to a person who may be deemed to be
"affiliates" of the Company or defined in Rule 405 under the
Securities Act of 1933, although such person does not hereby admit
that they are affiliates.
ITEM 8. LEGAL PROCEEDING:
A) None
B) None
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
A)Market Information:
Principal markets where Stock is traded:
There is no trading market for the Common Stock, and no assurances can
be given that a trading market will develop or continue. If no market
develops, it may be difficult or impossible for holders of shares to
sell them.
(i) N/A
(ii) N/A
2) (i) 4,700,000 common shares
(ii) N/A
(iii) 895,000 common shares
B) Holders of each class of common equity: 70
C) Dividends: N/A
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEED FORM
REGISTERED SECURITIES
Question 1-5
On May 11,1998 the Company acquired certain assets, from the deemed
Predecessor, such as, the assignment of outstanding proposals,
purchase orders and other agreements, relationships and goodwill in exchange
21
<PAGE>
for 50,000 shares of its Common Stock The Company's principal
shareholder was the principal shareholder of the deemed Predecessor.
Additionally, the Company, issued to the principal shareholder
4,520,239 shares of its $0.0001 par value, Common Stock, these shares,
were issued, in reliance on the "private placement" exemption under
the Securities Act of 1933, as amended ("the Act"), in exchange for
certain assets, including the assignment of patents and a non-
compete agreement. The transaction was accounted for under the
Purchase Method of Accounting.
On June 1, 1998, subject to the Company's due diligence, the Company
issued 1,555,000 shares of Common Stock $0.0001 par value per share to
its Officers, Directors some of which the Company deems to be
founders, and certain initial investors for $5,000 cash and other
valuable considerations. These shares, were issued, in reliance on
the "private placement" exemption under the Securities Act of 1933, as
amended ("the Act"), and the exemption from registration under Section
4(2) of the Securities Act.
June 20,1998 the Company had sold approximately 1,915,000 shares of
Common Stock pursuant to Regulation D, Rule 504, with proceeds of
approximately $192 before expenses.
November 10, 1998 the Company had sold approximately 1,000,000 shares
of Common Stock pursuant to Regulation D, Rule 504, with proceeds of
approximately $100,000 before expenses.
On February 1,1999 the Board of Directors authorized the Company to
issue 100,000 units. See Description of "Units" included elsewhere
herein.(which is hereby being offered) for the purpose of raising up
to $100,000, before expenses, through a sale of the Common Stock
pursuant to Regulation D, Rule 504.
The Company's directors and officers, who do not receive compensation
for such efforts, make this offering. The Company does not have an
underwriter or selling agent. It reserves the right to engage one or
more licensed brokers or dealers for a sales commission up to 10% plus
a 3% non-accountable due diligence and expense allowance, and to pay
up to a 5% finder's fee, to the extent lawful. Any such payments
would reduce the net proceeds to the Company. The Shares are offered
on a "best efforts" basis subject to no minimum sale proceeds. The
Company sold securities to Accredited and Non-accredited investors.
This Offering was made under an exemption from registration provided
by Rule 504 of Regulation D under the United States Securities Act of
1933.
Question 6 N/A
ITEM 11. DESCRIPTION OF SECURITIES:
Common or Preferred shares
Common Stock
The Company is authorized to issue 50,000,000 shares of Common Stock,
$.0001 par value per share (the "Common Stock"). There are currently
9,826,489 shares of Common Stock outstanding of which 6,811,489 shares
of Common Stock is subject to a "Lock-up Agreement" described
elsewhere herein. Additionally, the outstanding Common Stock excludes
1,969,998 shares reserved for the issuance pursuant to the grant of
Common Stock options to the Founders, Directors, Executive Officers
and certain of the Company's consultants SEE : Options/SAR Grants
Table elsewhere within 200,000 shares of Common Stock which would be
issuable upon the exercise of all A and B Warrants.
Subject to any superior rights of any outstanding preferred stock of
the Company, the holders of Common Stock (i) have equal rights to
dividends from funds legally available therefor, when as and if
declared by the Board of Directors of the Company; (ii) are entitled
to share ratably in all of the assets of the Company available for
distribution to holders of Common Stock upon liquidation, dissolution
or winding up of the affairs of the Company; (iii) do not have
preemptive, subscription or conversion rights and there are no
22
<PAGE>
redemption or sinking fund provisions applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote at all meeting of shareholders. All of the
shares of Common Stock now outstanding are fully paid and non-
assessable and all shares of Common Stock which are the subject of
this Offering, when issued, will be fully paid and non-assessable.
Holders of Common Stock of the Company do not have cumulative voting
rights, which means that the holders of a majority of such outstanding
shares, voting for the election of directors, can elect all of the
directors to be elected by the holders of the Common Stock if they so
choose and, in such event, the holders of the remaining shares will
not be able to elect any of the Company's directors.
Warrants
Each of the 100,000 Units being offered consists of one share of
Common Stock and one A Warrant and one B Warrant. Each A Warrant and B
Warrant is immediately detachable and separately tradable. Each A
Warrant evidences the right to purchase one share of Common Stock at a
price of $1.25 per share. Each B Warrant evidences the right to
purchase one share of Common Stock at a price of $1.75 per share. The
A Warrants and the B Warrants may be exercised for a 60-month period
commencing May 30, 1999. The A and B Warrants' exercise prices and
number and kind of Common Stock or other securities and properties to
be obtained upon exercise of the Warrants are subject to adjustments
in the event of stock dividends on, or a subdivision, (stock split) of
or consolidation (reverse stock split) of the Common Stock, or the
issuance of certain rights or warrants to all holders of its Common
Stock to purchase Common Stock at less than market price or upon other
distributions (other than cash dividends) to all holders of Common
Stock.
All the A and B Warrants are redeemable by the Company commencing upon
written notice of not less than 30 days, at a redemption price of
$0.02 per Warrant. Any Warrant so called, and not exercised by the
time and date (the close of business on the business day prior to
redemption) as specified in the redemption notice, will expire on the
books of the Company and will have no value thereafter except the
right to receive the redemption price upon surrender by the redemption
unless a later date is stated in the notice.
The Warrants are exercisable by tendering to Atlas Stock Transfer,
5899 South State Street, Salt Lake City, Utah 84107 (the "Warrant
Agent") the appropriate exercise price along with the Warrant
Certificate (with the Election to Purchase section on the reverse side
of the Certificate properly filled out). The Company shall then issue
and sell fully paid and non-assessable Common Stock to the Warrant
holder as specified on the Certificate so tendered. Payment of the
exercise price shall be made by certified check or bank draft made
payable to the order of the Company. Holders of the Company's A
Warrants and B Warrants, however, may not exercise such Warrants
unless, at the time of exercise, a registration statement registering
the shares of Common Stock issuable upon exercise of such Warrants is
effective and such shares have been registered under the Securities
Act and are qualified or are exempt under the securities laws of the
state of residence of the holder thereof. The Company intends to file
with the Securities and Exchange Commission a registration statement
registering the shares of Common Stock underlying such warrants and
intends to have such registration statement become effective. However,
there can be no assurances that such a registration statement shall
become effective. For further information, reference is made to the
Warrant Agreement, a copy of which may be obtained from the Company.
There is no established trading market for the A Warrants and the B
Warrants and the Company does not expect that such a market will
develop, or that any such market that may develop will be sustained.
In general, Warrants may be anticipated (but are not guaranteed) to
have a value roughly equal to the excess (if any) of the Common Stock
trading price (if any) above the Warrant's exercise price. However, a
redemption call may reduce any such value to an extent that cannot be
determined in advance, depending upon the supply of and demand (if
any) for the Warrants.
The holders of the A Warrants and the B Warrants will not have any of
the rights or privileges of shareholders of the Company (except to the
extent they own Common Stock of the Company) prior to the exercise of
the A Warrants and/or B Warrants.
23
<PAGE>
Preferred Stock
The Preferred Stock may be issued from time to time in one or more
classes or series, each class or series of which shall have the voting
rights, designations, preferences and relative rights as fixed by
resolution of the Company's Board of Directors, without the consent or
approval of the Company's shareholders. The Preferred Stock may rank
senior to the Common stock as to dividend rights, liquidation
preferences, or both, and may have extraordinary or limited voting
rights. There are currently no shares outstanding and no plans to
issue any.
Authorization and Discretionary Issuance of Preferred Stock. The
Company's Board of Directors may issue from time to time up to
25,000,000 shares of Preferred Stock without shareholders approval,
with dividends, liquidation, conversion, voting or other rights and
preferences which could adversely affect the voting power or other
rights of the holders of the Common Stock. The issuance of shares of
Preferred Stock could under certain circumstances make it more
difficult for a third party to gain control of the Company, discourage
bids for the Company's Common Stock at a premium, or otherwise
adversely affect the market price of the Common Stock. There are no
shares of Preferred Stock outstanding, and no present plans to issue
any. See "Description of Securities".
B) Debt Securities: N/A
Others Securities To Be Registered: N/A
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's charter or bylaws provide for the Company to defend,
protect and hold harmless its officers, directors and employees from
any lawsuits, legal action and or other actions which may result from
the officers, directors and employees discharging their legal duties.
ITEM 13. FINANCIAL STATEMENTS
Exhibit No.1 See Index
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
Not Applicable
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
24
<PAGE>
10SB
2. Plan of acquisition, reorg.,
arrgmnt, liquid. or succession. None in Place
3.(i) Articles of Incorporation
(ii) By-laws Exhibit No.2 See Index
4. Instruments defining the rights
of holders, include. indentures N/A
5. Opinion re: legality Exhibit No.3 See Index
6. No exhibit required
7. Opinion re: liquidation preference N/A
9. Voting trust agreement NONE
10. Material contracts Exhibits No. 4 See Index
11. Statement re: computation of per N/A
share earnings
12. No exhibit required
14. Material foreign patents N/A
15. Letter on change in certifying
accountant N/A
21. Subsidiaries of the registrant NONE
23. Auditor's Consent Exhibit No. 23 - See Index
24. Power of attorney N/A
27. Financial Data Schedule Exhibit No. 27 - See Index
99. Additional Exhibits N/A
25
<PAGE>
EXHIBITS INDEX
Exhibit No. 1 Financial Statements for Ameri-can Railway Systems,
Incorporated and the Predecessor Ameri-can Equipment
Sales and Leasing, Inc.
Exhibit No. 2 (i) Articles of Incorporation dated: May 4th 1998.
(ii) By-laws.
Exhibit No. 3 Opinion re: legality.
Exhibit No. 4 Material contracts.
Contract with Idaho Consulting services, Inc.
Consulting Agreement, Ameri-can Inc.
Consultant Agreement, Peter Ross Associates
Appointment Letter, Mark P. Miziolek
Service,Agreements, Shabir Gova
Service Agreement, Gary Johnson
Service Agreement, Susan MacStravick
Board Appointment, Don Hathaway
Board Appointment, Patrick Shea
Board Appointment, Robert Esecson
Board Appointment, Peter Hoult
Board Appointment, John Andrews
Lock-up Agreements, Officers, Directors and
Significant (Consultants) Employees
Non-compete Agreements, Officers, Directors and
significant (Consultants) Employees
License Agreement Sydney Harland to Ameri-can
Railway Systems, Incorporated
Patent Application confirmation
Ameri-can transfer of assets to Ameri-can
Railway Systems, Incorporated
Exhibit No. 23 Auditor's Consent
Exhibit No. 27 Financial Data Schedule
26
F E L D H A M M E R
F I S H M A N
C 0 M P T A B L E S A G R E E S
C H A R T E R E D A C C 0 U N T A N T S
REVIEW ENGAGEMENT REPORT
To the Shareholder of
AMERI-CAN EQUIPMENT SALES & LEASING INC.
We have reviewed the balance sheet of AMERI-CAN EQUIPMENT SALES &
LEASING INC. as at January 31, 1997 and the statements of
earnings, deficit and changes in financial position for the year
then ended. Our review was made in accordance with generally
accepted standards for review engagements and accordingly
consisted primarily of enquiry, analytical procedures and
discussion related to information supplied to us by the company.
A review does not constitute an audit and consequently we do not
express an audit opinion on these financial statements.
Based on our review, nothing has come to our attention that causes
us to believe that these financial statements are not, in all
material respects, in accordance with generally accepted
accounting principles.
/s/ Feldhammer Fishman
Chartered Accountants
Montreal, Quebec
March 31, 1997
Feldhammer Fishman S.E.N.C.
5050 De Sorel, Suite 110, Montreal, Quebec, Canada H4P 1G5
Tel. (514) 735-5375 Fax: (514) 738-8137 Internet: [email protected]
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
STATEMENT OF EARNINGS
FOR THE YEAR ENDED JANUARY 31, 1997
(Unaudited)
1997 1996
SALES $ 286,908 $ 190,071
COST OF SALES 149,685 97,054
---------- ----------
GROSS PROFIT 137,223 93,017
---------- ----------
EXPENSES (Schedule)
Selling 41,807 30,206
Administrative 88,340 59,760
Financial 1,604 2,043
---------- ----------
131,751 92,009
---------- ----------
EARNINGS BEFORE INCOME TAXES 5,472 1,008
Provision for income taxes 1,221 356
---------- ----------
NET EARNINGS 4,251 $ 652
========== ==========
See accompanying notes
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
(Incorporated under the Canada Business Corporations Act)
BALANCE SHEET
AS AT JANUARY 31, 1997
(Unaudited)
1997 1996
ASSETS
CURRENT
Cash $ - $ 3,288
Accounts receivable 21,454 13,868
--------- ---------
21,454 17,156
--------- ---------
CAPITAL ASSETS (Note 2) 11,879 15,946
--------- ---------
$ 33,333 $ 33,102
========= =========
LIABILITIES
CURRENT
Bank overdraft $ 3,418 $ -
Accounts payable and accruals 64,425 88,760
Income taxes payable 1,221 356
Due to affiliated company 44,100 -
Current portion of long-term debt - 4,068
--------- ---------
113,164 93,184
--------- ---------
SHAREHOLDER'S DEFICIENCY
SHARE CAPITAL (Note 4) 200 200
DEFICIT (80,031) (60,282)
--------- ---------
(79,831) (60,082)
--------- ---------
$ 33,333 33,102
========= =========
See accompanying notes
Approved:
________________________ Director
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
STATEMENT OF DEFICIT
FOR THE YEAR ENDED JANUARY 31, 1997
(Unaudited)
1997 1996
BALANCE - BEGINNING $ (60,282) $ (45,934)
Net earnings 4,251 652
---------- ----------
(56,031) (45,282)
Dividend paid (24,000) (15,000)
---------- ----------
BALANCE - ENDING $ (80,031) $ (60,282)
========== ==========
See accompanying notes
<PAGE>
<TABLE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED JANUARY 31, 1997
(Unaudited)
<CAPTION>
1997 1996
CASH PROVIDED BY (USED IN)
THE FOLLOWING ACTIVITIES:
<S> <C> <C>
OPERATING
Net earnings $ 4,251 $ 652
Item not affecting cash:
Depreciation of capital assets 4,067 5,556
--------- ---------
8,318 6,208
Change in non-cash operating assets and liabilities (31,056) (35,861)
--------- ---------
(22,738) (29,653)
--------- ---------
FINANCING
Net change in loans to or from affiliated company 44,100 68,288
Net change in loans from shareholder - (15,457)
Repayments of lien payable (4,068) (5,583)
--------- ---------
40,032 47,248
--------- ---------
DIVIDEND PAID (24,000) (15,000)
--------- ---------
NET CHANGE IN CASH (6,706) 2,595
CASH POSITION - BEGINNING 3,288 693
--------- ---------
CASH POSITION - ENDING $ (3,418) $ 3,288
========== =========
See accompanying notes
</TABLE>
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
SCHEDULE OF EXPENSES
FOR THE YEAR ENDED JANUARY 31, 1997
(Unaudited)
1997 1996
SELLING
Automotive $ 16,951 $ 12,723
Commission agents 262 1,100
Promotion 2,617 2,741
Travel 19,341 9,876
Depreciation of rolling stock 2,636 3,766
--------- ---------
$ 41,807 $ 30,206
========= =========
ADMINISTRATIVE
Consulting fees $ 5,000 $ 25,000
Insurance - 264
Office and general 18,071 9,832
Professional fees 3,019 8,550
Rent 7,875 8,400
Salaries and fringe benefits 48,322 -
Telecommunications 4,622 5,924
Depreciation of office furniture and equipment 1,431 1,790
--------- ---------
$ 88,340 $ 59,760
========= =========
FINANCIAL
Interest and bank charges $ 1,525 $ 1,276
Interest on long-term debt 79 767
--------- ---------
$ 1,604 $ 2,043
========= =========
See accompanying notes
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JANUARY 31, 1997
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Depreciation of Capital Assets:
Capital assets are depreciated on the diminishing balance method
at the following rates:
Office furniture and equipment 20%
Rolling stock 30%
<TABLE>
2. CAPITAL ASSETS
<CAPTION>
At Accumulated Net Book Value
Cost Depreciation 1997 1996
<S> <C> <C> <C> <C>
Office furniture and equipment $19,420 $13,692 $ 5,728 $ 7,159
Rolling stock 28,464 22,313 6,151 8,787
------- ------- ------- -------
$47,884 $36,005 $11,879 $15,946
======= ======= ======= =======
</TABLE>
3. SHARE CAPITAL
AUTHORIZED - Unlimited as to number and capital contribution.
Class "A" voting, participating shares.
Class "B" non-voting, participating shares.
Class "C" voting, non-participating shares which are
redeemable at the option of the corporation at their
paid-in amount.
Class "D" non-voting, non-participating shares which are
redeemable at the option of the corporation at their
paid-in amount.
Class "E" voting, non-participating shares which are
redeemable at the option of the holder at their paid-in
amount.
Class "F" non-voting, non-participating shares which are
redeemable at the option of the holder at their paid-in
amount.
ISSUED:
200 Class "A" shares $ 200
=======
<PAGE>
AUDITORS' REPORT
To the Shareholder of
AMERI-CAN EQUIPMENT SALES & LEASING INC.
We have audited the balance sheet of AMERI-CAN EQUIPMENT SALES &
LEASING INC. as at January 31, 1998 and the statements of earnings,
retained earnings and changes in financial position for the year then
ended. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with 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 the company as at January
31, 1998 and the results of its operations and the changes in its
financial position for the year then ended in accordance with
generally accepted Canadian accounting principles (which are in
conformity with generally accepted accounting principles in the United
States of America).
/s/ Feldhammer Fishman
Chartered Accountants
Montreal, Quebec
March 12, 1998
Feldhammer Fishman S.E.N.C.
5050 De Sorel, Suite 110, Montreal, Quebec, Canada H4P 1G5
Tel. (514) 735-5375 Fax: (514) 738-8137 Internet: [email protected]
<PAGE>
<TABLE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
(Incorporated under the Canada Business Corporations Act)
BALANCE SHEET
AS AT JANUARY 31, 1998
($US)
<CAPTION>
1998 1997
ASSETS
<S> <C> <C>
CURRENT
Accounts receivable (Net of allowance for uncollectable
amounts of $687) $ 7,177 $ 15,908
Advance receivable (Note 3) 4,808 -
---------- -----------
11,985 15,908
---------- -----------
CAPITAL ASSETS (Note 4) 6,639 8,799
---------- -----------
$ 18,624 $ 24,707
========== ===========
LIABILITIES
CURRENT
Bank overdraft (Note 5) $ 34,671 $ 2,534
Accounts payable and accruals 17,661 47,771
Income taxes payable 4,064 905
Due to affiliated company (Note 7) - 32,700
---------- -----------
56,396 83,910
SHAREHOLDER'S DEFICIENCY
SHARE CAPITAL (Note 6) 150 150
DEFICIT (37,922) (59,353)
---------- -----------
(37,772) (59,203)
---------- -----------
$ 18,624 $ 24,707
========== ===========
See accompanying notes
Approved:
_________________________ Director
</TABLE>
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
STATEMENT OF EARNINGS
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
1998 1997
SALES $ 190,126 $ 210,405
COST OF SALES 59,162 109,772
---------- ------------
GROSS PROFIT 130,964 100,633
---------- ------------
EXPENSES (Schedule)
Selling 59,250 30,659
Administrative 42,820 64,956
Financial 3,189 1,176
---------- ------------
105,259 96,791
---------- ------------
EARNINGS BEFORE INCOME TAXES 25,705 3,842
Provision for income taxes 4,274 895
---------- ------------
NET EARNINGS $ 21,431 $ 2,947
========== ============
See accompanying notes
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
STATEMENT OF DEFICIT
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
1998 1997
BALANCE - BEGINNING $ (59,353) $ (44,700)
Net earnings 21,431 2,947
------------- ---------------
(37,922) (41,753)
Dividend paid - (17,600)
------------- ---------------
BALANCE - ENDING $ (37,922) $ (59,353)
============= ===============
See accompanying notes
<PAGE>
<TABLE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
<CAPTION>
1998 1997
<S> <C> <C>
CASH PROVIDED BY (USED IN)
THE FOLLOWING ACTIVITIES:
OPERATING
Net earnings $ 21,431 $ 2,947
Item not affecting cash:
Depreciation of capital assets 2,160 2,983
------------- ------------
23,591 5,930
Change in non-cash operating assets and liabilities (23,028) (23,004)
------------- ------------
563 (17,074)
------------- ------------
FINANCING
Net change in loans to or from affiliated company (32,700) 32,700
Repayments of lien payable - (3,013)
------------- ------------
(32,700) 29,687
------------- ------------
DIVIDEND PAID - (17,600)
------------- ------------
NET CHANGE IN CASH (32,137) (4,987)
CASH POSITION - BEGINNING (2,534) 2,453
------------- ------------
CASH POSITION - ENDING $ (34,671) $ (2,534)
============= ============
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
SCHEDULE OF EXPENSES
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
<CAPTION>
1998 1997
<S> <C> <C>
SELLING
Automotive $ 14,551 $ 12,431
Commission agents - 192
Entertainment 1,887 1,919
Product promotion 23,273 -
Travel 18,206 14,184
Depreciation of rolling stock 1,333 1,933
---------- ----------
$ 59,250 $ 30,659
========== ==========
ADMINISTRATIVE
Casual labour (Note 7) $ 8,122 $ -
Consulting fees (Note 7) 14,447 3,667
Foreign exchange holding gain (4,054) -
Insurance 1,661 -
Office and general 5,798 13,423
Professional fees 6,057 2,214
Rent (Note 7) 4,334 5,775
Salaries and fringe benefits - 35,437
Telecommunications 5,628 3,390
Depreciation of office furniture and equipment 827 1,050
---------- ----------
$ 42,820 $ 64,956
========== ==========
FINANCIAL
Interest and bank charges $ 3,189 $ 1,118
Interest on long-term debt - 58
---------- ----------
$ 3,189 $ 1,176
========== ==========
See accompanying notes
</TABLE>
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
1. ORGANIZATION
The company was incorporated on February 12, 1987 under the Canada
Business Corporations Act. The main activity of the company is to
produce specialized equipment for sale to the railway industry. Syd
Harland, a Canadian resident, is the sole shareholder of the company.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Depreciation of Capital Assets:
Capital assets are depreciated on the diminishing balance method at
the following rates:
Office furniture and equipment 20%
Rolling stock 30%
b) Income Taxes:
The income taxes recorded in the financial statements represent current
taxes payable as there is no requirement for a provision for deferred
income taxes as there are no differences between income as reported in
the financial statements and income for tax purposes.
c) Translation of Financial Statements:
These financial statements have been converted from Canadian dollars to
American dollars. Revenue and expense items were converted at an
average rate for the year, 1.3844, while current assets and liabilities
were converted at the prevailing year end rate, 1.456, and the capital
assets at their historical rate of 1.35.
3. ADVANCE RECEIVABLE
The advance receivable was made to the son of the sole shareholder
of the company for services to be rendered in the upcoming fiscal year.
4. CAPITAL ASSETS
<TABLE>
<CAPTION>
At Accumulated Net Book Value
Cost Depreciation 1998 1997
<S> <C> <C> <C> <C>
Office furniture and equipment $ 14,385 $ 10,990 $ 3,395 $ 4,243
Rolling stock 21,084 17,840 3,244 4,556
--------- --------- --------- --------
$ 35,469 $ 28,830 $ 6,639 $ 8,799
========= ========= ========= ========
</TABLE>
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
5. BANK OVERDRAFT
The bank overdraft is secured by a $50,000 term deposit belonging to
the spouse of the sole shareholder of the company.
6. SHARE CAPITAL
AUTHORIZED- Unlimited as to number and capital contribution.
Class "A" voting, participating shares.
Class "B" non-voting, participating shares.
Class "C" voting, non-participating shares which are redeemable at
the option of the corporation at their paid-in amount.
Class "D" non-voting, non-participating shares which are redeemable
at the option of the corporation at their paid-in amount.
Class "E" voting, non-participating shares which are redeemable at
the option of the holder at their paid-in amount.
Class "F" non-voting, non-participating shares which are redeemable at
the option of the holder at their paid-in amount.
ISSUED:
200 Class "A" shares $ 150
======
<PAGE>
AMERI-CAN EQUIPMENT SALES & LEASING INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JANUARY 31, 1998
($US)
7. RELATED PARTY TRANSACTIONS
a) Casual Labour:
The casual labour charge was paid to the son of the sole shareholder of
the company for services rendered.
b) Consulting Fee:
The consulting fee was paid to the sole shareholder of the company.
c) Rent:
The sole shareholder of the company charged the business $2,600 for
use of his personal residence for work purposes.
d) Due to Affiliated Company:
The loan balance outstanding of $32,700, as at January 31, 1997 was
repaid during the year.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
We have audited the accompanying statement of financial condition
of AMERI-CAN RAILWAY SYSTEMS, INCORPORATED. (a development stage
entity) as at January 31, 1999 and the related statements of
operations, cash flows and changes in stockholders' equity from the
inception of incorporation, May 4, 1998 to January 31, 1999. These
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with 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. We believe this audit provides a reasonable
basis for our opinion.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at January
31, 1999 and the results of its operations and its cash flows and
changes in stockholders' equity from the inception of incorporation,
May 5, 1998 to January 31, 1999 in accordance with generally accepted
Canadian accounting principles (which conform to generally accepted
accounting principles in the United States of America).
The accompanying financial statements have been prepared assuming
that AMERI-CAN RAILWAY SYSTEMS, INCORPORATED will continue as a going
concern. As discussed in Note 2b to the financial statements, AMERI-CAN
RAILWAY SYSTEMS, INCORPORATED is a development stage entity and is
dependent upon the raising of equity capital, which raises
substantial doubt about its ability to continue as a going concern.
These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Feldhammer Fishman
Chartered Accountants
Montreal, Quebec
February 19, 1999
Feldhammer Fishman S.E.N.C.
5050 De Sorel, Suite 110, Montreal, Quebec, Canada H4P 1G5
Tel. (514) 735-5375 Fax: (514) 738-8137 Internet: [email protected]
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
STATEMENT OF OPERATIONS
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
SALES $ -
----------
EXPENSES
Bank charges 159
General 711
Rent 1,778
Telecommunications 1,338
----------
3,986
----------
NET LOSS $ (3,986)
==========
See accompanying notes
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
STATEMENT OF FINANCIAL CONDITION
AS AT JANUARY 31, 1999
($US)
ASSETS
CURRENT
Cash in bank $ 10,650
Subscriptions receivable 2,946
-------------
13,596
-------------
OTHER ASSETS
Deferred charges 95,208
Organization costs 452
Registration fee 4,975
Other assets (Note 4) 5,000
Non-compete agreements (Note 4) 1
Patents pending (Note 4) 50,000
-------------
155,636
-------------
$ 169,232
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 13,025
-------------
STOCKHOLDERS' EQUITY
Common stock (Note 3) 973
Contributed capital 159,220
Deficit - Net loss for the period (3,986)
-------------
156,207
-------------
$ 169,232
=============
See accompanying notes
Approved:
_________________________ Director
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
STATEMENT OF CASH FLOWS
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
CASH PROVIDED BY (USED IN)
THE FOLLOWING ACTIVITIES:
OPERATING
Net loss $ (3,986)
Change in non-cash operating assets and liabilities 13,025
--------------
9,039
--------------
INVESTING
Organization costs (452)
Deferred charges (95,208)
Registration fee (4,975)
Goodwill purchased (5,000)
Non-compete agreement (1)
Patents pending (50,000)
--------------
(155,636)
--------------
FINANCING
Subscriptions receivable (2,946)
Capital stock issued 973
Contributed capital 159,220
--------------
157,247
--------------
CASH POSITION - ENDING $ 10,650
==============
See accompanying notes
<PAGE>
<TABLE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
<CAPTION>
Total
Common Stock Contributed Deficit Stockholder
Shares Value Capital Equity
<S> <C> <C> <C> <C> <C>
Balance - Beginning - $ - $ - $ - $ -
Net loss - - - (3,986) (3,986)
Common stock for
acquisition of assets of
Ameri-can Equipment
Sales & Leasing Inc. 50,000 5 4,995 - 5,000
Common stock for
acquisition of patents and
non-compete agreement 4,520,239 452 49,549 - 50,001
Cash contributions 1,983,500 199 4,801 - 5,000
Common stock for
lock-up agreement 6,500 - - - -
Common stock for
service contracts 251,250 25 (25) - -
Common stock sold for
$0.0001 1,915,000 192 - - 192
Common stock sold for
$0.10 1,000,000 100 99,900 - 100,000
--------- ------- --------- --------- ---------
Balance - ending 9,726,489 $ 973 $159,220 $ (3,986) $156,207
========= ======= ========= ========= =========
See accompanying notes
</TABLE>
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
NOTES TO THE STATEMENT OF FINANCIAL CONDITION
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
1. ORGANIZATION
The company, incorporated on May 4, 1998 in New Hampshire, was
formed to manufacture and sell railway level crossings to the railroad
industry. The company is devoting all its efforts to establishing a
new business. Planned principal operations have not yet started.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
INFORMATION
a) Stock Based Compensation
The Financial Accounting Standards Board (FASB) recently issued
Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation." This new standard
encourages, but does not require, companies to recognize compensation
expense for grants of stock, stock options, and other equity
instruments based on a fair-value method of accounting.
Companies that do not choose to adopt new expense recognition
rules of SFAS No. 123 will continue to apply the existing accounting
rules contained in Accounting Principles Board Opinion (APBO) No. 25,
but will be required to provide proforma disclosures of the
compensation expense determined under the fair-value provisions of
SFAS No. 123, if material. APBO No. 25 requires no recognition of
compensation expense for most of the stock-based compensation
arrangements provided by the Company, namely, option grants where the
exercise price is equal to the market price at the date of the grant.
The Company has adopted the disclosure provisions of SFAS No.
123 effective June 30, 1998. The Company has opted to follow the
accounting provisions of APBA No. 25 for stock-based compensation and
to furnish the proforma disclosures required under SFAS No. 123.
b) Going Concern
The accompanying statement of financial condition has been
prepared on a going concern basis which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business. The Company's continuation as a going concern is dependant
upon its ability to raise capital from outside sources.
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
NOTES TO THE STATEMENT OF FINANCIAL CONDITION
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
INFORMATION (CONT'D)
c) New Accounting Standards
The Financial Accounting Standards Board recently issued
Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings
Per Share." This statement specifies the computation, presentation,
and disclosure requirements for earnings per share for entities
with publicly held common stock. SFAS No. 128 supersedes the
provisions of APB No. 15, and requires the presentation of basic
earnings per share and diluted earnings per share.
The Company is required to adopt the provisions of SFAS No. 128
beginning on June 30, 1998. Management does not believe the adoption
of this standard will have a material effect on the financial
statements.
d) Offering Costs
Offering costs will be capitalized as incurred and will be
recognized as a reduction of the gross proceeds of the Company's
offering of its common stock. If the offering is deemed unsuccessful,
any such costs incurred will be expensed in the period the offering is
deemed unsuccessful.
e) Revenue Recognition:
Revenue is to be recognized when product is shipped FOB shipping
point.
f) Income Taxes
The company will account for income taxes using the asset and
liability method as required by FAS 109. Deferred income taxes will
reflect the net tax effect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
g) Fixed Assets
Fixed assets additions will be capitalized at cost and amortized
over their expected useful lives.
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
NOTES TO THE STATEMENT OF FINANCIAL CONDITION
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
INFORMATION (CONT'D)
h) Deferred Charges
The company has incurred certain consulting and professional
fees as well as some product development costs. These amounts have
been accounted for as deferred charges and will not be expensed until
the Company commences operations. When the Company starts operations
these amounts will be amortized over five years.
3. CAPITAL STOCK
AUTHORIZED:
50,000,000 Common shares at $0.0001 par value.
25,000,000 Preferred shares at $0.0001 par value.
ISSUED
9,726,489 Common shares $ 973
=========
4. RELATED PARTY TRANSACTIONS
The Company purchased patents and entered into a non-compete
agreement with the Chairman and principal shareholder of the Company
for which he received 4,520,239 shares of common stock of the Company.
The patents were acquired for $50,000 and the non-compete agreement
for a nominal value of $1.
The Company acquired certain assets from Ameri-Can Equipment &
Leasing Inc. (a company owned by the Chairman and principal
shareholder of the company) for 50,000 shares of the Company's common
stock valued at $5,000 representing acquired purchase orders,
contracts and goodwill (reflected as "other assets" in the balance
sheet).
Other officers, directors and management of the Company
purchased their stock for $5,000 plus entering into a non-compete
agreement for which no value was given on the financial statements.
<PAGE>
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
(A Development Stage Corporation)
NOTES TO THE STATEMENT OF FINANCIAL CONDITION
FROM THE INCEPTION OF INCORPORATION
MAY 4, 1998 TO JANUARY 31, 1999
($US)
4. RELATED PARTY TRANSACTIONS (CONT'D)
On June 20, 1998 the officer, directors and certain members of
the advisory board entered into a "lock-up agreement" with the
Company, agreeing to withhold from sale, for a period of two years,
any shares of the Company's common stock which they own directly or
deemed to own beneficially. For this agreement they each received 500
shares which are not locked up. The total number of these shares
locked-up is 6,811,489.
On June 20, 1998 the Company adopted the Equity Incentive Plan
to provide directors, officers and certain key employees with
additional incentives. 4,500,000 shares of common stock have been
reserved for issuance pursuant to stock options and stock awards. The
exercise price of all incentive stock options granted may not be less
than the fair market value of the underlying common stock at the date
of grant. To date, no shares have been issued pursuant to this plan.
The Equity Incentive Plan will be administered by a committee
of two or more non-employee members of the Company's Board of
Directors.
Options to purchase 500,000 of the Company's common stock have
been granted to certain consultants of the company. The options have a
term of five years and are vested upon the date of the grant.
State of New Hampshire
Department of State
CERTIFICATE OF INCORPORATION
OF
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
The undersigned, as Deputy Secretary of State of the State of New
Hampshire, hereby certifies that Articles of Incorporation for the
incorporation of AMERI-CAN RAILWAY SYSTEMS, INCORPORATED, duly
signed pursuant to the provisions of the New Hampshire Business
Corporation Act, have been received in this office.
ACCORDINGLY the undersigned, as such Deputy Secretary of State, and
by virtue of the authority vested in him by law, hereby issues this
Certificate of Incorporation of AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
and attaches hereto a copy of the Articles of Incorporation.
IN TESTIMONY WHEREOF, I hereto set my hand and cause to be affixed
the Seal of the State of New Hampshire, this 4th day of May A .D. 1998
[Deleted Seal]
/s/ Robert P. Ambrose
Robert P. Ambrose
Deputy Secretary of State
<PAGE>
STATE OF NEW HAMPSHIRE
Fee for Form 11-A: $50.00 Form No. 11
Filing fee: $35.00 RSA 293-A:2.02
------
Total fees $85.00
Use black print or type.
Leave 1" margins both sides.
ARTICLES OF INCORPORATION
THE UNDERSIGNED, ACTING AS INCORPORATOR(S) OF A CORPORATION UNDER
THE NEW HAMPSHIRE BUSINESS CORPORATION ACT, ADOPT(S) THE FOLLOWING
ARTICLES OF INCORPORATION FOR SUCH CORPORATION:
FIRST: The name of the corporation is
Ameri-can Railway Systems, Incorporated
SECOND: The number of shares the corporation is authorized to issue:
50,000,000 common at $.0001 par value per share.
25,000,000 preferred at $.0001 par value per share.
THIRD: The name of the corporation's initial registered agent is
Doc-U-Search
and the street address, town/city (including zip code and post
office box, if any) of its initial registered office is (agent's
business address)
63 Pleasant street, P. O. Box 767, Concord, NH 03301
FOURTH: The capital stock will be sold or offered for sale within
the meaning of RSA 421-B. (Uniform Securities Act)
FIFTH: The corporation is empowered to transact any and all lawful
business for which corporations may be incorporated under RSA 293-A
and the principal purpose or purposes for which the corporation is
organized are:
Sales and manufacturing of railway communications and safety
equipment.
[If more space is needed, attach additional sheet(s).]
page 1 of 2
<PAGE>
ARTICLES OF INCORPORATION Form No. 11
Of AMERI-CAN RAILWAY SYSTEMS, INCORPORATED (Cont.)
SIXTH: The name and address of each incorporator is:
Name Address
CorpAmerica, Inc. 30 Old Rudnick Lane, Dover, DE 19901
Dated April 27, 1998
CorpAmerica, Inc.
By: /s/ David M. Abel
David M. Abel, Assistant Secretary
Incorporator(s)
Mail fees, ORIGINAL, ONE EXACT OR CONFORMED COPY AND FORM 11-A to:
Secretary of State, State House, Room 204, 107 North Main Street,
Concord, NH 03301-4989
Page 2 of 2
<PAGE>
FORM 11-A
ADDENDUM TO ARTICLES OF INCORPORATION
STATEMENT PURSUANT TO NH RSA 421-B:11,II
CORPORATION NAME: AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
BUSINESS ADDRESS: 100 Walnut Street, Champlain, New York 12919
CONTACT PERSON: Sydney Harland TELEPHONE NUMBER: (518) 298-8482
CONTACT PERSON ADDRESS (IF DIFFERENT): __________________________
I am (We are) aware that under the New Hampshire Uniform
Securities Act, RSA 421-B:17,II(k) provides an exemption from
securities registration if the aggregate number of holders of the
corporation's securities *1 does not exceed ten (10), provided that
no advertising *2 has been published or circulated in connection
with any such securities sale *1, and all securities sales are
consummated within 60 days after the date of incorporation.
COMPLETE EITHER ITEM 1, 2, OR 3 BELOW
1) If the corporation will be in compliance with RSA 421-B:17,II(k),
the above statute, check this line: ________
2) If the corporation has registered or will register its
securities for sale in the State of New Hampshire, enter the date
the registration statement was or will be filed with the Bureau of
Securities Regulation: _______________________________
3) If the corporation will offer its securities for sale in New
Hampshire under an exemption from registration requirements and RSA
421-B:17,II(k) (see above) does not apply, cite the statutory
exemption claimed for the sale of the corporation's securities:
RSA-421-B:17,II(h)
For assistance with questions relating to securities only, call
the Bureau of Securities Regulation at (603) 271-1463. For all
other questions, call the Corporation Division at (603) 271-3244.
COMPLETE THIS CERTIFICATION - ORIGINAL MUST BE FILED
I (We) hereby certify that the securities of the corporation have
been registered under RSA 421-B, the New Hampshire Uniform
Securities Act ("the Act"); or, when offered will be registered
under the Act; or are or when offered will be exempted from
registration under the Act; or are or when offered will be
offered in a transaction exempted from registration under the
Act. I (We) further certify that the articles of incorporation
state whether the capital stock will be sold or offered for sale
within the meaning of the Act. I (We) certify that the
person(s) signing this form includes all the incorporators, and
that the foregoing is true and complete to the best of my (our)
knowledge.
Name (print): Sydney Harland Signature: /s/ Sydney Harland
Name (print): ______________ Signature: ________________
Name (print): ______________ Signature: ________________
Name (print): ______________ Signature: ________________
Date: April 28, 1998
*1 - Virtually all new incorporations legally involve a "sale" of
"securities" to the new owners, even if there is no cash payment
for such securities.
*2 - The term "advertising" used here applies to any written material
distributed to sell securities.
MINUTES
AND
BY LAWS
OF
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
INCORPORATED UNDER THE LAWS OF
STATE OF NEW HAMPSHIRE
<PAGE>
CONSENT TO ACTION TAKEN IN LIEU OF ORGANIZATION MEETING
Of
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
The undersigned being the incorporator(s) of the corporation
hereby consent to and ratify the action taken to organize the
corporation as hereafter stated:
The Certificate of Incorporation filed on MAY 4, 1998
with the Secretary of State of this state was approved and inserted
in the record book of the corporation.
The persons whose names appear below were appointed
directors of the corporation to serve for a period of one year and
until their successors are appointed or elected and shall qualify:
SYDNEY HARLAND, CHAIRMAN PATRICK SHEA
DONALD HATHAWAY PETER HOULT
JOHN ANDREWS ROBERT ESECSON
The persons whose names appear below were appointed
officers of the corporation to serve for a period of one year
and until their successors are appointed or elected and shall
qualify:
CHAIRMAN & CEO: SYDNEY HARLAND
PRESIDENT & COO: PETER ROSS
SECRETARY: ROBERT ESECSON
TREASURER: MARK MIZIOLEK
By-laws, regulating the conduct of the business and affairs of
the corporation as prepared by the counsel for the corporation
were adopted and inserted in the record book.
[Deleted Seal]
The seal, an impression of which appears in the margin of this
consent was adopted as the corporate seal of the corporation, and
the specimen of certificates for shares in the form exhibited and
inserted in the record book was adopted as the corporate stock
certificate.
<PAGE>
The directors were authorized to issue the unsubscribed capital
stock of the corporation at such times and in such amounts as
it shall determine, and to accept in payment thereof cash,
labor done, personal property, real property or leases thereof,
or such other property as the board may deem necessary for the
business of the corporation.
The treasurer was authorized to open a bank account with KEY
BANK NATIONAL ASSOCIATION located at NIAGARA FALLS, NEW YORK 14304
and a resolution for that purpose on the printed form of said bank
was adopted and inserted in the record book.
The president was authorized to designate the principal office
of the corporation in this state as the office for service of
process on the corporation, and to designate such further agents
for service of process within or without this state as is in the
best interests of the corporation. The president was further
authorized to execute any and all certificates or documents to
implement the above.
Dated MAY 6, 1998.
/s/ Sydney Harland
_____________________
stockholder
_____________________
stockholder
_____________________
stockholder
A true copy of each of the following papers referred to in the
foregoing consent is appended hereto.
Certificate of Incorporation
Specimen stock certificates
Resolution designating depository of funds
By-Laws
<PAGE>
BY-LAWS
OF
AMERI-CAN RAILWAY SYSTEMS, INCORPORATED
ARTICLE I - OFFICES
The principal office of the corporation in the State of NEW YORK
shall be located at 100 WALNUT STREET, CHAMPLAIN, NEW YORK 12919
County of CLINTON, NEW YORK. The corporation may have such other
offices, either within or without the State of incorporation as
the board of directors may designate or as the business of the
corporation may from time to time require.
ARTICLE II - STOCKHOLDERS
1. ANNUAL MEETING.
The annual meeting of the stockholders shall, subject to the
certificate of incorporation be held at such a place in or outside
the State of New Hampshire as the directors may determine for the
purpose of hearing and receiving the reports and statements
required by the Act to be read and laid before the stockholders at
any annual meeting, electing directors, reappointing, if
necessary, the incumbent auditor and fixing or authorizing the
board of directors to fix his remuneration. No other business
shall be transacted at the annual meeting of the stockholders
unless such meeting is also properly constituted as a special
meeting of stockholders.
2. SPECIAL MEETINGS.
Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called
by the president or by the directors, and shall Be called by the
president at the request of the holders of a SIMPLE MAJORITY 50.1
per cent of all the outstanding shares of the corporation entitled
to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place, either within or
without the State unless otherwise prescribed by statute, as the
place of meeting for any annual meeting or for any special meeting
called by the directors. A waiver of notice signed by all
stockholders entitled to vote at a meeting may designate
By-Laws 1
<PAGE>
any place, either within or without the state unless otherwise
prescribed by statute, as the place for holding such meeting. If
no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of the
corporation.
4. NOTICE OF MEETING.
Written or printed notice stating the place, day and hour of
the meeting and, in case of a special meeting, the purpose of
purposes for which the meeting is called, shall be delivered not
less than 10 DAYS nor more than 30 days before the date of the
meeting, either personally or by mail, by or at the direction of
the president, or the secretary, or the officer or persons calling
the meeting, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail, addressed to the
stockholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.
5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment
thereof, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for
any other proper purpose, the directors of the corporation may
provide that the stock transfer books shall be closed for a stated
period but not to exceed, in any case, 30 days. If the stock
transfer books shall be closed for the purpose of determining
stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least 15 days
immediately preceding such meeting. In lieu of closing the stock
transfer books, the directors may fix in advance a date as the
record date for any such determination of stockholders, such date
in any case to be not more than 5 days and, in case of a meeting of
stockholders, not less than 2 days prior to the date on which the
particular action requiring such determination of stockholders is
to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of stockholders entitled
to notice of or to vote at a meeting of stockholders, or
stockholders entitled to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the
resolution of the directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
stockholders. When a determination of stockholders entitled to
vote at any meeting of stockholders
By-Laws 2
<PAGE>
has been made as provided in this section, such determination shall
apply to any adjournment thereof.
6. VOTING LISTS.
The officer or agent having charge of the stock transfer books
for shares of the corporation shall make, at least 30 days before
each meeting of stockholders, a complete list of the stockholders
entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address of and the number
of shares held by each, which list, for a period of 30 days prior
to such meeting, shall be kept on file at the principal office of
the corporation and shall be subject to inspection by any
stockholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any stockholder
during the whole time of the meeting. The original stock transfer
book shall be prima facie evidence as to who are the stockholders
entitled to examine such list or transfer books or to vote at the
meeting of stockholders.
7. QUORUM.
At any meeting of stockholders, more than 50% of the
outstanding shares of the corporation entitled to vote, represented
in person or by proxy, shall constitute a quorum at a meeting of
stockholders. If less than said number of the outstanding shares
are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
The stockholders present at a duly organized meeting may continue
to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
8. PROXIES.
At all meetings of stockholders, a stockholder may vote by
proxy executed in writing by the stockholder or by his duly
authorized attorney in fact. Such proxy shall be filed with the
secretary of the corporation before or at the time of the meeting.
9. VOTING.
Each stockholder entitled to vote in accordance with the terms
and provisions of the certificate of incorporation and these by-laws
shall be entitled to one vote, in person or by
By-Laws 3
<PAGE>
proxy, for each share of stock entitled to vote held by such
stockholders. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by
ballot. All elections for directors shall be decided by plurality
vote; all other questions shall be decided by majority vote except
as otherwise provided by the Certificate of Incorporation or the
laws of this State.
10. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders,
shall be as follows;
1. Roll Call.
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meeting.
4. Reports of Officers.
5. Reports of Committees.
6. Election of Directors.
7. Unfinished Business.
8. New Business.
11. INFORMAL ACTION BY STOCKHOLDERS.
Unless otherwise provided by law, any action required to be
taken at a meeting of the shareholders, or any other action which
may be taken at a meeting of the shareholders, may be taken without
a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote
with respect to the subject matter thereof.
By-Laws 4
<PAGE>
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the corporation shall be managed
by its board of directors. The directors shall in all cases act as
a board, and they may adopt such rules and regulations for the
conduct of their meetings and the management of the corporation, as
they may deem proper, not inconsistent with these by-laws and the
laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS.
The number of directors of the corporation shall be 6. Each
director shall hold office until the next annual meeting of
stockholders and until his successor shall have been elected and
qualified.
3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without
other notice than this by-law immediately after, and at the same
place as, the annual meeting of stockholders. The directors may
provide, by resolution, the time and place for the holding of
additional regular meetings without other notice than such
resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the
request of the president or any two directors. The person or
persons authorized to call special meetings of the directors may
fix the place for holding any special meeting of the directors
called by them.
5. NOTICE.
Notice of any special meeting shall be given at least 7 days
previously thereto by written notice delivered personally, or by
fax or mailed to each director at his business address. If mailed,
such notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid. If
notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph company.
The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of
any business because the meeting is not lawfully called or
convened.
By-Laws 5
<PAGE>
6. QUORUM.
At any meeting of the directors four shall constitute a
quorum for the transaction of business, but if less than said
number is present at a meeting, a majority of the directors present
may adjourn the meeting from time to time without further notice.
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting
at which a quorum is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the
number of directors and vacancies occurring in the board for any
reason except the removal of directors without cause may be filled
by a vote of a majority of the directors then in office only if a
quorum exists. Vacancies occuring by reason of the removal of
directors without cause shall be filled by vote of more than 50% of
the then outstanding stockholders entitled to vote. A director
elected to fill a vacancy caused by resignation, death, or removal
shall be elected to hold office for the unexpired term of his
predecessor.
9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed by cause by a
majority vote of the stockholders. Directors may be removed
without cause only by more than 50% of the then outstanding stock
entitled to vote.
10. RESIGNATION.
A director may resign at any time by giving written notice to
the board, the president or the secretary of the corporation.
Unless otherwise specified in the notice, the resignation shall
take effect upon receipt thereof by the board or such officer, and
the acceptance of the resignation shall not be necessary to make it
effective.
11. C0MPENSATION.
No compensation shall be paid to directors, as such, for their
services, but by resolution of the board a fixed sum and expenses
for actual attendance at each regular or special meeting of the
board may be authorized. Nothing herein contained shall be
construed to preclude any director from serving the corporation in
any other capacity and receiving compensation therefor.
By-Laws 6
<PAGE>
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of
the directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his
dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person
acting as the secretary of the meeting before the adjournment
thereof or shall forward such dissent by registered mail to the
secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate from among its members
an executive committee and other committees, each consisting of
three or more directors. Each such committee shall serve at the
pleasure of the board.
By-Laws 7
<PAGE>
ARTICLE IV - OFFICERS
1. NUMBER.
The officers of the corporation shall be a CHAIRMAN, a
PRESIDENT, a secretary and a treasurer, each of whom shall be
elected by the directors. Such other officers and assistant
officers as may be deemed necessary may be elected or appointed by
the directors.
2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors
shall be elected annually at the first meeting of the directors
held after each annual meeting of the stockholders. Each officer
shall hold office until his successor shall have been duly elected
and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter
provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may
be removed by the directors whenever in their judgment the best
interests of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any,
of the person so removed.
4. VACANCIES.
A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by the
directors for the unexpired portion of the term.
5. CHAIRMAN
The Chairman shall be the Chief Executive Officer of the
Corporation and shall, subject to the control of the directors,
shall in general supervise and control all the business and affairs
of the corporation. He shall be a director of the Corporation and
he shall, when present, preside at all meetings of the stockholders
and of the directors. The Chairman shall perform such other duties
as may be prescribed by the directors of the Corporation from time
to time.
5A. PRESIDENT
The President shall be the Chief Operating Officer of the
Corporation and shall, subject to the control of the directors and
of the Chief Executive Officer, be responsible for the day to day
management of the corporation. He may sign, with the secretary or,
any other proper officer of the Corporation thereunto authorized by
the directors, certificates for shares of the Corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the
directors have authorized to be executed, except in cases where the
signing and execution thereof shall expressly delegated by the
directors or by these by-laws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or
executed; and in general shall perform all duties incident to the
office of President and such other duties as may be prescribed by
the directors from time to time.
By-Laws 8
<PAGE>
perform all duties incident to the office of president and such
other duties as may be prescribed by the directors from time to
time.
6. VICE-PRESIDENT.
In the absence of the president or in event of his death,
inability or refusal to act, the vice-president shall perform the
duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the
president. The vice-president shall perform such other duties as
from time to time may be assigned to him by the President or by
the directors.
7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and
of the directors' meetings in one or more books provided for that
purpose, see that all notices are duly given in accordance with
the provisions of these by-laws or as required, be custodian of
the corporate records and of the seal of the corporation and keep
a register of the post office address of each stockholder which
shall be furnished to the secretary by such stockholder, have
general charge of the stock transfer books of the corporation and
in general perform all duties incident to the office of secretary
and such other duties as from time to time may be assigned to him
by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond
for the faithful discharge of his duties in such sum and with such
surety or sureties as the directors shall determine. He shall
have charge and custody of and be responsible for all funds and
securities of the corporation; receive and give receipts for
moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositories
as shall be selected in accordance with these by-laws and in
general perform all of the duties incident to the office of
treasurer and such other duties as from time to time may be
assigned to him by the president or by the directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time
by the directors and no officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of
the corporation.
By-Laws 9
<PAGE>
ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation and such
authority may be general or confined to specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and
no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the directors. Such authority may be
general or confined to specific instances.
3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money,
notes or other evidences of indebtedness issued in the name of the
corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to
time be determined by resolution of the directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in
such banks, trust companies or other depositaries as the directors
may select.
ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES.
Certificates representing shares of the corporation shall be
in such form as shall be determined by the directors. Such
certificates shall be signed by the president and by the secretary
or by such other officers authorized by law and by the directors.
All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the stockholders,
the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates
surrendered to the corporation for transfer shall be canceled and
no new certificate shall be issued until the
By-Laws 10
<PAGE>
former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed
or mutilated certificate a new one may be issued there for upon
such terms and indemnity to the corporation as the directors may
prescribe.
2. TRANSFERS OF SHARES.
(a) Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, and cancel
the old certificate; every such transfer shall be entered on the
transfer book of the corporation which shall be kept at its
principal office,
(b) The corporation shall be entitled to treat the holder of
record of any share as the holder in fact thereof, and,
accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person
whether or not it shall have express or other notice thereof,
except as expressly provided by the laws of this state.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall begin on the 31st
Day of December in each year.
ARTICLE VIII - DIVIDENDS
The directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law.
ARTICLE IX - SEAL
The directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the
corporation, the state of incorporation, year of incorporation and
the words, "Corporate Seal".
By-Laws 11
<PAGE>
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is
required to be given to any stockholder or director of the
corporation under the provisions of these by-laws or under the
provisions of the articles of incorporation, a waiver thereof in
writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI - AMENDMENTS
These by-laws may be altered, amended or repealed and new by-
laws may be adopted by a vote of the stockholders representing a
majority of all the shares issued and outstanding, at any annual
stockholders' meeting or at any special stockholders' meeting when
the proposed amendment has been set out in the notice of such
meeting.
ARTICLE XII - INDEMNIFICATION
(a) The corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the corporation to procure
a judgment in its favor) by reason of the fact that that person is or
was an agent of the corporation, against expenses, judgments, fines,
settlements, and other amounts actually and reasonably incurred in
connection with that proceeding if the person acted in good faith and
in a manner the person reasonably believed to be in the best interests
of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of that person was unlawful.
The termination of any proceeding by judgment, order, settlement,
conviction, or on a plea of nolo contenders or its equivalent shall
not, of itself, create a presumption that the person did not act in
good faith and in a n-Lanner that the person reasonably believed to be
in the best interests of the corporation or that the person had
reasonable cause to believe was unlawful.
(b) The corporation shall have power to indemnify anv person who was
or is a party or is threatened to be made a party to any threatened,
pending, or completed action by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person
is or was an agent of the corporation, against expenses actually and
reasonably incurred by the person in connection with the defense or
settlement of that action if that person acted in good faith, in a
manner the person believed to be in the best interests of the
corporation and its shareholders. No indemnification shall be made
for any of the following:
(1) Any claim, issue, or matter for which any person has been
adjudged liable to the corporation in the performance of that
person's duty to the corporation and its shareholders, unless
and only to the extent that the court where the proceeding was
or is pending determines on application that, in view of all
the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for expenses, and then only to
the extent that the court determines,
(2) Amounts paid in settling or otherwise, disposing of a
threatened or pending action without court approval; or
(3) Expenses incurred in defending a threatened or pending action
that is settled or otherwise disposed of without court approval.
By-Laws 12
<PAGE>
[DELETED STOCK CERTIFICATE]
Ameri-can Railway
Systems, Incorporated
AUTHORIZED STOCK 50,000,000 SHARES
$.001 PAR VALUE
This Certifies that ________________________________ is the
registered holder of ___________ shares
Ameri-can Railway Systems, Incorporated
Transferable only on the books of the Corporation by the holder
hereof in presence of attorney upon surrender of this Certificate
properly endorsed.
In Witness Whereof, the said Corporation has caused this
Certificate to be signed by its duly authorized officers and its
Corporate Seal to be hereunto affixed.
Seal
_______________________ _____________________
Chief Executive Officer Secretary
<PAGE>
KeyBank Business Non-Personal Signature Card
[DELETED SIGNATURE CARD]
<PAGE>
Payees and Payments Exempt from Backup Withholding -- The following
is a list of payees exempt from Backup withholding and for which no
information reporting is required. For interest and dividends, all
listed payees are exempt except item 9. For broker transactions,
payees listed in 1 through 13, and a person registered under the
Investment Advisers Act of 1940 who regularly act as a broker are
exempt.
Payments subject to reporting under sections 6041 and 6041A are
generally exempt from backup withholding only if made to payees
described in items 1 through 7, except a corporation that provides
medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information
reporting. Only payees described in items 2 through 6 are exempt
from backup withholding for barter exchange transactions, patronage
dividends, and payments by certain fishing boat operators.
1. A corporation.
2. An organization exempt from tax under section 501(a), or an IRA,
or a custodial account under section 403(b)(7).
3. The United States or any of its agencies or instrumentalities.
4. A state, the District of Columbia, a possession of the United
States, or any of their political subdivisions or instrumentalities.
5. A foreign government or any of its political subdivisions,
agencies, or instrumentalities.
6. An international organization or any of its agencies or
instrumentalities.
7. A foreign central bank of issue.
8. A dealer in securities or commodities required to register in
the United States or a possession of the United States.
9. A futures commission merchant registered in the Commodity
Futures Trading Commission.
10. A real estate investment trust
11. An entity registered at all times during the tax year under the
Investment Company Act of 1940.
12. A common trust fund operated by a bank under section 584(a).
13. A financial institution.
14. A middleman known in the investment community as a nominee or
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
15. A trust exempt from tax under section 664 or described in
section 4947.
05/04/98
RONALD L. WILLIAMS
805 W. Idaho Street, Suite 302 Telephone: (208) 344-6633
P.O. Box 2128 Telecopier: (208) 344-0077
Boise, ID 83701-2128 email: [email protected]
March 11, 1999
Board of Directors
Ameri-can Railway Systems, Inc.
100 Walnut Street,
Champlain, New York 12919
RE: Letter of Opinion; Ameri-can Railway Systems, Inc.,
Common Stock: $0.0001 Par Value
Gentlemen:
I. INTRODUCTION:
This firm has been requested to render an opinion as to whether a
public trading market may be maintained in the issued and outstanding
shares of common stock (hereinafter "Shares") of Ameri-can Railway
Systems, Inc., a New Hampshire corporation (hereinafter "Company") and
whether the Shares may be traded and/or transferred without violation
of the Federal Securities Act of 1933 (the "Securities Act") and the
Federal Securities Exchange Act of 1934 (the "Exchange Act"); together
the Securities Act and Exchange Act hereinafter referred to as the
"Acts". The law covered herein is limited to the federal law of the
United States and the laws of the State of New Hampshire.
In providing our opinion, the following factors have been
considered and examined:
1. The present corporate status of the Company and the legal
validity and effect of prior actions of the Company's Board of
Directors and shareholders; and
2. The tradability of the Company's Shares in interstate
commerce under the Acts, pursuant to the rules and regulations
promulgated thereunder.
II. FACTS AND HISTORY:
In rendering this opinion, we have considered such matters of law
and of fact, and, except as indicated below, have relied upon such
certificates and other information furnished to us, as we have deemed
appropriate as a basis to form the opinions set forth herein. Among
the information relied upon and the documents examined are the
Company's Articles of Incorporation, meeting Minutes (or Consents) of
Board of Directors and shareholders, representations contained in an
Officer's Certificate, financial statements, current shareholders
list, and certain other corporate and financial documents
(hereinafter, "Documents"), dating from the Company's inception to the
present.
<PAGE>
Based upon our review of the Documents, the following facts are
as set forth:
1. The Company was incorporated as Ameri-can Railway Systems,
Incorporated, under the laws of the State of New Hampshire on May 4,
1998, having an authorized capitalization of fifty million
(50,000,000) shares of Common Stock and twenty five million
(25,000,000) shares of Preferred Stock, $0.0001 par value. The
Company was organized to engage in and to operate any lawful business
for which corporations may be organized under the laws of the State of
New Hampshire.
2. On June 20, 1998, the Board of Directors authorized the
issuance of one million nine hundred fifteen thousand (1,915,000)
shares of Common Stock at $.001, pursuant to Regulation D, Rule 504,
for approximately one hundred ninety two dollars ($192.00).
3. On October 23, 1997, the Board of Directors authorized the
issuance of one million (1,000,000) shares of Common Stock at $.10,
pursuant to Regulation D, Rule 504 for approximately one hundred
thousand dollars ($100,000.00).
4. On February 1, 1999 the Board of Directors authorized the
sale of 100,000 Units (consisting of one share of Common Stock, one
Series A Warrant and One Series B Warrant) at $1.00, pursuant to
Regulation D, Rule 504, for approximately $100,000.
5. The Company has an authorized capitalization of fifty
million (50,000,000) shares of common stock and twenty five million
(25,000,000) shares of preferred stock, $0.0001 par value. The
Company has issued nine million seven hundred sixty two thousand four
hundred eighty nine (9,762,489) shares of common stock and zero (0)
shares of preferred stock. The Company has adopted an Equity
Incentive Plan and reserved four million five hundred thousand
(4,500,000) shares of common stock for issuing of stock options and
stock awards.
III. THE LAW:
Section 5 of the Securities Act prohibits the sale of any
security "unless a Registration Statement is in effect." Section 12
of the Exchange Act prohibits the sale of any security on a national
securities exchange unless a registration is effective.
Section 2(4) of the Securities Act defines "issuer" as including
"every person who issues or proposes to issue any security." An
issuer is subject to the registration requirements of the Act whenever
it makes an "original distribution" of its securities to the public.
The Small Business Investment Company Act of 1980 allows the SEC
to promulgate rules for the issuance of securities of "small business
issuers" defined as US or Canadian companies with revenues and public
float of less than twenty five million dollars ($25,000,000).
Regulation S-B is the source of disclosure requirements for small
business issuers filing under both the Securities Act and the Exchange
Act.
<PAGE>
IV. CORPORATE STATUS AND CAPACITY:
Upon our review of certain corporate documents, it is our opinion
that the Company is validly organized and presently existing in good
standing under the laws of the State of New Hampshire with a validly
constituted Board of Directors. The Board of Directors has the
capacity and authority to enter into contracts on behalf of and
binding upon the Company for any lawful purpose, subject only to the
provision that any agreement of merger, consolidation or exchange of
shares that would effectively transfer the control of the Company, or
any sale of substantially all assets other than in the usual and
regular course of business, shall be ratified by the holders of a
majority of the then outstanding shares of the Company's capital
stock.
V. LEGALITY OF SECURITIES BEING REGISTERED:
Based on the foregoing, it is our opinion that when the
Registration Statement relating to the stock is effective, the stock,
upon issuance thereof, is validly authorized and, when (a) the
pertinent provisions of the Acts and such "blue-sky" and securities
laws as may be applicable have been complied with and (b) such shares
have been duly delivered against payment therefor, such shares will be
validly issued, fully paid and nonassessable.
VI. QUALIFICATIONS:
This opinion is expressly based upon the facts stated herein, and
may not be relied upon in the event that other facts, not presently
known by this firm, should come to light. This opinion is solely for
the benefit of the named addressees and no other person may rely upon
it to any extent for any purpose.
In rendering this opinion, we have assumed: 1) the authenticity
of Documents submitted to us as originals; (2) the conformity to
authentic original documents of all Documents submitted to us as
certified, conformed or photostatic copies; and (3) the authenticity
and completeness of all signatures on all Documents submitted to us
for review.
Opinion letters of legal counsel are not binding upon the
Securities and Exchange Commission nor the courts, and to the extent
that persons relying upon this letter may have knowledge of facts or
circumstances which are contrary to those upon which this opinion is
based, then the opinion would not be applicable. This opinion is not
an insurance like guarantee of matters stated herein nor is it an
indemnification, or agreement to defend, for claims, proceedings,
liabilities or damages (including attorneys fees) that may result from
reliance hereon, if this opinion is incorrect. Rather this letter
only sets forth the professional opinion of this firm as to the most
probable ruling of a court as to the matters addressed herein.
<PAGE>
We hereby consent to the filing of this opinion, or copies
thereof, as an exhibit to the Registration Statement and to the
statement made regarding our firm under the caption Legal Opinions'
[or other appropriate caption] in the Registration Statement. In
giving this consent, we do not thereby admit that we are within the
category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and
Exchange Commission thereunder.
In rendering the opinions expressed in Section V we have assumed
without investigation that, with respect to each offer, issuance, sale
and delivery by the Company of shares by the purchaser thereof: (1)
except for the registration provisions of the Securities Act and for
the corporation law (but not the blue-sky' laws or securities laws)
of the State of New Hampshire as applicable to the Company, at the
time thereof and at all times subsequent thereto, such offer,
issuance, sale, delivery and purchase did not violate, result in a
breach of, or conflict with any law, rule, regulation, order,
judgment, or decree, in each case whether then or subsequently in
effect; (2) at the time thereof and at all times subsequent thereto,
the persons authorizing each such offer, issuance, sale, delivery,
purchase, execution, performance, or transaction for the Company, for
any underwriter or broker-dealer, or for any such other party did not
violate any fiduciary or other duty owed by them; (3) no event has
taken place subsequent to any such offer, issuance, sale, delivery,
purchase, execution, performance, or transaction or will take place
which would cause any such offer, issuance, sale, delivery, purchase,
execution, performance, or transaction not to comply with any such
law, rule, regulation, order, judgment, decree, or duty, or which
would permit the Company, any underwriter or broker-dealer, or any
such other party at any time thereafter to cancel, rescind, or
otherwise avoid any such offer, issuance, sale, delivery, purchase,
execution, performance, transaction, document, or oral agreement; (4)
there was no misrepresentation, omission, or deceit by the Company,
any underwriter or broker-dealer, any such other party, or any other
person or entity in connection with any such offer, issuance, sale,
delivery, purchase, execution, performance, or transaction; (5) each
such offer, issuance, sale, delivery, purchase, execution, performance
and transaction is governed by the laws of the State of New Hampshire,
without giving effect to conflict of laws; (6) each underwriter,
broker-dealer or other party to such offer, issuance, sale, delivery,
purchase, execution, performance, or transaction had the power,
authority and capacity to consummate such purchase, to execute,
deliver and perform each such agreement and to consummate each such
transaction; (7) each such offer, issuance, sale and delivery by the
Company, each such purchase by any underwriter, broker-dealer or by
any other party thereto, and the consummation of each such
transaction, by the Company, any underwriter, broker-dealer, and the
<PAGE>
other party thereto, did not, does not now, and will not violate,
result in a breach of, conflict with, or (with or without giving of
notice or the passage of time or both) entitle any party to terminate
or call a default under any term of any contract, agreement,
instrument, lease, license, arrangement, or understanding to which the
Company, any underwriter, broker-dealer or any such other party is or
becomes a party or to which any of them or any of their respective
properties, assets, or security holders are or will be subject; (8)
each such document or agreement was duly executed, delivered and
performed by the Company; (9) each such oral agreement was duly
performed by the Company, each underwriter, broker-dealer and each
other party thereto, constituted the legal, valid and binding
obligation of the Company and was enforceable as to the Company in
accordance with its terms; and (10) none of such underwriters or
broker-dealers and none of such other parties is subject to any
impediment to which investors or contracting parties generally are not
subject which would affect the opinions expressed in paragraph V.
The various statutory and regulatory provisions and
interpretations thereunder by administrative authorities in courts
having jurisdiction over such matters on which the foregoing opinion
is based, are necessarily subject to change from time to time. The
opinions and conclusions expressed herein are based in part upon the
facts as previously stated which have been provided to us by the
Company. There is no obligation to update this opinion in the event
of changes in the law or in the facts known to this firm.
No opinion is expressed with respect to any federal or state law,
not expressly referenced herein. In particular, and without limiting
the generality of the foregoing, no opinion is given with respect to
any secondary trading exemption under the laws of any individual
state, as to any individual shareholder.
No opinion is expressed with respect to any federal or state
statute or regulation with which a broker-dealer trading the shares
must comply. The foregoing opinions relate only to matters of the
internal law of the State of New Hampshire without reference to
conflict of laws and to matters of federal law, and we do not purport
to express any opinion on the laws of any other jurisdiction.
In rendering the foregoing opinion, we have relied without
investigation on representations by the Company and Certificates of
Officers of the Company whom we believe are responsible.
Sincerely,
/s/ Ronald L. Williams
Ronald L. Williams, President
Ronald L. Williams, P.C.
RLW:em
CONSULTING AGREEMENT
With
AMERI-CAN RAILWAYSYSTEMS, INC
(A New Hampshire Corporation)
1. Parties and General Terms of Agreement. This Agreement is made
effective as of July 1, 1998 by Idaho Consulting Services, Inc.
(the "Consultant" or "ICS") and with the above-referenced client.
2. Consultant's Services In General. The Consultant engages in
securities, business and financial consulting. The Consultant has
been or will be assisting the Client in evaluating alternative
financing plans and securities offerings. The Consultant assists only
on a best effort basis in short term and long term equity financing
arrangements. The Consultant also has the expertise to negotiate
mergers, acquisitions and joint ventures. The Consultant has
available financial analysts, accountants, legal counsel, financial
public relations firms and other experts in financing, securities
markets and acquisition and disposition transactions. The Consultant
does not generally act as, and will not accept any compensation for.
incidental activities generally conducted by a mortgage broker or loan
finder or loan placement firm or investment banker or broker/dealer.
3. Specific Documents and Consultation Agreed Upon.
3A. The Consultant shall provide the Client with the following:
analysis, management consulting, organizational structuring, document
preparation and other services upon receipt of payment.
3A(1) Equity Capitalization Outline. The Consultant
shall present an outline for the Client's raising equity capital and
becoming a publicly traded NASDAQ Bulletin Board listed company. This
will focus on a Regulation D, Rule 504 offering with Form D filings,
in three (3) or more stages. This can require the formation of a new
corporate entity to avoid unknown (or false claims of) stock
obligations or taxes, or other liabilities that can cost time and
money to defeat or settle.
3A(2) Public Relations Contract. The Consultant will
negotiate for the Client a marketing contract with a financial public
relations firm.
3A(3) Business Plan Due Diligence. The Consultant shall
request and review a thorough group of Client-prepared due diligence
documents and the Client's business plan.
3A(4) New Corporation. Form a new corporate entity, if
necessary or desirable.
3A(5) First Stage Offering to Consultant and Public
Relations Firm. The Consultant shall prepare the first stage, Rule
504, Offering Memorandum ("OM"), if deemed necessary, and Form D, for
sale to Consultant or its designees, assignees and/or agents of
1,915,000 free trading shares of Common Stock at $0.0001 per share
($192), including Common shares salable pursuant to terms of the
financial public relations and promotion contracts. Consultant
shall compensate its professional consultants for legal and financial
advice from the shares referred to in this paragraph and the cash
payments described elsewhere herein.
1
<PAGE>
3A(6) Second Stage Offering. The Consultant shall prepare
the second stage $0.10 OM and Form D for the Company's 1,000,000
shares of free trading Common Stock to be sold at $0.10 per share
($200,000). This offering is intended to provide a shareholder base
for NASD qualification as described below.
3A(7) Third Stage Offering. The Consultant shall prepare
the OM and Form D for the third stage sale of Units of stock and
warrants to purchase stock. Example, 895,000 Units will be sold at
$1.00 per Unit (as agreed here: $1.00 per Unit, or $895,000 total).
The number of Units equals the dollar amount sold in the first and
second stage offerings subtracted from $1,000,000 (the maximum amount
under Rule 504) divided by the Unit price. Each Unit contains one
share of Common Stock, one Series A Warrant with an exercise price of
to be determined per share and one Series B Warrant with an exercise
price of to be determined per share. The exercise price is the amount
per share the warrant holder shall pay to the Client Company or its
agent (warrant transfer agent) to purchase one share of registered
(free trading) Common stock of the Company. See: Paragraph 4B. As
part of this Agreement, the securities counsel shall prepare the
Series A and B Warrants and the related Stock and Warrant Transfer
Agreements.
3A(8) NASD and State Filings. The Consultant shall assist
the Client in preparing Client's S.E.C. Form D, NASD Bulletin Board
application under Rule 15C2-11 and Form 211, and N.Y. State Forms M-11
and U-2. The third stage offering shall be made approximately three
weeks, market conditions permitting, after NASD clearance of the 15C2-11.
3A(9) Market Maker and Transfer Agents. The Consultant
shall recommend to the Client a suitable market maker, stock transfer
agent and warrant transfer agent.
3A(10) S & P Listing. The Consultant shall assist the
Client in completing an application listing the Client's data in the
Standard and Poor's Corporation Records.
3A(11) S.E.C Qualified C.P.A. The Consultant shall
require the Client to engage an S.E.C. qualified certified public
accountant.
3A(12) Form 10-SB. The Consultant shall assist the Client
in preparing the Client's Form 10-SB within two (2) months after the
completion of the third stage offering. This S.E.C. registration
statement makes the Client fully reporting as to outstanding stock
under Section 12(g) of the Securities Exchange Act of 1934. The 10-SB
will complete the qualifications to be a fully informational qualified
NASDAQ-listed, electronic Bulletin Board Company.
3A(13) Form SB-1. The Consultant shall assist the Client in
preparing the Client's Form SB-2 (S.E.C. registration statement for
stock sales under the Securities Act of 1933) after the completion of
the third stage offering and the S.E.C has approved the Client
Company's 10-SB filing and the market conditions are favorable; that
is, the stock has stabilized. See 4B. The Form SB-2 will register
the Common stock of the Company underlying the Warrants included in
the third stage Offering.
3B. Introduction. The Consultant shall inform the Client of any
investors it may be aware or become aware of who may be interested in
investing in the Client Company's Regulation D, Rule 504 Offering.
The Consultant shall not accept compensation or a commission for such
a service.
2
<PAGE>
4. Certain Information.
4A. NASD Clearance Timeframe. Normally the NASD will approve
the Bulletin Board (Rule 15C2-11) over-the-counter electronic listing
of the Client's shares for trading in two to three weeks, subject to
any additional inquiries and/or requests for additional information
made by the NASD.
4B. Warrant Details. The Series A and B Warrants shall be
exercisable after (A) the third stage offering is completed, (B) the
S.E.C. has approved the Client Company's 10-SB filing and (C) the
market conditions are favorable; that is, the stock has stabilized (i)
the stock price's closing bid is averaging approximately $1.00 above
the conversion price of the warrants and (ii) the daily average
trading volume is above 10,000 for at least a month. The A and B
Warrants are redeemable by the Client at $0.02 per Warrant on 30 days'
written notice. Before the Warrants can be exercised (converted), a
Form SB-2 Registration Statement must have been declared effective by
the S.E.C.. In order for the A and B Warrants to be converted
separately, an effective SB-2 registration (prospectus) would be
required for the conversion of the A Warrants and a separate effective
SB-2 registration (prospectus) would be required for the conversion
of the B Warrants.
5. Performance Stock Options. The Client hereby grants the
Consultant five (5) year options to purchase 500,000 shares of Common
Stock at $0.0001 per share. The options vest and are exercisable
immediately. The Consultant or its assignees( Collectively know as
the "Optionee" )may exercise the options in whole or in part from time
to time. The Optionee, also, agrees to enter in to a two year lock-up
commencing on the date of grant. The stock underlying the options
shall be registered on the Company's first S-3 filing, S-8 filing, if
applicable, or in the Form SB-2 filing or at another time pursuant to
"piggy back" registration rights. An Option Certificate is attached.
6. Fees Related to Offering Memorandum.
6A. OM Fees. The following fees are for due diligence,
analysis, structuring the transaction(s) and preparing the required
OM(s) and filings an legal requirements See .item 9. The fees are
$20,000 payable as follows: (i) $10,000 is due upon signing of the
Agreement, and (ii) the balance ($10,000) is payable upon funding of
the second stage offering. See 3A(6). Payment is made payable to
"Peter V. White, CPA."
6B. Filing and Preparation Fees. Payable to the Securities
Counsel upon demand from the proceeds of the second stage offering.
See 3A(6). The following estimated fees are required for listing and
trading the Company's Common Stock.
Fees Preparation
------- -----------
Standard & Poor's $6,900 $ 500
First Form M-11 250 500
Second Form M-11 750 250
15c2-11 and 211 -0- 750
------- -------
$7,900 $2,000
7. S.E.C. Analysis and Preparation Fees. Payable from the proceeds of
the third stage offering. See 3A(7).
3
<PAGE>
3A(12) Form 10-SB $20,000
Each S.E.C. Comment Letter 1,000
3A(13) Form SB-1 (per registration) $30,000 See 4B
Each S.E.C. Comment Letter 1,000
PAYMENT: Item 7. 50% UPON COMMENCEMENT
50% UPON FILING DOCUMENT
PAYMENT FOR EACH S.E.C. COMMENT LETTER PRIOR TO
SUBMISSION OF RESPONSE
8. Other Expenses. ALL TRAVEL EXPENSES INCURRED ON BEHALF OF THE
CLIENT ARE TO BE PREPAID BY THE CLIENT. FILING FEES, FED-EX/U.P.S.,
PRINTING FEES AND ASSOCIATED COSTS WILL BE PAID DIRECTLY BY THE
CLIENT. INCORPORATION FILING AND ESTIMATED PREPARATION FEES OF
$850.00 (NEVADA) OR $600.00 (FLORIDA) WILL BE PAID DIRECTLY TO THE
SECURITIES COUNSEL IF REQUIRED.
9. Legal. The Consultant retains a general and securities counsel.
He shall assist the Client by reviewing, preparing, filing and/or
supervising the preparation of documents pertaining to the Client for
the following: Consultant's Due Diligence Questionnaire and Documents
Request List, Disclosure Questionnaire for Officers, Directors and
Affiliates, Corporate Structure, Securities and Exchange Commission
Filings, State Filings (M-11, U2) State Blue Sky Regulation Filing, if
any, Stock and Warrant Transfer Agreement, Warrants, Standard and
Poor's Corporation Records, Market Makers, NASD (Rule 15C2-11 and Form
211) and related legal opinions. His fees are paid by the Consultant
and shall not be disclosed by him or the Consultant. His background
summary is available upon request.
10. Public Relations Firm. The financial public relations and
promotions firms shall purchase the Client's Rule 504 Common Stock
(free trading), issuable in two or more certificates at purchase price
consistent with the second stage 504 offering ($.0001 per share)
11. Arbitration and Jurisdiction. Any dispute among the parties
arising out of this contract or otherwise shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Judgment upon the award rendered by
the Arbitrator may be entered in any court having venue and
jurisdiction at that location. This Agreement is to be construed in
accordance with the laws of the State of Pennsylvania .
12. Client's Representations and Warranties. The Client represents
that all documents and any other information furnished to the
Consultant are true, correct, complete and not misleading. The Client
also represents and warrants that it has not withheld and will not
withhold any materially important information. The Client accepts and
acknowledges sole liability for defending and paying all damages or
settlements resulting from any actions or claims against the Client or
the Consultant which may arise from the information furnished (or
omitted) by the Client.
13. Use of Proceeds. Client represents and warrants that it will
utilize the Rule 504 funds pursuant to the "Use of Proceeds" as set
forth in the Offering Memorandum(s) and the spirit thereof.
4
<PAGE>
14. Voluntary Lock-up. Officers, directors and principal
shareholders (ownership of at least 5%) will enter into a Lock-up
Agreement with the Company, agreeing not to sell their Common Stock
in the open market for a period twenty four (24) months. All sales
transactions shall be in accordance with Rules 144 and 145. This Lock-
up Agreement will be administered by the Board of Directors of the
Company (Client).
15. Rights of Rescission. At any time, for any or no reason, within
fifteen days of the completion of the audit of the Company's financial
statements, the Consultant may terminate this Agreement by returning
all funds (except for such funds which may have been expended in the
performance of due diligence), options, share certificates and
documents without any recourse or penalties from the Client.
16. Confidentiality. Consultants and the Client mutually agree to
hold confidential and secret all documents, strategies, relationships
or actions which either party may disclose or perform except as
directly required in performing the obligations as set forth in this
Agreement.
17. Completion, The Consulting Agreement contains three separate
and distinct phases, each one with a specific and identifiable point
of completion and associated costs. Phase One: Regulation D, Rule 504
offering shall be deemed complete upon the Client Company trading and
raising one million dollars before expenses. Phase Two shall be
deemed complete upon the S.E.C. declaring the Client Company's 10-SB
filing effective. Phase Three shall be deemed complete upon the S.E.C.
declaring the Client Company's initial SB-1 filing effective. Either
the Consultant or the Client may elect not to initiate a subsequent
phase upon thirty days' written notice. If the Client elects not to
initiate a phase prior to the start of such a phase, no additional
Consultant fees shall be incurred. If the phase is cancelled, the
Client shall be charged for hours incurred, at a rate of $175.00 per
hour, per individual Consultant.
18. Trickle-Out Assurances. The Consultant shall assist the Client,
on a best efforts basis, in obtaining from the purchaser of the Second
Stage Offering Shares, as referred to in paragraph 3A(6) herein,
assurances that such purchasers shall refrain from sales of the stock
which may adversely affect the market or the price of the Client
company's stock for a period of one hundred and twenty (120) days from
the commencement of public trading of the Company's stock or until the
average daily trading of the Company stock reaches ten thousand
(10,000) shares, whichever event shall occur first.
19. Final Agreement. This Agreement replaces, supercedes and renders
void all and any prior Agreements written and verbal. Any and all
modifications and or changes to this Agreements shall be mutually
agreed in writing by both parties.
20. Signatures. Signed as of July 1, 1998.
CLIENT: CONSULTANT:
Name: /s/ Sydney Harland Name: /s/ Edmund J. Gorman, Esq.
Title: Chairman & CEO Title: President & Director
Company: Ameri-can Railway Company: Idaho Consulting Services, Inc.
Systems, Inc.
EXHIBITS:
Option Certificates and Agreements.
Shareholders Lists:
Founders, Officers, Key Employees and Directors.
Individuals purchasers of the $0.0001 Regulation D, Rule 504 Offering.
cc: Ed Gorman
5
<PAGE>
Performance Option Grant
500,000 Shares of Common Stock, $0.0001 par value, Granted to and
Idaho Consulting Services, Inc.
Parties and General Terms of Option Certificate and Agreement.
This Option Certificate and Agreement is made effective as of July 1,
1998 among Client Company's or its successor's ("Optionor"), and
Idaho Consulting Services, Inc. (the "Consultant" or "ICS") .
Idaho Consulting Services, Inc. (the "Consultant" or "ICS") and
with the above-referenced client. or its assignees, designees agents
or transferees ("Optionee"). The purpose of this Option Certificate
and Agreement is to set forth the terms pursuant to which the Optionor
is granting and the Optionee is accepting an option to purchase shares
of Client Company's or its successor's Common Stock, $0.0001 par value
per share.
2. Grant of Option. The Optionee is hereby granted an
option to purchase Five Hundred Thousand (500,000) Shares of Optionor,
Common Stock, $0.0001 par value per share, at the exercise (purchase)
price and on the other terms stated herein.
3. Exercise Price. The exercise price of this Option to
purchase the shares subject hereto is One Dollar ($0.0001) per share.
4. Escrow/Pledge of Shares. The certificate representing the
shares underlying this Option, and an Assignment of Stock, hereto,
shall be held to secure the issuance of shares, pursuant to the
enclosed Standard Escrow Terms.
5. Exercise of Option. This option is exercisable from time to
time, in whole or in part, by the sending to Optionor with a copy to
the Escrow Agent (if required) of signed written notice (on a copy of
the Exercise Notice Form contained herein, or otherwise) with payment
by Optionee of the exercise price on or before the date which is five
(5) years from the date of this Option. The Escrow Agent shall
effectuate the transfer upon receipt of the notice with a copy of the
check mailed to Optionor or upon forwarding the check to Optionors if
received by the Escrow Agent. The Client will register the stock
underlying the Performance Options on an S-3, an S-8 or any other
registration statement that may be filed with the Securities and
Exchange Commission upon the exercise of these Performance Options.
6. Purpose and Conditions of Option. This option is an
incentive and vests and is exercisable immediately. Optionee may
exercise the options in whole or in part from time to time. The
Optionee, as a part of this agreement, has entered into a two
year lock-up agreement which commences on the date of grant
(July 1, 1998). The stock underlying the options is deemed to
be issued prusuant to Rule 144, and if required shall be registered
on the Company's first S-3 filing, S-8 filing, if applicable, or
in the Form SB-2 filing or at another time pursuant to "piggy back"
registration rights.
7. Signatures. IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first set forth herein.
6
<PAGE>
Counterparts or multiple originals may be executed and collectively
shall be deemed to be one instrument.
OPTIONEE OPTIONER
Signature: Signature: /s/ Sydney Harland
Name Edmund J. Gorman, Esq. Name: Sydney Harland
Title President & Director Title Chairman & CEO
7
<PAGE>
EXERCISE NOTICE FORM
As To Stock Option
To:
Copy to: Escrow Agent.
The undersigned hereby irrevocably elects to exercise the
attached Option Certificate and Agreement to the extent of 500,000
Shares of __________________________________________, Inc.
Common Stock, $0.0001 par value per share, and hereby makes payment of
$_______________ ($1.00 per share) in payment of the purchase
(exercise) price thereof, ________________________________, Inc.,
check enclosed herewith.
(Please typewrite or print in block letters the name (s) on the Option
Certificate or assignees, designees, agents or transferees. If a
transferee is named, then a bank, must guarantee the registered
owner(s) signature(s) below or in a separate letter or form.)
Date: ____________, 199__ Signature:_______________________
Name:
Title: ___________________________
(If officer, trustee, etc.)
Enclosure: $____________Check
8
AMERI-CAN RAILWAYS
SYSTEMS, INC. (ARS)
Consulting Agreement
With:
Ameri-can Inc., a corporation registered in State of New
York (American)
1. Services
ARS agrees to engage Ameri-can to perform services and Ameri-can
accepts such engagement. The services shall consist of consulting
services of Ameri-can and its representative Sydney Harland. Sydney
Harland shall be appointed as Chairman and CEO of ARS.
2. Term
This contract shall be for a term of sixty months, commencing on the
4th of May 1998.
3. Fee
(a) An annual fee of CDN $150,000.00, payable CDN $12,500.00
monthly plus bonuses;
4. Non-competition
The Non-Compete Agreement shall apply.
5. Duties
Ameri-cans' services shall include:
(a) the overall leadership and vision of the business of the Company
in accordance with the policies and directions of the Board of
Directors; and
(b) other specific duties to be mutually agreed upon during the first
six (6) months from commencement of the engagement.
6. Termination
American's engagement may be terminated at any time by either party
on not less than 30 days' prior written notice. The Company shall
have the right to terminate the engagement at any time after the
initial six (6) months period upon payment to Ameri-can of an amount
equal to fees outstanding in the balance of the engagement and a lump
sum payment of $1,000,000 US in additional fees.
Date: May 4th, 1998
/s/ Don Hathaway /s/ Sydney Harland
DON HATHAWAY SYDNEY HARLAND
DIRECTOR
EXECUTIVE COMMITTEE AMERI-CAN INC.
AMERI-CAN RAILWAY
SYSTEMS, INCORPORATED
AMERI-CAN RAILWAYS
SYSTEMS, INC. (ARS)
Consulting Agreement
With:
PETER ROSS ASSOCIATES, a sole proprioritorship
registered in Ontario (ROSS)
1. Services
ARS agrees to engage ROSS to perform services and ROSS accepts such
engagement. The services shall consist of consulting services of
Peter Ross. Peter Ross shall be appointed as President and Chief
Operating Officer of ARS.
2. Term
This contract shall be for a term of twenty-four months, commencing on
the 29th of May 1998.
3. Fee
(a) An annual fee of CDN $90,000.00, payable CDN $7,500.00 monthly;
(b) 115,000 common shares of the Company issued to ROSS upon
engagement commencement, and an option to purchase an
additional 115,000 from the Treasury at an exercise price of
not less than fair market value of those shares at the date
of grant as follows and only so long as Peter Ross is
President and Chief Operating Officer of the Company and the
following performance criteria are achieved by the Company:
(i) upon expiration of six months from commencement of this
engagement, twenty-five (25) percent of the optioned shares;
(ii) upon the expiration of twelve (12) months from
commencement of the engagement, twenty-five (25) percent of
the optioned shares provided that during the immediately
preceding twelve (12) months the Company has completed the
sale of forty (40) Crossing Systems;
(iii) upon the expiration of eighteen (18) months from
commencement of the engagement, twenty-five (25) percent of
the optioned shares provided that during the immediately
preceding six (6) months the Company has completed the sale
of seventy-five (75) Crossing Systems;
(iv) upon the expiration of twenty-four (24) months from
commencement of the engagement, twenty-five (25) percent of
the optioned shares provided that during the immediately
preceding six (6) months the Company has completed the sale
of seventy-five (75) Crossing Systems.
In the event that the engagement is terminated for any reason prior to
the expiration of any of the period mentioned above, an averaging
provision shall be applied to determine the entitlement.
<PAGE>
4. Non-competition
The Non-Compete Agreement shall apply.
5. Duties
Peter Ross' services shall include:
(a) the running of the day to day operations of the business of the
Company in accordance with the policies and directions of the
Board of Directors; and
(b) other specific duties to be mutually agreed upon during
the first six (6) months from commencement of the engagement.
6. Termination
ROSS' engagement may be terminated at any time by either party on
not less than 30 days' prior written notice. The Company shall have
the right to terminate the engagement at any time after the initial
six (6) months period upon payment to ROSS of an amount equal to
six (6) months fees, provided that should such termination take place
at any time during the last six (6) months of the term of the engagement,
the maximum which the Company shall be required to pay in lieu of notice
shall be an amount equal to the number of months left in the unexpired
term times the monthly fee.
Date: June 25, 1998
/s/ Sydney Harland /s/ Peter Ross
_____________________ ________________________
SYDNEY HARLAND PETER ROSS
AMERI-CAN RAILWAY PETER ROSS ASSOCIATES
SYSTEMS, INCORPORATED
AMERI-CAN
RAILWAY
SYSTEMS, INC.
APPOINTMENT LETTER
FOR
VICE PRESIDENT AND CFO
Dear Mark Miziolek
Subject to the drafting and execution by us of a formal Employment
Contract, I would like to take this opportunity to confirm the terms
discussed and agreed upon with respect to your appointment as Vice
President and Chief Financial Officer of the Company.
1. Position
You will be appointed as the Vice President and Chief Financial
Officer of the Company.
2. Term
The appointment shall be for a term of twenty-four months
commencing on the 20th day of May, 1998.
3. Compensation
a) A yearly salary of CDN. $72,000, payable CDN $6,000 monthly. This
amount will be reviewed within 12 months of the starting date.
b) You shall have 50,000 common shares of the Company issued to you
when you commence your contract, and an option to purchase an
additional 50,000 from the Treasury at an exercise price less than the
fair market value of these shares at the date of grant as follows and
only so long as you are the Vice President and Chief Financial Officer
of the Company and the following performance criteria are achieved by
the Company.
I. Upon the expiration of six months from the commencement of your
contract , twenty-five (25) percent of the optioned shares.
II. Upon the expiration of twelve (12) months from the commencement
of your contract twenty five (25) percent of the optioned shares
provided that during the immediately preceding six (6) months the
Company has completed the sale of forty (40) Crossing Systems.
<PAGE>
III. Upon the expiration of eighteen (18) months from the commencement
of your contract, twenty five (25) percent of the optioned shares
provided that during the immediately preceding six (6) months the
Company has completed the sale of an additional seventy-five (75)
Crossing Systems.
IV. Upon the expiration of twenty-four (24) months from the
commencement of your contract, twenty five (25) percent of the
optioned shares provided that during the immediately preceding six
(6) months the Company has completed the sale of an additional
seventy-five (75) Crossing Systems.
In the event of the termination of your contract prior to the
expiration of any period mentioned above, an averaging provision
shall be applied to determine your entitlement.
4. Non competition
The Contract will contain the usual provision prohibiting you
from competing with the company anywhere in the world for a
period of two (2) years from the expiry or termination of your
services.
5. Duties
Your duties shall include:
- Developing reporting systems
- monitoring and advising of financial performance
- liaison with financial institutions and investors
- liaison with Auditors and other financial service providers
- Other duties as mutually agreed upon.
6. Probationary Period
The Company shall have the right to terminate your contract
without notice or payment within six (6) months from the
commencement date.
7. Termination for any reason
The Company shall have the right to terminate your contract at
any time after the expiration of the probationary period upon
payment to you of an amount equal to six (6) months salary,
provided that should such termination take place at any time
during the last six (6) months of the contract, the maximum which
the Company shall be required to pay in lieu of notice shall be
an amount equal to the number of months remaining in the
unexpired term of the contract. The Company shall however provide
a minimum of two months notice to such termination.
<PAGE>
8. Termination by Vice President and CFO
The Vice President and CFO shall provide a minimum of one (1)
month notice of his desire to terminate the contract.
Please sign this letter below to indicate you agreement with the above
terms and we will proceed to discuss the remaining terms of your
Contract and to have a draft Contract drawn up by our lawyers.
Yours truly
/s/ Sydney Harland
Sydney Harland
AMERI-CAN Railway Systems, Inc.
Agreed this 20th day of May, 1998
/s/ Mark P. Miziolek
_____________________________
Mark P. Miziolek
SERVICE AGREEMENT
THIS AGREEMENT made as of this 20th day of May, 1998
B E T W E E N
SHABIR GOVA, ENGINEER, an engineer, residing in the country
of Canada, at 209 Hover Drive, Pickering, Ontario, Canada
L1V 6C3 (the "Consultant")
and
SYDNEY A. HARLAND, an individual residing at 2155
Winchester Court, Burlington, Ontario, 3M7 L7P (hereinafter
called "Harland"
WHEREAS Harland has created certain technology and business strategies
related to automated railway crossings and railway communications
(hereinafter called the A "Technology"); and
WHEREAS Harland and the Consultant wish to work together for the
purpose of completing an perfecting the design of the Technology and
to commercialize the Technology;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and other good and valuable consideration, the
parties agree as follows:
1.0 Definitions
1.1 The following terms and expressions shall have, for all purposes
of this Agreement, the meaning set forth below:
(a) "Agreement" means this Agreement, as amended from time to time;
(b) "Consulting Services" means engineering consulting services
relating to the engineering development, design and fabrication of all
software, firmware, packaging, hardware, networking, interfacing and
telecommunications required to ensure the proper functioning of the
Technology;
(c) "Project" means the commercialization of the Technology by
selling shares in the Company to the public by means of a public
placement or sale to the public of shares in the Company;
(d) "Technology" means technology relating to automated railway
crossings, train sensing, and railway communications;
<PAGE>
2
(e) "Company" means the corporation having ownership and control of
all Rights in the Technology;
(f) "Rights" means all intellectual property rights, including all
inventions (whether patentable or not), patents, patent applications,
know how, copyright, software (both object code and source code),
trade marks, trade mark applications, trade mark registrations,
industrial designs, computer chip topographies, trade secrets,
marketing information, client lists, and confidential information;
(g) "Harland Information" means any information of any kind or type
provided by Harland relating to the Technology or relating to the
marketing of the Technology; and
(h) "Resulting Information" means any report, data, test results,
software, designs, invention (whether patentable or not), trade
secret, document or other information or any kind or type resulting
from the provision of Consulting Services by the Consultant.
2.0 Retainer of Services
2.1 Harland hereby retains the Consultant to provide Harland with
Consulting Services and the Consultant hereby agrees to provide
Harland with Consulting Services for the Project.
2..2 The Consultant shall provide Harland the requested Consulting
Services on a part time basis, subject to the Consultant's
availability.
2.3 Harland shall pay all reasonably incurred expenses incurred by
the Consultant relating to the provision of the Consulting
Services.
3.0 Assignment of Rights
3.1 The Consultant hereby assigns to Harland all Rights in any
Resulting Information to Harland. Without limiting the generality
of this paragraph, the Consultant agrees to execute any
assignment, declaration, petition or any other document, required
to record or protect Harland's ownership of said Rights in any
Resulting Information and hereby appoints Harland as his attorney
for the limited purpose of executing all such assignments,
declarations, petitions or any other document or documents
reasonably required by Harland to effect the purpose of this
paragraph.
3.2 The Consultant hereby agrees to sign any petition, declaration,
assignment or other document which may be required by Harland to
file for and secure patent protection for any Rights assigned by
the Consultant to Harland pursuant to paragraph 3.1 hereof.
<PAGE>
3
3.3 Harland hereby agrees to LICENCE to the Company immediately upon
the incorporation of the Company, all of Harland's Rights in the
Technology together with all of the Rights assigned to Harland
pursuant to paragraph 3.1 hereof. Any Rights belonging to
Harland pursuant to paragraph 3.1 and 3.2 hereof which arise
after the incorporation of the Company, shall be LICENCED by
Harland to the Company forthwith.
4.0 Shares in the Company
In exchange for the Consulting Services as specified in paragraphs 2.1
and 2.2 hereof, Harland shall have the Company issue 45,000 of the
Company's Shares to the Consultant, immediately upon incorporation of
the Company. If the Company fails to issue shares to the Consultant,
Harland shall assign 45,000 of his shares to the Consultant.
5.0 Marketing of Shares
5.1 Harland agrees to use his best efforts to manage and direct the
affairs of the Company to maximize the value and liquidity of the
common shares of the Company.
5.2 Harland agrees to use his best efforts to have the shares of the
Company publically traded or otherwise offered to the public for
sale.
6.0 Information
6.1 The Consultant shall provide Harland with all Resulting
Information which is available to the Consultant and which may be
required by Harland.
6.2 Harland shall provide the Consultant with all Harland Information
which is reasonable available to Harland and which may be
reasonably required by the Consultant to provide the Consulting
Services.
6.3 Both Resulting Information and Harland Information shall remain
the property of Harland and shall be kept confidential by the
Consultant and not disclosed to others except with the prior
written consent of Harland or the Company. Harland Information
will be used solely for the purpose of providing the Consulting
Services.
6.4 The Consultant shall disclose Resulting Information and Harland
Information only to such of his own employees as shall require
the information in order to provide the Consulting Services and
shall treat both Harland Information and Resulting Information as
it would his own confidential information. Such employees shall
be notified of the proprietary nature of Harland and Resulting
Information.
<PAGE>
4
6.5 All Harland Information disclosed in written form under this
Agreement by Harland shall be clearly marked as "proprietary" or
"confidential". All Harland Information disclosedby Harland in
any manner other then in writing shall be preceded or followed by
an oral or written statement indicating that the information is
confidential or constitutes Harland Information falling within
the terms of this Agreement.
6.6 These provision will not apply to Harland Information or Resulting
Information if it:
(a) is known to the Consultant prior to receipt thereof from Harland,
as evidenced by written records;
(b) is disclosed without restriction to the Consultant in good faith
by a third party who is in lawful possession thereof and who has
the right to make such disclosure;
(c) is or shall have become public knowledge or otherwise, through
no fault of the Consultant;
(d) is information which is required to be disclosed pursuant to
judicial or government order or pursuant to statutory law.
6.7 Upon Harland's request or in the event the parties hereto decide
not to proceed with any transaction which is the subject of this
Agreement, whichever is sooner, the Consultant will promptly: (i)
return to Harland all written and other materials furnished by Harland
subject to this Agreement; (ii) return to Harland all documents, data
memoranda, notes and other writings based on Harland Information
provided subject to this Agreement. The Consultant will not retain
copies, extracts or other reproductions in whole or in part of the
materials referred to in (i) or (ii).
6.8 The provisions of paragraphs 6.3, 6.4, 6.5, 6.6. and 6.7 shall
survive termination of this Agreement for a period of twenty (20)
years.
7.0 Succession
7.1 This Agreement shall be binding on and, except as otherwise
provided, shall ensure to the benefit of the legal successors or
representatives of the parties, and to the successors and assigns
of Harland and to the successors and assigns of the Consultant.
8.0 Nature of Agreement
8.1 The parties of this Agreement agree and acknowledge that this
Agreement does not create a partnership, joint venture,, or any
other relationship between the parties save the relationship set
out herein before and solely for the limited purposes herein.
<PAGE>
5
9.0 Law
9.1 This Agreement shall be governed by the laws of the province of
Ontario and there are no understandings, agreements, or
representations, expressed or implied, not specified herein.
10.0 Term
10.1 This Agreement may not be amended except in writing.
This Agreement shall come into force on the date first shown
above and remain in force until the termination of the Project or
the expiry of twenty (20) years, which ever occurs last. The
provisions of paragraphs 6.7 and 7.1 shall survive termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
SYDNEY HARLAND SHABIR GOVA
/s/ Sydney Harland /s/ Shabir Gova
________________________ _____________________________
SERVICE AGREEMENT
THIS AGREEMENT made as of this 20th day of May, 1998
B E T W E E N
Gary Johnson, Consultant, an engineer, residing in the
country of Canada, 1025 Beechnut Rd., Oakville, Ontario, L6J
7P4 "Consultant")
and
SYDNEY A. HARLAND, an individual residing at 2155
Winchester Court, Burlington, Ontario, 3M7 L7P (hereinafter
called "Harland"
WHEREAS Harland has created certain technology and business strategies
related to automated railway crossings and railway communications
(hereinafter called the A "Technology"); and
WHEREAS Harland and the Consultant wish to work together for the
purpose of completing an perfecting the design of the Technology and
to commercialize the Technology;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and other good and valuable consideration, the
parties agree as follows:
1.0 Definitions
1.1 The following terms and expressions shall have, for all purposes
of this Agreement, the meaning set forth below:
(a) "Agreement" means this Agreement, as amended from time to time;
(b) "Consulting Services" means the creation, design and
implementation of all marketing materials and marketing plans required
by the Company along with the gathering, analysis and reporting of all
marketing intelligence including, pricing, competition, location of
markets, analysis and reporting.
(c) "Project" means the commercialization of the Technology by
selling shares in the Company to the public by means of a public
placement or sale to the public of shares in the Company;
(d) "Technology" means technology relating to automated railway
crossings, train sensing, and railway communications;
<PAGE>
2
(e) "Company" means the corporation having ownership and control of
all Rights in the Technology;
(f) "Rights" means all intellectual property rights, including all
inventions (whether patentable or not), patents, patent applications,
know how, copyright, software (both object code and source code),
trade marks, trade mark applications, trade mark registrations,
industrial designs, computer chip topographies, trade secrets,
marketing information, client lists, and confidential information;
(g) "Harland Information" means any information of any kind or type
provided by Harland relating to the Technology or relating to the
marketing of the Technology; and
(h) "Resulting Information" means any report, data, test results,
software, designs, invention (whether patentable or not), trade
secret, document or other information or any kind or type resulting
from the provision of Consulting Services by the Consultant.
2.0 Retainer of Services
2.1 Harland hereby retains the Consultant to provide Harland with
Consulting Services and the Consultant hereby agrees to provide
Harland with Consulting Services for the Project.
2..2 The Consultant shall provide Harland the requested Consulting
Services on a part time basis, subject to the Consultant's
availability.
2.3 Harland shall pay all reasonably incurred expenses incurred by
the Consultant relating to the provision of the Consulting
Services.
3.0 Assignment of Rights
3.1 The Consultant hereby assigns to Harland all Rights in any
Resulting Information to Harland. Without limiting the generality
of this paragraph, the Consultant agrees to execute any
assignment, declaration, petition or any other document, required
to record or protect Harland's ownership of said Rights in any
Resulting Information and hereby appoints Harland as his attorney
for the limited purpose of executing all such assignments,
declarations, petitions or any other document or documents
reasonably required by Harland to effect the purpose of this
paragraph.
3.2 The Consultant hereby agrees to sign any petition, declaration,
assignment or otherdocument which may be required by Harland to
file for and secure patent protection for any Rights assigned by
the Consultant to Harland pursuant to paragraph 3.1 hereof.
<PAGE>
3
3.3 Harland hereby agrees to LICENCE to the Company immediately upon
the incorporation of the Company, all of Harland's Rights in the
Technology together with all of the Rights assigned to Harland
pursuant to paragraph 3.1 hereof. Any Rights belonging to
Harland pursuant to paragraph 3.1 and 3.2 hereof which arise
after the incorporation of the Company, shall be assigned by
Harland to the Company forthwith.
4.0 Shares in the Company
In exchange for the Consulting Services as specified in paragraphs 2.1
and 2.2 hereof, Harland shall have the Company issue75,000 of the
Company's Shares to the Consultant, immediately upon incorporation of
the Company. If the Company fails to issue shares to the Consultant,
Harland shall assign 75,000 of his shares to the Consultant.
5.0 Marketing of Shares
5.1 Harland agrees to use his best efforts to manage and direct the
affairs of the Company to maximize the value and liquidity of the
common shares of the Company.
5.2 Harland agrees to use his best efforts to have the shares of the
Company publically traded or otherwise offered to the public for
sale.
6.0 Information
6.1 The Consultant shall provide Harland with all Resulting
Information which is available to the Consultant and which may be
required by Harland.
6.2 Harland shall provide the Consultant with all Harland Information
which is reasonable available to Harland and which may be
reasonably required by the Consultant to provide the Consulting
Services.
6.3 Both Resulting Information and Harland Information shall remain
the property of Harland and shall be kept confidential by the
Consultant and not disclosed to others except with the prior
written consent of Harland or the Company. Harland Information
will be used solely for the purpose of providing the Consulting
Services.
6.4 The Consultant shall disclose Resulting Information and Harland
Information only to such of his own employees as shall require
the information in order to provide the Consulting Services and
shall treat both Harland Information and Resulting Information as
it would his own confidential information. Such employees shall
be notified of the proprietary nature of Harland and Resulting
Information.
<PAGE>
4
6.5 All Harland Information disclosed in written form under this
Agreement by Harland shall be clearly marked as "proprietary" or
"confidential". All Harland Information disclosed by Harland in
any manner other then in writing shall be preceded or followed by
an oral or written statement indicating that the information is
confidential or constitutes Harland Information falling within
the terms of this Agreement.
These provision will not apply to Harland Information or Resulting
Information if it:
(a) is known to the Consultant prior to receipt thereof from Harland,
as evidenced by written records;
(b) is disclosed without restriction to the Consultant in good faith
by a third party who is in lawful possession thereof and who has the
right to make such disclosure;
(c) is or shall have become public knowledge or otherwise, through no
fault of the Consultant;
(d) is information which is required to be disclosed pursuant to
judicial or government order or pursuant to statutory law.
6.6 Upon Harland's request or in the event the parties hereto decide
not to proceed with any transaction which is the subject of this
Agreement, whichever is sooner, the Consultant will promptly: (i)
return to Harland all written and other materials furnished by Harland
subject to this Agreement; (ii) return to Harland all documents, data
memoranda, notes and other writings based on Harland Information
provided subject to this Agreement. The Consultant will not retain
copies, extracts or other reproductions in whole or in part of the
materials referred to in (i) or (ii).
6.7 The provisions of paragraphs 6.3, 6.4, 6.5, 6.6. and 6.7 shall
survive termination of this Agreement for a period of twenty (20)
years.
7.0 Succession
7.1 This Agreement shall be binding on and, except as otherwise
provided, shall ensure to the benefit of the legal successors or
representatives of the parties, and to the successors and assigns
of Harland and to the successors and assigns of the Consultant.
8.0 Nature of Agreement
8.1 The parties of this Agreement agree and acknowledge that this
Agreement does not create a partnership, joint venture,, or any
other relationship between the parties save the relationship set
out herein before and solely for the limited purposes herein.
<PAGE>
5
9.0 Law
9.1 This Agreement shall be governed by the laws of the province of
Ontario and there are no understandings, agreements, or
representations, expressed or implied, not specified herein.
10.0 Term
10.1 This Agreement may not be amended except in writing.
This Agreement shall come into force on the date first shown
above and remain in force until the termination of the Project or
the expiry of twenty (20) years, which ever occurs last. The
provisions of paragraphs 6.7 and 7.1 shall survive termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
SYDNEY HARLAND GARY JOHNSON
/s/ Sydney Harland /s/ Gary Johnson
_____________________ ____________________
SERVICE AGREEMENT
THIS AGREEMENT made as of this 29th day of June, 1998
B E T W E E N
Susan MacStravick, Consultant, an engineer, residing in the
country of Canada, 143 Balsam Drive., Oakville, Ontario,
L6J 3X4 "Consultant")
and
SYDNEY A. HARLAND, an individual residing at 2155
Winchester Court, Burlington, Ontario, 3M7 L7P (hereinafter
called "Harland"
WHEREAS Harland has created certain technology and business strategies
related to automated railway crossings and railway communications
(hereinafter called the A "Technology"); and
WHEREAS Harland and the Consultant wish to work together for the
purpose of completing an perfecting the design of the Technology and
to commercialize the Technology;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and other good and valuable consideration, the
parties agree as follows:
1.0 Definitions
1.1 The following terms and expressions shall have, for all purposes
of this Agreement, the meaning set forth below:
(a) "Agreement" means this Agreement, as amended from time to time;
(b) "Consulting Services" means the creation, design and
implementation of all investor relations, Public relations Plans
for Stock Trading and Promotion required by the Company along
with the gathering, analysis and reporting of all promotion
intelligence.
(c) "Project" means the commercialization of the Technology by
selling shares in the Company to the public by means of a public
placement or sale to the public of shares in the Company;
(d) "Technology" means technology relating to automated railway
crossings, train sensing, and railway communications;
<PAGE>
2
(e) "Company" means the corporation having ownership and control of
all Rights in the Technology;
(f) "Rights" means all intellectual property rights, including all
inventions (whether patentable or not), patents, patent applications,
know how, copyright, software (both object code and source code),
trade marks, trade mark applications, trade mark registrations,
industrial designs, computer chip topographies, trade secrets,
marketing information, client lists, and confidential information;
(g) "Harland Information" means any information of any kind or type
provided by Harland relating to the Technology or relating to the
marketing of the Technology; and
(h) "Resulting Information" means any report, data, test results,
software, designs, invention (whether patentable or not), trade
secret, document or other information or any kind or type resulting
from the provision of Consulting Services by the Consultant.
2.0 Retainer of Services
2.1 Harland hereby retains the Consultant to provide Harland with
Consulting Services and the Consultant hereby agrees to provide
Harland with Consulting Services for the Project.
2..2 The Consultant shall provide Harland the requested Consulting
Services on a part time basis, subject to the Consultant's
availability.
2.3 Harland shall pay all reasonably incurred expenses incurred by
the Consultant relating to the provision of the Consulting
Services.
3.0 Assignment of Rights
3.1 The Consultant hereby assigns to Harland all Rights in any
Resulting Information to Harland. Without limiting the generality
of this paragraph, the Consultant agrees to execute any
assignment, declaration, petition or any other document, required
to record or protect Harland's ownership of said Rights in any
Resulting Information and hereby appoints Harland as his attorney
for the limited purpose of executing all such assignments,
declarations, petitions or any other document or documents
reasonably required by Harland to effect the purpose of this
paragraph.
3.2 The Consultant hereby agrees to sign any petition, declaration,
assignment or other document which may be required by Harland to
file for and secure patent protection for any Rights assigned by
the Consultant to Harland pursuant to paragraph 3.1 hereof.
<PAGE>
3
3.3 Harland hereby agrees to LICENCE to the Company immediately upon
the incorporation of the Company, all of Harland's Rights in the
Technology together with all of the Rights assigned to Harland
pursuant to paragraph 3.1 hereof. Any Rights belonging to
Harland pursuant to paragraph 3.1 and 3.2 hereof which arise
after the incorporation of the Company, shall be assigned by
Harland to the Company forthwith.
4.0 Shares in the Company
In exchange for the Consulting Services as specified in paragraphs 2.1
and 2.2 hereof, Harland shall have the Company issue50,000 of the
Company's Shares to the Consultant, immediately upon incorporation of
the Company. If the Company fails to issue shares to the Consultant,
Harland shall assign 50,000 of his shares to the Consultant.
5.0 Marketing of Shares
5.1 Harland agrees to use his best efforts to manage and direct the
affairs of the Company to maximize the value and liquidity of the
common shares of the Company.
5.2 Harland agrees to use his best efforts to have the shares of the
Company publically traded or otherwise offered to the public for
sale.
6.0 Information
6.1 The Consultant shall provide Harland with all Resulting
Information which is available to the Consultant and which may be
required by Harland.
6.2 Harland shall provide the Consultant with all Harland Information
which is reasonable available to Harland and which may be
reasonably required by the Consultant to provide the Consulting
Services.
6.3 Both Resulting Information and Harland Information shall remain
the property of Harland and shall be kept confidential by the
Consultant and not disclosed to others except with the prior
written consent of Harland or the Company. Harland Information
will be used solely for the purpose of providing the Consulting
Services.
6.4 The Consultant shall disclose Resulting Information and Harland
Information only to such of his own employees as shall require
the information in order to provide the Consulting Services and
shall treat both Harland Information and Resulting Information as
it would his own confidential information. Such employees shall
be notified of the proprietary nature of Harland and Resulting
Information.
<PAGE>
4
6.5 All Harland Information disclosed in written form under this
Agreement by Harland shall be clearly marked as "proprietary" or
"confidential". All Harland Information disclosed by Harland in
any manner other then in writing shall be preceded or followed by
an oral or written statement indicating that the information is
confidential or constitutes Harland Information falling within
the terms of this Agreement.
These provision will not apply to Harland Information or Resulting
Information if it:
(a) is known to the Consultant prior to receipt thereof from Harland,
as evidenced by written records;
(b) is disclosed without restriction to the Consultant in good faith
by a third party who is in lawful possession thereof and who has the
right to make such disclosure;
(c) is or shall have become public knowledge or otherwise, through no
fault of the Consultant;
(d) is information which is required to be disclosed pursuant to
judicial or government order or pursuant to statutory law.
6.6 Upon Harland's request or in the event the parties hereto decide
not to proceed with any transaction which is the subject of this
Agreement, whichever is sooner, the Consultant will promptly: (i)
return to Harland all written and other materials furnished by
Harland subject to this Agreement; (ii) return to Harland all
documents, data memoranda, notes and other writings based on
Harland Information provided subject to this Agreement. The
Consultant will not retain copies, extracts or other
reproductions in whole or in part of the materials referred to in
(i) or (ii).
6.7 The provisions of paragraphs 6.3, 6.4, 6.5, 6.6. and 6.7 shall
survive termination of this Agreement for a period of twenty (20)
years.
7.0 Succession
7.1 This Agreement shall be binding on and, except as otherwise
provided, shall ensure to the benefit of the legal successors or
representatives of the parties, and to the successors and assigns
of Harland and to the successors and assigns of the Consultant.
8.0 Nature of Agreement
8.1 The parties of this Agreement agree and acknowledge that this
Agreement does not create a partnership, joint venture,, or any
other relationship between the parties save the relationship set
out herein before and solely for the limited purposes herein.
<PAGE>
5
9.0 Law
9.1 This Agreement shall be governed by the laws of the province of
Ontario and there are no understandings, agreements, or
representations, expressed or implied, not specified herein.
10.0 Term
10.1 This Agreement may not be amended except in writing.
This Agreement shall come into force on the date first shown
above and remain in force until the termination of the Project or
the expiry of twenty (20) years, which ever occurs last. The
provisions of paragraphs 6.7 and 7.1 shall survive termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
SYDNEY HARLAND SUSAN MacSTRAVICK
/s/ Sydney Harland /s/ Susan MacStravick
_____________________ _________________________
AMERI-CAN RAILWAY SYSTEMS INC.
APPOINTMENT LETTER
FOR
DIRECTOR
Dear Sir or Madam:
Re: Appointment to Board of Directors
We wish to take this opportunity to confirm your appointment to the
Board of Directors of the Company upon the following terms:
1. Term
You have been appointed for a term of twenty-four (24) months, to
commence upon the date of your acceptance of the Appointment.
2. Compensation
Save and except for the share options set out below and 100,000 common
shares of the Company at a nominal value you shall receive no
compensation for your services or efforts as a Director. Provided that
should you, for any reason resign your Directorship prior to the
expiration of the term of your appointment hereunder, the Company has
the right to repurchase and you must sell to the Company all of these
100,000 common shares at their par value.
3. Expenses
You shall be forthwith reimbursed by the Company for all expenses
incurred by you in the course of fulfilling your duties as a Director,
including the full cost of travel, food and hotel accommodation
associated with your attendance at meetings of the Board of Directors.
<PAGE>
4. Share Option Plan
Each Director shall be entitled to purchase fifty thousand (50,000)
common shares of the Company at fair market value per share, for each
year of the Term that the Director completes as a Director, however,
the shares which underlay the option referable to any given year do
not vest in the Director until the expiry of that year. Should the
Director resign the position of Director of should his or her
Appointment be terminated prior to the completion of any given year,
then the shares referable to that year shall be forfeited upon
repayment to the Director of the cost of exercising the option for
that year.
5. Attendance at Board Meetings
You are required to attend all Board Meeting. Absence from any two (2)
consecutive Board Meetings shall constitute the tendering of your
resignation from the Board.
Please sign this letter below to indicate your acceptance of this
Appointment to the Board of Directors.
Yours truly,
/s/ Sydney Harland /s/ John Andrews
_____________________________
SYDNEY HARLAND, CHAIRMAN, CEO,
AMERI-CAN RAILWAY
SYSTEMS, INC.
AMERI-CAN RAILWAY SYSTEMS INC.
APPOINTMENT LETTER
FOR
DIRECTOR
Dear Sir or Madam:
Re: Appointment to Board of Directors
We wish to take this opportunity to confirm your appointment to the
Board of Directors of the Company upon the following terms:
1. Term
You have been appointed for a term of twenty-four (24) months, to
commence upon the date of your acceptance of the Appointment.
2. Compensation
Save and except for the share options set out below and 100,000 common
shares of the Company at a nominal value you shall receive no
compensation for your services or efforts as a Director. Provided that
should you, for any reason resign your Directorship prior to the
expiration of the term of your appointment hereunder, the Company has
the right to repurchase and you must sell to the Company all of these
100,000 common shares at their par value.
3. Expenses
You shall be forthwith reimbursed by the Company for all expenses
incurred by you in the course of fulfilling your duties as a Director,
including the full cost of travel, food and hotel accommodation
associated with your attendance at meetings of the Board of Directors.
<PAGE>
4. Share Option Plan
Each Director shall be entitled to purchase fifty thousand (50,000)
common shares of the Company at fair market value per share, for each
year of the Term that the Director completes as a Director, however,
the shares which underlay the option referable to any given year do
not vest in the Director until the expiry of that year. Should the
Director resign the position of Director of should his or her
Appointment be terminated prior to the completion of any given year,
then the shares referable to that year shall be forfeited upon
repayment to the Director of the cost of exercising the option for
that year.
5. Attendance at Board Meetings
You are required to attend all Board Meeting. Absence from any two (2)
consecutive Board Meetings shall constitute the tendering of your
resignation from the Board. Attendance may be in person or via
conference call.
Please sign this letter below to indicate your acceptance of this
Appointment to the Board of Directors.
Yours truly,
/s/ Sydney Harland /s/ Robert M. Esecson
_____________________________
SYDNEY HARLAND, CHAIRMAN, CEO,
AMERI-CAN RAILWAY
SYSTEMS, INC.
AMERI-CAN RAILWAY SYSTEMS INC.
APPOINTMENT LETTER
FOR
DIRECTOR
Dear Sir or Madam:
Re: Appointment to Board of Directors
We wish to take this opportunity to confirm your appointment to the
Board of Directors of the Company upon the following terms:
1. Term
You have been appointed for a term of twenty-four (24) months, to
commence upon the date of your acceptance of the Appointment.
2. Compensation
Save and except for the share options set out below and 100,000 common
shares of the Company at a nominal value you shall receive no
compensation for your services or efforts as a Director. Provided that
should you, for any reason resign your Directorship prior to the
expiration of the term of your appointment hereunder, the Company has
the right to repurchase and you must sell to the Company all of these
100,000 common shares at their par value.
3. Expenses
You shall be forthwith reimbursed by the Company for all expenses
incurred by you in the course of fulfilling your duties as a Director,
including the full cost of travel, food and hotel accommodation
associated with your attendance at meetings of the Board of Directors.
<PAGE>
4. Share Option Plan
Each Director shall be entitled to purchase fifty thousand (50,000)
common shares of the Company at fair market value per share, for each
year of the Term that the Director completes as a Director, however,
the shares which underlay the option referable to any given year do
not vest in the Director until the expiry of that year. Should the
Director resign the position of Director of should his or her
Appointment be terminated prior to the completion of any given year,
then the shares referable to that year shall be forfeited upon
repayment to the Director of the cost of exercising the option for
that year.
5. Attendance at Board Meetings
You are required to attend all Board Meeting. Absence from any two (2)
consecutive Board Meetings shall constitute the tendering of your
resignation from the Board.
Please sign this letter below to indicate your acceptance of this
Appointment to the Board of Directors.
Yours truly,
/s/ Sydney Harland /s/ Peter Hoult
_____________________________
SYDNEY HARLAND, CHAIRMAN, CEO,
AMERI-CAN RAILWAY
SYSTEMS, INC.
AMERI-CAN RAILWAY SYSTEMS INC.
APPOINTMENT LETTER
FOR
DIRECTOR
Dear Sir or Madam:
Re: Appointment to Board of Directors
We wish to take this opportunity to confirm your appointment to the
Board of Directors of the Company upon the following terms:
1. Term
You have been appointed for a term of twenty-four (24) months, to
commence upon the date of your acceptance of the Appointment.
2. Compensation
Save and except for the share options set out below and 100,000 common
shares of the Company at a nominal value you shall receive no
compensation for your services or efforts as a Director. Provided that
should you, for any reason resign your Directorship prior to the
expiration of the term of your appointment hereunder, the Company has
the right to repurchase and you must sell to the Company all of these
100,000 common shares at their par value.
3. Expenses
You shall be forthwith reimbursed by the Company for all expenses
incurred by you in the course of fulfilling your duties as a Director,
including the full cost of travel, food and hotel accommodation
associated with your attendance at meetings of the Board of Directors.
<PAGE>
4. Share Option Plan
Each Director shall be entitled to purchase fifty thousand (50,000)
common shares of the Company at fair market value per share, for each
year of the Term that the Director completes as a Director, however,
the shares which underlay the option referable to any given year do
not vest in the Director until the expiry of that year. Should the
Director resign the position of Director of should his or her
Appointment be terminated prior to the completion of any given year,
then the shares referable to that year shall be forfeited upon
repayment to the Director of the cost of exercising the option for
that year.
5. Attendance at Board Meetings
You are required to attend all Board Meeting. Absence from any two (2)
consecutive Board Meetings shall constitute the tendering of your
resignation from the Board.
Please sign this letter below to indicate your acceptance of this
Appointment to the Board of Directors.
Yours truly,
/s/ Sydney Harland /s/ Donald Hathaway
_____________________________
SYDNEY HARLAND, CHAIRMAN, CEO,
AMERI-CAN RAILWAY
SYSTEMS, INC.
AMERI-CAN RAILWAY SYSTEMS INC.
APPOINTMENT LETTER
FOR
DIRECTOR
Dear Sir or Madam:
Re: Appointment to Board of Directors
We wish to take this opportunity to confirm your appointment to the
Board of Directors of the Company upon the following terms:
1. Term
You have been appointed for a term of twenty-four (24) months, to
commence upon the date of your acceptance of the Appointment.
2. Compensation
Save and except for the share options set out below and 100,000 common
shares of the Company at a nominal value you shall receive no
compensation for your services or efforts as a Director. Provided that
should you, for any reason resign your Directorship prior to the
expiration of the term of your appointment hereunder, the Company has
the right to repurchase and you must sell to the Company all of these
100,000 common shares at their par value.
3. Expenses
You shall be forthwith reimbursed by the Company for all expenses
incurred by you in the course of fulfilling your duties as a Director,
including the full cost of travel, food and hotel accommodation
associated with your attendance at meetings of the Board of Directors.
<PAGE>
4. Share Option Plan
Each Director shall be entitled to purchase fifty thousand (50,000)
common shares of the Company at fair market value per share, for each
year of the Term that the Director completes as a Director, however,
the shares which underlay the option referable to any given year do
not vest in the Director until the expiry of that year. Should the
Director resign the position of Director of should his or her
Appointment be terminated prior to the completion of any given year,
then the shares referable to that year shall be forfeited upon
repayment to the Director of the cost of exercising the option for
that year.
5. Attendance at Board Meetings
You are required to attend all Board Meeting. Absence from any two (2)
consecutive Board Meetings shall constitute the tendering of your
resignation from the Board.
Please sign this letter below to indicate your acceptance of this
Appointment to the Board of Directors.
Yours truly,
/s/ Sydney Harland /s/ Patrick R. Shea
_____________________________
SYDNEY HARLAND, CHAIRMAN, CEO,
AMERI-CAN RAILWAY
SYSTEMS, INC.
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Sydney Harland
Title: Chairman & CEO
Dated: June 1, 1998 Signature: /s/ Sydney Harland
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Peter D. Ross
Peter Ross Associates
Title: President & COO
Dated: June 20, 1998 Signature: /s/ Peter D. Ross
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ('the Company') Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Shabir Gova
Title: Vice President of Technology
Dated: July 16, 1998 Signature: /s/ Shabir Gova
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Gary Johnson
Title: Vice President Marketing
Dated: June 18, 1998 Signature: /s/ Gary Johnson
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Susan Boyd Mastravick
Title: Director Investor Relations
Dated: June 26, 1998 Signature: /s/ Susan Boyd Mastravick
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Donald B. Hathaway
Title: Director
Dated: June 23, 1998 Signature: /s/ Donald Hathaway
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Pat Shea in Trust
For Shea Estate
Title: President - TAIMA
Dated: July 5, 1998 Signature: /s/ Pat Shea
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Robert M. Esecson
Title: Secretary, Director
Dated: , 1998 Signature: /s/ Robert M. Esecson
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Peter John Hoult
Title: Director
Dated: August 4, 1998 Signature: /s/ Peter Hoult
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: John F. Andrews
Title: Director
Dated: July 27, 1998 Signature: John F. Andrews
AMERI-CAN RAILWAY SYSTEMS, INC.
Lock-Up Agreement
AMERI-CAN RAILROAD SYSTEMS, Inc. ("ARS")
100 WalNUT Street
Champlain, NY 12919
Re: ARS ("the Company") Proposed Issuance of Common Stock
Dear Sirs:
I am a shareholder of ARS, a New Hampshire Corporation. In
consideration of the proposed initial offering for sale of ARS's
shares to the public, under what is commonly referred to as a
Regulation D-Rule 504 offering, that is intended to raise capital and
improve the Company's viability, I hereby agree that for a period of
two years from the date of the first of such sales, I will not,
directly or indirectly, offer, sell, grant any options to purchase or
otherwise dispose of any shares of Company Common Stock without prior
written consent of the company, except that I may transfer any number
of such shares to my children, by gift or otherwise, provided that any
such shares will continue to be subject to the restriction set forth
in this letter.
This agreement shall be binding on the undersigned and its respective
successors, heirs, personal representatives and assigns.
Very truly yours,
Name: Mark Miziolek
Title: Vice President & CFO
Dated: June 20, 1998 Signature: Mark Miziolek
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York,12919, and Non-competer, of
________________________,___________________,_____________,__________.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
By: /s/ Sydney Harland
/s/ John Andrews
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York,12919, and Non-competer, of
R. M. Esecson, 3 Ashley Circle, Acton, MA.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 2 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Robert M. Esecson
By: /s/ Sydney Harland
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York,12919, and Non-competer, of
Peter J. Hoult.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Peter J. Hoult
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York,12919, and Non-competer, of
__________________________________________________________.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Donald Hathaway
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York,12919, and Non-competer, of
Patrick Shea, 944 North Russell Rd., Ontario, Canada K4R 1C7.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Patrick Shea
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York, 12919, and Non-competer, of
________________________________________________________________.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
<PAGE>
3. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
4. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
5. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Gary Johnson
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York, 12919, and Non-competer, of
___________________________________________________________.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Susan MacStravick
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York, 12919, and Non-competer, of
________________________________________________________________.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
<PAGE>
3. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
4. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
5. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Mark P. Miziolek
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York, 12919, and Non-competer, of
209 Hoover Drive, Ontario.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
<PAGE>
3. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
4. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
5. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
6. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Sydney Harland
By: /s/ Shabir Gova
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York, 12919, and Non-competer, of
________________________,___________________,_____________,__________.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in shares of ARS valued at $0.20 (500 shares) upon execution of
this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
By: /s/ Sydney Harland
__________________________________________
Ameri-can Railway Systems, Incorporated.
NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made effective as of
June 10, 1998, by and between Ameri-can Railway Systems, Incorporated,
of 100 Walnut Street, Champlain, New York, 12919, and Non-competer, of
Peter Ross, Peter Ross Associates, 276 Chartwell Rd., Oakville, Ontario.
In this Agreement, the party who is requesting the non-competition
from the other party shall be referred to as "ARS", and the party who
is agreeing not to compete shall be referred to as "NC".
ARS has created certain technology and business strategies related to
automated railway crossings and railway communications (hereinafter
called the "Technology").
1. NON-COMPETE COVENANT. For a period of 2 years after the effective
date of this Agreement, NC will not directly or indirectly engage in
any business that competes with ARS. This covenant shall apply to the
geographical area that includes North America.
2. NON-SOLICITATION COVENANT. For a period of two years after the
effective date of this Agreement, NC will not directly or indirectly
solicit business from, or attempt to sell, license or provide the same
or similar products or services as are now provided to, any customer
or client of ARS.
Further, for a period of 2 years after the effective date of this
Agreement, NC will not directly or indirectly solicit, induce or
attempt to induce any employee of ARS to terminate his or her
employment with ARS.
3. PAYMENT. ARS will pay compensation to NC for the covenants of NC
in the amount of $100.00. This compensation shall be payable in a lump
sum in $0.20 shares of ARS upon execution of this agreement.
<PAGE>
4. CONFIDENTIALLY. NC will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of NC, or
divulge, disclose, or communicate in any manner information that is
proprietary to ARS. NC will protect such information and treat it as
strictly confidential. The obligation of NC not to disclose
confidential information shall continue for a period of 5 years after
the effective date of this agreement.
5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties regarding the subject matter of this Agreement, and there
are no other promises or conditions in any other agreement whether
oral or written.
6. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited,
7. INJUNCTION. It is agreed that if NC violates the terms of this
Agreement, money damages will be insufficient to compensate ARS.
Therefore, ARS will be entitled to seek injunctive relief (i.e., a
court order that requires NC to comply with this Agreement) to enforce
the terms of this Agreement.
Protected Party:
Ameri-can Railway Systems, Incorporated.
/s/ Peter Ross
By: /s/ Sydney Harland
__________________________________________
Ameri-can Railway Systems, Incorporated.
LICENSE AGREEMENT
This License Agreement (this "Agreement") is made effective as of May
20, 1998 between Sydney Allan Harland, of 2155 Winchester Court,
Burlington, Ontario L7P3M7 Canada, and Ameri-can Railway Systems,
Incorporated, of 100 Walnut Street, Champlain, New York 12919 U.S.A..
In the Agreement, the party who is granting the right to use the
licensed property will be referred to as "Licensor", and the party who
is receiving the right to use the licensed property will be referred
to as "ARS".
The parties agree as follows:
1. GRANT OF LICENSE. Licensor owns the intellectual property,
trade name and patents described in Exhibit A, attached hereto
and made a part hereof. ("Licensed Property"). In accordance with
this Agreement, Licensor grants ARS a non-exclusive license to use
the Licensed Property. Licensor retains title and ownership of the
Licensed Property. This grant of license only applies to the
following described territory: Canada and the United States.
2. PAYMENT OF ROYALTY. ARS will pay to Licensor a royalty which
shall be calculated as follows: The royalty shall be paid by the
issuance of 4,520,239 shares of ARS common stock to Licensor.
3. MODIFICATIONS. Unless the prior written consent of Licensor is
obtained, ARS may not modify or change the Licensed Property in any
manner.
4. DEFAULTS. If ARS fails to abide by the obligations of this
Agreement, Licensor shall have the option to cancel this Agreement by
providing 60 days' written notice to ARS.
5. ARBITRATION. All disputes under this Agreement that cannot be
resolved by the parties shall be submitted to arbitration under the
rules and regulations of the American Arbitration Association. Either
party may invoke this paragraph after providing 30 days' written
notice to the other party. All costs of arbitration shall be divided
equally between the parties. Any award may be enforced by a court of
law.
6. TRANSFER OF RIGHTS. This Agreement shall be binding on any
successors of the parties. Neither party shall have the right to
assign its interests in this Agreement to any other party, unless the
prior written consent of the other party is obtained.
7. TERMINATION. This Agreement may be terminated by ARS by providing
90 days' written notice to the other party.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties and there are no other promises or conditions in any other
agreement whether oral or written. This Agreement supersedes any
prior written or oral agreements between the parties.
9. AMENDMENT. This Agreement may be modified or amended, if the
amendment is made in writing and is signed by both parties.
10. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid or enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited.
<PAGE>
11. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to
enforce any provision of this Agreement shall not be construed as a
waiver or limitation of that party's right to subsequently enforce and
compel strict compliance with every provision of this Agreement.
12. APPLICABLE LAW. This Agreement shall be governed by the laws of
the State of New York.
Licensor:
Sydney Allan Harland
By: ____________________________________________________
Sydney Allan Harland
Licensee:
Ameri-can Railway Systems, Incorporated
By: ____________________________________________________
Peter Ross, President and C.O.O.
DECLARATION FOR PATENT APPLICATION
As a below named Inventor, I hereby declare that:
My residence, post office address and citizenship are as stated below next
to my name.
I believe I am the original, first and sole inventor (if only one name is
listed below) or an original, first and joint inventor (if plural names are
listed below) of the subject matter which is claimed and for which a patent
is sought on the invention entitled Automated Railway Crossing the
specification of which is attached hereto unless the following box is
checked:
___ was filed on _________________ as United States Application Number
or PCT International Application Number ____________________ and
was amended on __________________ (if applicable).
I hereby state that I have reviewed and understand the contents of the above
identified specification, including the claims, as amended by any amendment
referred to above.
I acknowledge the duty to disclose information which is material to
patentability as defined in 37 CFR Sect. 1.56.
I hereby claim foreign priority benefits under 35 U.S.C. Sect. 119(a)-(d)
or Sect. 385(b) of any foreign application(s) for patent or inventor's
certificate, or Sect. 365(a) of any PCT International application which
designated at least one country other than the United States of America,
listed below and have also identified below, by checking the box, any
foreign application for patent or Inventor's certificate, or of any PCT
International application having a filing date before that of the application
on which priority is claimed.
Prior Foreign Application(s)
Priority Not Claimed
_____________ ______________ _____________________ __________
(Number) (Country) (Day/Month/Year Filed)
_____________ ______________ _____________________ __________
(Number) (Country) (Day/Month/Year Filed)
I hereby claim the benefit under 35 U.S.C. Sect. 119(a) of the United States
provisional application(s) listed below.
_____________________ January 23, 1998
(Application Number) (Filing Date)
____________________ _________________
(Application Number) (Filing Date)
I hereby claim the benefit under 35 U.S.C. Sect. 120 of any United States
application(s), or Sect. 365(c) of any PCT international application
designating the United States of America, listed below and, insofar as the
subject matter of each of the claims of this application is not disclosed in
the prior United States or PCT International application in the manner
provided by the first paragraph of 35 U.S.C. Sect. 112, I acknowledge the
duty to disclose information which is material to patentability as defined
in 37 CFR Sect. 1.56 which became available between the filing date of the
prior application and the national or PCT International filing date of this
application.
____________________ ______________ ____________________________________
(Application Number) (Filing Date) (Status - patented, pending, abandoned)
____________________ ______________ ____________________________________
(Application Number) (Filing Date) (Status - patented, pending, abandoned)
I hereby appoint the following attorney and agent to prosecute this
application and to transact all business in the Patent and Trademark Office
connected therewith: Rochelle Lieberman, Esquire
Registration No. 39,276
Address all telephone calls to: Rochelle Lieberman, Esquire
at telephone number: (301) 946-7775
Address all correspondence to: Lieberman & Brandsdorfer, LLC
12221 McDonald Chapel Drive
Gaithersburg, MD 20878
I hereby declare that all statements made herein of my own knowledge are
true and that all statements made on information and belief are believed to
be true: and further that these statements were made with the knowledge that
willful false statements and the like so made are punishable by fine or
imprisonment or both, under Section 1001 of Title 18 of the United States
Code and that such willful false statements may jeopardize the validity of
the application or any patent issued thereon.
Full name of first joint inventor, if any (given name,
family name) Sydney A. Harland
First inventor's signature /s/ Sydney A. Harland Date _____________
Residence _________________________ Citizenship Canadian
Post Office Address 2155 Winchester Court
Burlington, ON, Canada 3M7 L7P
Full name of second joint inventor, if any (given name, family
name) ____________________
Second inventor's signature __________________ Date______________
Residence ________________________ Citizenship ______________
Post Office Address ___________________________________
____________________________________
_____ Additional Inventors are being named on separately numbered sheets
attached hereto.
Ameri-can Equipment Sales & Leasing, Inc.
3 Robert Speck Parkway, 9th Floor
Mississauga, Ontario
Canada L4Z 2G5
Tel: 905-276-6995 Fax: 905-277-1232
May 27, 1998
Feldhammer Fishman
5050 DeSorel, #110
Montreal, Quebec
H4P 1G5
Dear Mr. Fishman,
This letter is to advise that we wish to transfer the following assets
to Ameri-can Railway Systems Incorporated (ARS) for consideration of
50,000 shares of ARS's Common Stock at a par value of $000.1. The company
agrees to transfer all outstanding proposals, purchase orders and
other agreements, relationships and goodwill. The Company also agrees
to enter into a non-compete agreement.
We thank you in advance for all of your help in this matter. If you
require any additional information please feel free to contact me.
Sincerely yours,
/s/ Sydney Harland
Sydney Harland,
President
F E L D H A M M E R
F I S H M A N
C 0 M P T A B L E S A G R E E S
C H A R T E R E D A C C 0 U N T A N T S
To the Directors of Ameri-Can Railway Systems Incorporated,
We hereby consent to the filing of our Report of Independent Auditors
along with the related Financial Statements or copies therof, as an
exhibit to the Registration Statement and the statement made regarding
our firm under the caption "Auditors' Report" in the Registration
Statement of Ameri-Can Railway Systems Incorporated.
/s/ Feldhammer Fishman
Feldhammer Fishman S.E.N.C.
5050 De Sorel, Suite 110, Montreal, Quebec, Canada H4P 1G5
Tel. (514) 735-5375 Fax: (514) 738-8137 Internet: [email protected]
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