U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-SB
AMENDMENT NO. 1 TO GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS
ISSUERS UNDER SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
AMERISTAR NETWORK, INC.
(Name of Small Business Issuer in its charter)
Delaware 84-1370942
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(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification
No.)
321 North Mall Dr.
St. George, UT 84790
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 530-677-3233
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Securities to be registered under Section 12(g) of the Act:
Title of each class Name of each
exchange on which
to be so
registered each class
is to be
registered
None N/A
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Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of class)
KENNETH G. EADE
Attorney at Law
143 South B Street
Oxnard, CA 93030
805-487-0403
July 12, 1999
United States Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549
Attn: Goldie B. Walker
Re: Ameristar Network, Inc.
Registration Statement on Form 10-SB
File No. 0-26157
Filed May 21, 1999
Dear Ms. Walker:
Enclosed herewith is the registrant's amendment to its Form 10SB, which
it filed on May 21, 1999. The amendment contains the audited financial
statements of the company as of March 31, 1999, which, we have agreed,
will resolve your comments of May 25, 1999. Please be advised that the
Company has been placed on the OTC Bulletin Board's eligibility list
for August 2, 1999. You have indicated that the amendment will be given
priority in review, so, if any comments are made, they may be acted upon
before July 30, 1999. Thank you for your cooperation in this matter.
Very truly yours,
/S/ Kenneth G. Eade
KENNETH G. EADE
cc: O. Russell Crandall
Item 1. Description of Business
Business Development
Ameristar Network, Inc. (the "Company"), a Delaware Corporation,
was incorporated on September 23, 1996. The Company is engaged in the
business of developing its proprietary Internet system, AmeriTrac, for
processing, loan approval, and loan delivery of mortgage loans. The
Company's mailing address is 321 North Mall Drive, suite O-102, St.
George, Utah 84790, and the telephone number of its principal executive
office is (435) 656-3677 - (800) 810-7687.
In General
The Company will equip mortgage brokers with a encrypted password
protected Internet site which will feature underwriters and lenders, and
an Internet site for pre-qualifying potential home buyers, and the "point
of sale" origination of mortgage loans. The Company is also in the
development of a nationwide network of real estate sales associates.
The Internet system will provide mortgage loan professionals and the real
estate sales associate with the tools and training necessary to start the
loan application using the propriety Internet system. The Company has
recently signed a Software Licensing Purchase Agreement with Mortgage
Internet Technologies which will provide the AmeriTrac System with the
necessary technologies.
This System will enable mortgage brokers and real estate sales
associates to prepare and submit loan applications for clients. The concept of
"point of sale" loan origination has been promoted and supported by the
National Association of Realtors for several years. The management of the
Company believes that real estate sales associates continue to play a
critical role in helping their clients obtain a home loan. New amendments to
Regulation X, implementing the Real Estate Settlement Procedures Act of 1974
("RESPA"), by the Department of Housing and Urban Development became effective
last year. These new regulations allow for the payment for services rendered
in the origination of a federally regulated mortgage loan.
The Services
In General
The residential mortgage industry accounts for annual transactions of
approximately one trillion dollars in the United States. The National
Association of Realtors reports that membership in the residential mortgage
industry is approximately one million. The mortgage lending industry is
extremely competitive with a significant portion of the market share being
controlled by relatively few participants. This dominance of large national
mortgage companies is the reason that there is a need for smaller mortgage
brokers to participate in the real estate transaction at the time of the
actual
sale. This is referred to as the "point of sale" real estate transaction.
The technology allows the real estate sales associate to participate in the
process without extensive mortgage training or experience.
The AmeriTrac process enables the real estate sales associate to
participate in the point of sale application process and be compensated for
it. This is accomplished by utilization of the Company's proprietary loan
origination Internet system, mortgage loan sourcing, advertising, support
services, and the nationwide network of mortgage brokers which the Company is
developing. As a result, AmeriStar Mortgage Brokers will capture a growing
share of the mortgage loan origination market.
The Company markets its proprietary Internet and Internet software
technologies
to the mortgage broker and real estate industries. To accomplish these goals,
the Company intends further develop and implement this system that allows real
estate professionals and others to electronically evaluate buyer data, to
pre-qualify buyers for a mortgage loan, to input and compile a loan
application
and information packet and transmit that application to a mortgage broker for
processing, and then to one of several AmeriStar approved lenders on the
Internet
system for approval; and to monitor the progress of the loan.
The Company solicits mortgage brokers and loan officers who are equipped
with
the necessary electronic tools, computers, fax machines, modems, telephone
systems, copiers, printers, software processing programs, and qualified loan
specialists, processors and other staff management to meet the demand of the
marketplace. The Company uses the Internet, it's Proprietary Internet system,
E-Mail, and modem transmission to enable the transfer of information from one
system to another. This enables the transmission of loan applications, credit
reports, appraisals, mortgage insurance, title insurance, housing insurance,
and
all other real estate documentation.
Description of Technology
The AmeriTrac Wholesale Lender System
An intricate and very necessary part of the process of mortgage loan delivery
is
the lender interaction with the investor, known within the mortgage lending
industry as the "wholesaler." Each day the wholesaler will fax rate sheets to
the mortgage broker, which rate sheets are used to price loan products. The
wholesaler competes with other wholesalers for the business of the broker.
The
broker commits to a loan product and rate by "locking" their customer with a
specific wholesaler. This process will be done online within the Wholesale
Lender Center (WLC) by the AmeriTrac system, which will save the wholesaler
time
and money. The WLC is an area that is built into the Business Development
Center
(BDC). By entering the BDC, the loan originator may choose the "Wholesale
Network" button to access a list of participating wholesale lending
institutions,
their rate sheets, loan programs and lock sheets. The Company operates an
Internet Web site at www.ameristarnetwork.com.
The Virtual Lender (tm)
To the mortgage professional, the Internet requires a certain level
of commitment to Online technology, including site construction, education,
administrative, process and a basic understanding of how they will need to
react to business procured by the Internet. The Virtual Lender (tm),
developed by Mortgage Internet Technologies, Inc., and exclusively licensed
to the Company for wholesale mortgage lending within the territory of the
United States, Mexico and Canada, was designed to answer these concerns and
has proven to be a widely accepted tool for the mortgage professional. The
Virtual Lender (tm) will take the mortgage professional from no involvement in
the Internet to being completely
capable of online loan origination in less than 20 minutes, process that
usually takes 30-60 days, and costs thousands of dollars. Wholesale
customers of the Company may access the wholesale network center" in the
business developmentcenter of Mortgage Internet Technologies, Inc.'s
Internet Web Site at www.vlender.com. AmeriStar Network Inc. has fully paid
for and owns the technology and rights to the Wholesale Lender Center
located within the Virtual Lender (MIT's proprietary product) and is
proceeding to finish its deployment. MIT has over 250 mortgage brokers
on their system all of which will have access to the Wholesale Lender System.
The Company and Mortgage Internet Technolgoies, Inc. have entered into
a non-exclusive letter of intent, whereby the Company intends to acquire
100% of the issued and outstanding shares of Mortgage Internet Technologies,
Inc., MIT) in exchange for $460,000 in cash and 600,000 shares of company
common stock. The completion of the transaction was announced in May, 1999
by the Board of Directors of both corporations, but will not be officially
completed until the Company completes the cash delivery requirements of the
agreement and approval by Mortgage Internet Technologies' shareholders. The
company and its Board of Directors intend to proceed with the closing of the
transaction as soon as capital is available, but there can be no assurance
that the Company will be able to obtain said capital.
Patents
The Company holds no patents for its service-related software. However,
the Company's software is proprietary and is protected by United States
Copyright law.
Raw Materials and Principal Suppliers and Vendors
There are no raw materials used in the Company's services, and no vendors
of any components are required.
Competition
Today there are several mortgage Internet development sites, but none of the
companies offer Online Mortgage Services affordable and realistic to rapidly
and efficiently integrate into an existing marketing and business plan, that
improves the bottom line. The concept of "point of sale" loan origination
has been promoted and supported by the real estate industry for several years.
The management of the Company believes that real estate associates continue
to play a critical role in helping their clients obtain a home loan. New
amendments to Regulation X, implementing the Real Estate Settlement
Procedures Act of 1974 ("RESPA"), by the Department of Housing and Urban
Development became effective last year. These new regulations allow for
the payment for services rendered in the origination of a federally
regulated mortgage loan. The real estate sales associate will play critical
role on the Virtual LenderTM system. None of the competition integrates all
of the services into one package.
There are numerous computer loan origination systems available on the market
today. Most of the national franchised real estate operations are
considering or have entering into relationships to provide in house lending.
Almost all in-house lending operations involve an arrangement between the
mortgage broker or mortgage banker and the real estate broker/owner. Real
estate sales associates are typically not compensated. Company's concept
of including real estate sales associates in the income stream will give
the Company an edge on the competition.
Marketing
AmeriStar will market its AmeriTrac , online mortgage services, loan
origination and sourcing system direct to mortgage brokers and to
real estate brokers and their sales associates. The Company will also
market its services through real estate and mortgage industry trade
shows, direct mail, print media advertising, and through the Internet.
The Company officially unveiled the AmeriTrac wholesale lender network
to the national lending community at the Net 99 national Mortgage
Conference held in Chicago in June, 1999.
Employees
The Company presently employs one employee, the President and founder of the
Company.
Item 2. Management's Discussion and Analysis of Plan of
Operations
Plan of Operations
The Company is engaged in the business of providing an Internet Wholesale
Lending Network, offering mortgage lending professionals the capability to
originate real estate loans online, as well as to provide a lender directory
and consumer resource for online lenders and a national retail loan referral
network, which is currently under development. The Company has financed its
operations to date through the sale of its securities. See Item
10 - "Recent Sales of Unregistered Securities."
The Company's plan of operations over the next 12 months includes the
promotion to the wholesale mortgage lender community of its AmeriTrac
wholesale lender network. The Company officially unveiled the system
to the national lending community at the Net 99 National Mortgage Conference
to be held
in Chicago in June, 1999.
The Company plans to complete its acquisition of 100% of the issued and
outstanding stock of Access Business Capital/AmeriStar Mortgage, a Delaware
Corporation, with whom it signed a letter of intent on March 17, 1999, in
exchange for 250,000 shares of company common stock. Access Business
Capital is a nonbank mortgage loan originator with emphasis in the
commercial financing area, both SBA guaranteed and conventional. It has
closed two commercial loans this year, representing approximately $2.4
million in loaned funds, and currently has 11 loans in review, which
represent approximately $25 million in loaned funds. Access Business
Capital will operate as a wholly owned Company subsidiary.
The Company, on April 26, 1999, completed its acquisition of 100% of the
issued and outstanding shares of CVS Technologies, Inc., for 5,500,000
shares of company common stock. This acquisition provides the Company
with the exclusive license of CVS "Y2K fix" for mortgage industry servers.
CVS has developed a Server 98 compliant 4 digit real time clock, designed
exclusively for servers. Compaq,Dell, IBM and all clone AT servers
currently use non-Y2K compliant 2 digit RTC clocks. Company customers
will be able to download the CVS "Real Time Clock Fix for Servers," from
the Company web site or E-mail, which will enable the customer to solve
potential Year 2000 issues.
On May 13, 1999, the Company announced the completion of its acquisition
of 100% of the issued and outstanding shares of Mortgage Internet
Technologies, Inc., (MIT) in exchange for $460,000 in cash and 600,000
shares of company common stock. However, the company's announcement was
premature, as the acquisition will not be consummated until MIT's
shareholders approve the acquisition, which will not take place until the
company has satisfied all of its cash payment requirements called for under
the letter of intent and acquisition agreement. The Company intends to
proceed with the closing of the acquisition agreement, but there can be
no assurance that the Company will be able to obtain the remainder of the
capital required to do so. The Company has fully paid for and owns the
technology and rights to the Wholesale Lender Center located within the
Virtual Lender (MIT's proprietary product) and is proceeding to finish
its deployment. MIT has over 250 mortgage brokers on their system all
of which will have access to the Wholesale Lender System. The Virtual
Lender System has proven to be a widely accepted tool for the mortgage
professional. The Virtual Lender (tm) will take the mortgage
professional from no involvement in the Internet to being completely
capable of online loan origination in less than 20 minutes, process
that usually takes 30-60 days, and costs thousands of dollars.
The Company also plans to consummate its acquisition of all of the assets
and 49% of the issued and outstanding common stock of Government Micro
Resources, Inc. (GMR). GMR is engaged in the business of providing
information technolgies to the public and private sector, and a
manufacturer of specialized main frame computers.
Patents
The Company holds no patents for its service-related software.
However, the Company's software is proprietary and is protected by United
States copyright law.
Forward Looking Statements
This registration statement contains forward-looking statements. The
Company's expectation of results and other forward-looking statements
contained in this registration statement involve a number of risks and
uncertainties. Among the factors that could cause actual results to differ
materially from those expected are the following: business conditions and
general economic conditions; competitive factors, such as pricing and
marketing efforts; and the pace and success of product research and
development. These and other factors may cause expectations to differ.
Year 2000 Compliance
With respect to Year 2000 compliance, the Company has performed an audit
of all of its computer hardware, internal accounting and software
applications and found all to be Year 2000 compliant or capable. As of
this date, the Company has been given assurances from its banking
institution and transfer agent that they are working toward compliance
or are in compliance. The Company has completed an audit of its vendors
and suppliers to identify relevant Year 2000 issues, and has found them all
to be Year 2000 compliant.
The Company has recently acquired CVS Technologies, and had previously
entered into an agreement with CVS to provide the Company with the
exclusive license within the North American Mortgage Industry, of CVS "Y2K
fix" for mortgage industry servers. CVS has developed a Server 98
compliant 4 digit real time clock, designed exclusively for servers.
Compaq,Dell,
IBM and all clone AT servers currently use non-Y2K compliant 2 digit RTC
clocks. Company customers will be able to download the CVS "Real Time Clock
Fix
for Servers," from the Company web site or E-mail, which will enable the
customer to solve potential Year 2000 issues. See Item 2 - Management's
Discussion and Analysis and Plan of Operations.
Item 3. Description of Property
The Company leases professional offices from Mortgage Internet Technologies,
Inc. on a month-to-month basis. The Company has the proprietary rights to
its web site, www.ameristar.com, and an exclusive license for
utilization of the Virtual Lender (tm) system for wholesale lending services
to its customers. The Company has recently acquired Mortgage Internet
Technologies,
Inc., the owner of the virtual lender system. See Item 2 - Management's
Discussion and Analysis and Plan of Operations.
Item 4. Securities Ownership of Certain Beneficial Owners and
Management
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the end of the
fiscal year, 1998, by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and
outstanding shares of common stock, (ii) each of the Company's directors and
executive officers, and (iii) all directors and executive officers as a
group.
Name and Address Number of Shares
Percentage Owned
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O. Russell Crandall
Family Trust(1) 625,000 30.96%
Bryan Richmond(2) 200,000 9.9%
Shirman Milliner(2) 225,000 11.1%
Mary C. Milliner(2) 300,000 14.86%
Bill Means(2) 225,000 11.1%
David R. Werner(3)
Officers and Directors
as a Group 625,000 30.96%
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(1) O. Russell Crandall, Jr. is the President and Director of the
Company. His current holdings are now 3,325,000 shares of common stock.
(2) These individuals are former officers and directors of the Company, who
are no longer affiliated with the Company.
(3) David R. Werner is a director of the Company, and the President and
Chief Executive Officer of Mortgage Internet Technologies, Inc. As of
December 31, 1998, he held no shares of Company common stock. He now holds
280,000 shares.
Item 5. Directors, Executive Officers, Promoters and Control
Persons
The Executive Officers of the Company, and their ages, are as
follows:
Name Age Position
- ---- --- --------
O. Russell Crandall 54 President, Director,
CFO
Secretary
David R. Werner 29 Director
O. Russell Crandall, Jr. Mr. Crandall is the founder of AmeriStar Network,
Inc.,and current CEO and Director of the Company. From August of 1994 to
June of 1996, Mr. Crandall was the Executive Vice President and
Secretary/Treasurer of CompuLoan Financial Services Group, a Salt Lake City
mortgage broker and computer loan origination company, and was responsible
for development of the software system and organization and management. He
developed participating mortgage lender lists in excess of 65 lenders, and
was responsible for RESPA compliance. During his tenure, he managed a staff
of over 30 employees in loan processing, loan origination and loan closing.
From June of 1992 to May of 1993, Mr. Crandall was a loan specialist with
Commonwealth United Mortgage, Interwest Mortgage Services. From April of
1988 to June of 1992, Mr. Crandall provided sales and consulting services
in the real estate development and sales industries. He attended Boise
State College from 1964 through 1967 and holds a Real Estate Certification
with the State of Utah. David R. Werner. Mr. Werner is a Director of the
Company. Since 1996, he has been the Chief Executive Officer of Mortgage
Internet Technologies, Inc., an Internet services company specializing in
automated turnkey solutions for the mortgage banker and broker. Mr. Werner
has been a speaker for various mortgage symposiums on how technology is
changing the mortgage industry and the role of the loan originator.
Mortgage Internet Technolgoies, Inc. Has been featured in print
publications including "Mortgage Technology Magazine", "1999 Guide to
Mortgage Industry Resources on the Net," "Loan Originator Magazine,"
and "Broker Magazine." From 1995 through 1996, Mr. Werner was a
loan officer for Home One Mortgage, specilizing in investment properties.
From 1991 thorugh 1993, he served as real estate agent/broker for
Prime Realty Group (REMAX).
Item 6. Executive Compensation
The following table sets forth the cash and non-cash compensation paid by
the Company to its Chief Executive Officer and all other executive officers
for services rendered during the fiscal year ended December 31, 1998.
No salaries are being paid at the present time. The salaries of executive
officers for the fiscal year ended 1998 are accruing and owed by the Company.
There were no grants of options or SAR grants given to any executive
officers during the last fiscal year.
Annual Compensation
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Name and Position Salary Bonus Annual Deferred
Salary
O.Russell Crandall, Jr. $30,000 -0- -0-
Item 7. Certain Relationships and Related Transactions
There have been no transactions since the beginning of fiscal year 1998, or
any currently proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount involved
exceeds $60,000, and in which any of the officers, or directors, or holders of
over 5% of the Company's stock have or will have any direct or indirect
material interest. The Company does not currently have any policy toward
entering into any future transactions with related parties.
Item 8. Legal Proceedings
There are no pending legal proceedings to which the Company is a party or to
which the property interests of the Company are subject.
Item 9. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
The Company's Common Stock has been listed on the OTC Bulletin
Board under the symbol "AMWK" since December, 1998. From inception of trading
through December 31, 1998, the high and low last sale prices were $2.25
per share and $.875 per share, respectively. The Company considers its
Common stock to be thinly traded and that any reported bid or sale prices
may not be a true market-based valuation of the Common Stock. As of
December 31, 1998, there were 84 record holders of the Company's Common
Stock. As of March 31, 1999, there were 71 shareholders of record of the
Company's common stock. The Company has not paid any cash dividends since
its inception and does not contemplate paying dividends in the foreseeable
future. It is anticipated that earnings, if any, will be retained for the
operation of the Company's business.
The following table sets forth the range of high and low bid information for
each full quarterly period of the last fiscal year:
Period Reported Average High Bid
Average Low
Bid
Quarter ended December 31, 1998 2
1
Quarter ended March 31, 1999 3
1
Item 10. Recent Sales of Unregistered Securities
Since its inception, the Company has sold unregistered securities
in a Regulation D, Rule 504 exempt offering, which was commenced on
June 1, 1997. The offering closed March 26, 1999, and resulted in the
sale of 176,589 shares, gross offering proceeds of $88,713, and services
valued at $25,000.
Item 11. Description of Securities
Common Stock
The Company is authorized to issue 90,000,000 Shares, all of which are
Common Stock at a par value of $.001. The presently outstanding shares
of Common Stock are fully paid and non-assessable. There are currently
outstanding 2,018,886 Shares of Common Stock. Holders of shares of Common
Stock are entitled to one vote per share on all matters submitted to a vote
of the shareholders. Shares of Common Stock do not have cumulative
voting rights, which means that the holders of the majority of the
shareholder votes eligible to vote and voting for the election of the
Board of Directors can elect all members of the Board of Directors.
Holders of shares of Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders generally. The approval
of proposals submitted to stockholders at a meeting other than for the
election of directors requires the favorable vote of a majority of the
shares voting, except in the case of certain fundamental matters (such as
certain amendments to the Certificate of Incorporation, and certain
mergers and reorganizations), in which cases Nevada law and the Company's
Bylaws require the favorable vote of at least a majority of all outstanding
shares. Stockholders
are entitled to receive such dividends as may be declared from time to time by
the Board of Directors out of funds legally available therefor, and in the
event of liquidation, dissolution or winding up of the Company to share
ratably in all assets remaining after payment of liabilities. The holders
of shares of Common Stock have no preemptive, conversion, subscription or
cumulative voting rights.
Under current Delaware law, a shareholder is afforded dissenters' rights
which, if properly exercised, may require the Company to purchase his or
her shares. Dissenters' rights commonly arise in extraordinary
transactions such as mergers, consolidations, reorganizations, substantial
asset sales, liquidating distributions, and certain amendments to the
Company's certificate of incorporation.
Item 12. Indemnification of Directors and Officers
Delaware Statutes
Section 145 of the Delaware General Corporation Law, as amended, provides
for the indemnification of the Company's officers, directors, employees and
agents under certain circumstances as follows:
(a) A corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative(other than an action by or in the right
of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contender or its equivalent, shall not, of itself,
create a presumpt on that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees)actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no
such directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by
an officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board
of directors deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of this section
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office.
(g) A corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituentcorporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or
is or was serving at the request of such constituent corporation as a
director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this section
with respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(I) For purposes of this section, references to
"other enterprises" shall include employee benefit plans; references to
"fines"
shall include any excise taxes assessed on a person with respect to any
employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit
of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with
exclusive jurisdiction to hear and determine all actions for advancement
of expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a corporation's
obligation to advance expenses (including attorneys' fees).
Certificate of Incorporation
The Company's Certificate of Incorporation provides that the
Company shall indemnify any and all persons who may serve or who have
served at any time as directors or officers who, at the request of the
Board of Directors of the Company may serve, or at any time have served
as directors or officers of another corporation in which the Company at
such time owned or may own shares of stock, or which it was or may be a
creditor, and their respective heirs, administrators, successors and
assigns, against any and all expenses, including amounts paid upon
judgment, counsel fees, and amounts paid in settlement (before or
after suit is commenced), actually or necessarily by such person in
connection with the defense or settlement of any claim, action ,
suit, or proceeding in which they, or any of them, by reason of being
or having been directors or officers of the Company, or such other
corporation, except in relation to matters as to which any such
director or officer of the Company, or such other corporation, or
former director or officer shall be adjudged in any action, suit or
proceeding to be liable for his own negligence or misconduct in the
performance of his duties. The Company's Bylaws also contain a provision
for the indemnification of the Company's directors (see "Indemnification
of Directors and Officers - Bylaws" in Exhibit 3.3).
Item 13. Financial Statements
Report of Independent Certified Public Accountant
Financial Statements
Balance Sheets
Statement of Loss and Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITOR
To the Shareholders and Board of Directors
AMERISTAR NETWORK, INC.
I have audited the accompanying balance sheets of AMERISTAR
NETWORK, INC. (A Development Stage Company) as of December 31, 1998,
and the related statements of operation, stockholders' equity, and
cash flows for year then ended. These financial statements are the
responsibility of the Company's management. My responsibility is
to express an opinion on these financial statements based on
my audit.
The financial statements of AMERISTAR NETWORK, INC. (A
Development Stage Company) as at December 31, 1997 and 1996 were
audited by other auditor whose report dated July 6, 1998, expressed
an unqualified opinion on those statements.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and perform
the audit to obtain reasonable assurance about 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.
I believe that my audit provides a reasonable basis for our
opinion.
The accompanying financial statements have been prepared assuming
the Company will continue as going concern. As discussed in Note 4 to the
financial statements, the Company has an accumulated at December 31, 1998.
These factors raise substantial doubt about the Company's ability to continue
as going concern. Management's plan in regard to these matters is also
discussed in Note 4. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of AMERISTAR NETWORK,
INC. (A Development Stage Company) at December 31, 1998, and the results
of operations and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Oxnard, California
April 28, 1999
Ameristar Network, Inc.
(A Development Stage Company)
Balance Sheet
<TABLE>
<CAPTION>
As of December 31, 1998, 1997 and 1996 1998 1997
1996
<S> : <C> <C>
<C>
ASSETS
Current Assets
Cash in Banks $ 332 $ 4
$ 9,677
Note Receivable 2,265 -
-
Total Current Assets 2,597 4
9,677
Property & Equipment:
Furniture & Equipment 2,523 2,523
Less: Accumulate Depreciation ( 895) (
418)
Total Fixed Assets 1,628 2,105
Other Assets:
Software distribution rights 144,854 301
346
Organization costs 636 871
1,106
Total Other Assets 145,490 3,281
11,129
TOTAL ASSETS $ 149,715 3,281
11,129
Liabilities & Stockholders' Equity
Current Liabilities:
Accounts payable $ 3,680 922
254
Accrued interest payable 417 470
148
Accrued Salaries $ 15,000 -
-
Short term notes payable 10,000 11,550
5,000
Contract payable 140,000
- - -
Total Current Liabilities 169,097 12,942
5,402
Stockholders' Equity:
Common stocks , $.001 par value
Authorized shares - 90,000,000
Issued and outstanding shares
2,018,866 shares, 2,006,500 shares
and 1,575,000 shares, respectively 2,019 2,006
1,575
30 9
Paid in capital 42,663 17,944
4,950
Deficit accumulated during the
development stage ( 64,064) (
29,611) ( 798)
Total Stockholders' Equity 19,382 3,281
5,727
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 149,715 $ 3,281
$ 11,129
See Notes to Consolidated Financial Statements
</TABLE>
Ameristar Network, Inc.
(A Development Stage Company)
Statement of Operations
<TABLE>
<CAPTION>
As of December 31, 1998, 1997 and 1996
December 31,
December 31 to
December 31
1998
1997
1996
<S> <C>
<C>
<C>
Sales: $ - $
- - $
-
Operating Expenses:
Amortization 5,507
280
73
Professional fees 3,880
10,887
-0-
Interest expense 1,071
1,804
148
Telephone 1,834
944
-0-
Depreciation 693
418
-0-
Salaries and wages 15,000
- -0-
-0-
General and administrative expenses 3,936
8,283
432
Travel 2,547
6,197
145
Total Expenses $ 34,468 $
28,813
$ 798
Net loss $ ( 34,468) $ (
28,813)
$ ( 798)
Other Income
Interest income 15
15
-
Total Other Income (Expenses) 15
15
-
Net loss ( 64,064) (
28,813)
( 798)
Earnings(loss) per share $(0.02)
$(0.02)
$(0.00)
See Notes to Financial Statements
</TABLE>
Ameristar Network, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Deficit
Accumulated
Number Common Common
Additional
During the
of Shares Stock at Stock
Paid-in-
Subscriptions Development
Outstanding Par Value
Subscribed Capital
Receivable Stage Total
<S> <C> <C> <C>
<C>
<C> <C> <C>
Balance at
September 23, 1996 (inception)
Net loss for the period ended December 31, 1998
-
(798) $ - $ -
Stocks issued for organization
costs at $.001 per share 1,175,000 $1,175 $
- -
Stocks issued for cash at
$.10 per share 50,000 50
$ 4,950
Stocks issued for marketing
rights at 350,000 350 $
Balance at December 31, 1996 1,575,000 1,575
4,950
(798)
Net loss for the period ended
December 31, 1997
(28,813)
Stocks issued for professional
fees at $.001 per share 95,000 95
Shares issued for cash at $.001
per share 330,000 330
Shares issued for cash at $2.00
Per share 6,500 6
Balance at December 31, 1997 2,006,500 2,006
Net Loss for the period
ended December 31, 1998
( 28,813)
Stocks issued for cash
at $2.00 per share 6,550 7
12,994
Stocks issued for debt
satisfaction at $2.00 per share 5,816 6
Balance at December 31, 1998 2,018,866 2,019
42,663
(64,064)
See Notes to Financial Statements
</TABLE>
Ameristar Network, Inc.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
September 6,
For the period September 23, 1996 (inception) to December 31,
1998
1996(inception)
December 31,
December 31 to
December 31
1998
1997
1996
<S> <C>
<C>
<C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ ( 34,453) $ (
28,813)
$
( 798)
Adjustments To
Reconcile Net Loss
To net cash provided
by operating activities:
Depreciation & amortization 6,971
698
73
Services paid by stocks -
95
-
Increase in accounts receivable 2,265
-
-
Increase (decrease) in accounts payable 2,758
668
254
Increase (decrease) in accrued expenses 14,605
322
148
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES $( 7,854) $(
27,030)
(323)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment $ -
(2,523)
-
Acquisition of software $ (150,000)
- -
-
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES $ (150,000)
(2,523)
(51,924)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Notes payable 9,000
6,550
-
Increase in contract payable 150,000
- -
-
Payments of notes and contract payable (25,550) -
-
Proceeds from issuance of common stock 24,732
13,330
5,000
NET CASH PROVIDED
BY FINANCING ACTIVITIES 158,182
19,880
10,000
INCREASE (DECREASE) IN CASH 328
5(9,673)
9,677
BEGINNING CASH 5 4
9,677
-
ENDING CASH $ 332
4
9,677
DISCLOSURE FROM OPERATING ACTIVITIES
Interest expense $ 1,071
1,804
148
NON CASH DISCLOSURE
1,075 shares issued for incorporation
expenses
1,175
350,000 shares issued for distribution
rights
350
95,000 shares issued for expenses 95
See notes to financial statements
</TABLE>
AMERISTAR NETWORK, INC.
(A Development Stage Company)
Notes to Financial Statements
NOTE 1. BUSINESS ACTIVITY
The Company was incorporated under the laws of the state of Delaware on
September 23, 1996 using the name AMERISTAR NETWORK, INC.
The purpose for which the Corporation is organized is to engage
in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware including, without
limitation, to engage directly or through a subsidiary or subsidiaries in the
business
of acquiring, operate and or managing mortgage brokerage business and to
develop, research, design, produce, buy, sell, license or otherwise deal in
mortgage
technology or related devises which are necessary, useful and desirable in
connection with said business.
The Company has been in the development stage since its formation on
September 23, 1996. Planned principal operations have not commenced.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual method of accounting. Revenues and directly
related expenses are recognized in the period when the goods are shipped to
the customers.
The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
Primary Earnings Per Share amounts are based on the weighted
average number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options
and other convertible issues that may be exercised within ten years of
the financial statement dates.
Depreciation; The cost of property and equipment is depreciated
over the estimated useful lives of the related assets. The cost of
leasehold improvements is depreciated (amortized) over the lesser of
the length of the related assets or the estimated lives of the assets.
Depreciation is computed on the straight-line method for reporting purposes
and for tax purposes.
Estimates; The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual results
could differ from those estimates
NOTE 3. MARKETING RIGHTS
On November 12, 1996, the Company issued 350,000 shares of its common stock to
acquire a Computer Software Systems and Intellectual Property relating to
loan origination and processing systems. The Company valued the Software
License, Sale and Distribution Agreement at the par value ($350) of the shares
issued.
The territory covered by the license is described by the agreement as follows
"All affiliated mortgage brokers of the purchaser, real estate
sale officers, agents, brokers, and infinity groups, in the U.S.A." The
initial
term of the agreement is a period of ten years from November 12, 1996.
NOTE 4. GOING CONCERN
The Company has nominal assets and no current operations with which to create
operating capital. The Company seeks to raise operating capital with which to
seek business opportunities to utilize the technology it has acquired.
NOTE 5. PROPERTY AND EQUIPMENT
The Company capitalizes the purchased and fixtures for major purchases in
excess of $300 per item. Capitalized amounts are depreciated over the
useful life of the assets using the straight-line method of depreciation.
The following is a summary of property and equipment at cost, less
accumulated depreciation:
1998 1997
1996
Furnitures and equipment $2,523 $2,523 $-0-
Less accumulated depreciation ( 895) ( 418)
(0)
Total $1,628 $2,105
$-0-
===== =====
=====
NOTE 6. INCOME TAXES
The Company has adopted the provisions of SFAS No. 109 "Accounting for
Income Taxes". SFAS 109 requires recognition of deferred tax liabilities
and assets for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the differences
between the financial statement and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are
expected to reverse.
The Company has incurred losses that can be carried forward to
offset future earnings if conditions of the Internal Revenue Codes are met.
These losses are as follows:
Year of Loss Amount
Expiration Date
1996 $ 798
2011
1997 28,813
2012
1998 34,453
2013
NOTE 7. NOTES PAYABLE
The Company has five short-term notes payable to four individuals
and a trust.
1998 1997
1996
Note #1 , is not expected to have a material impact on the Company's
financial statements. AMERISTAR NETWORK, INC. (A Development Stage Company)
Notes to Financial Statements
NOTE 10. SOFTWARE LICENSING PURCHASE AGREEMENT
On June 6, 1998, the Company entered into an Agreement with Mortgage
Internet Technologies, (MIT), a New Mexico Corporation, to purchase through
an exclusive license agreement the Wholesale Network Center portion of the
Virtual Lender Software System and Intellectual Property. The agreement
grants the Company perpetual usage of the license and technology for the
United States of America, Mexico and Canada. The Agreement provides the
Company
with a ninety-day period from the contract date to pay the entire purchase
price of $150,000 and an addendum dated July 23, 1998, extended the time for
payment by one hundred eighty days from the date of the addendum.
In the event the Company sells or licenses the Virtual Lender Wholesale
Network Center, MIT will receive a one time license and realty fee of %5
of the purchase price or overall license fee.
NOTE 11. PRIVATE OFFERING OF COMMON STOCK
The Company offers for sale to residents of the States of New York,
Florida, Oklahoma, and the District of Columbia, to "accredited investors"
in the State of Colorado, and outside the United States to Non-US Residents,
up to 100,000 Units ("the Units"), at $2.00 per Unit. Each Unit consists
of one share of Common Stock ($.001 Par Value), and four Stock Purchase
Warrants. Each Warrant entitles the holder thereof to purchase one share of
Common Stock of the Company at a purchase price of $2.00. The original
expiration date of the warrants was July 21, 1998, the Board of Directors
extended the expiration date ninety days from the original expiration date
and provided for an additional extension of ninety days if needed. The
Company has the right to call in the Warrants on fifteen days notice, if not
exercised by the holder prior to the expiration of the fifteenth day's notice,
if not exercised by the Holder prior to the expiration of the fifteen day's
notice period, should the Company's Common Stock trade at or above a $2.75
reported closing bid or trade price for not less than ten consecutive
trading days. The Offering is made in reliance upon an exemption from
registration under the federal and state securities laws pursuant to the
Regulation D, Rule 504, of the Securities and Exchange Commission, and is
made outside of the United States in reliance upon an exemption from
registration under Regulation S of the Securities and Exchange Commission.
Roger G. Castro
Certified Public Accountant
463 West Fifth Street
Oxnard, California 93030
(805) 486-5630
REPORT OF INDEPENDENT AUDITOR
To the Shareholders and Board of Directors
AMERISTAR NETWORK, INC.
I have audited the accompanying balance sheets of AMERISTAR NETWORK, INC.
(A Development Stage Company) as of March 31, 1999 and December 31, 1998,
and the related statements of operation, stockholders' equity, and cash
flows for the three months then ended and for year then ended. These
financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial
statements based on my audit.
The financial statements of AMERISTAR NETWORK, INC., (A Development
Stage Company) as of December 31, 1997 and 1996 were audited by
another auditor whose report dated July 6, 1998, expressed an
unqualified opinion on those statements.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in 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. I believe that
my audit provides a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 4 to the financial statements, the Company has an accumulated
at December 31, 1998. These factors raise substantial doubt a out
the Company's ability to continue as a going concern.
Management's plan in regard to these matters is also discussed in
Note 4. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AMERISTAR NETWORK, INC. (A Development Stage Company) at
December 31, 1998, and the results of operations and cash flows
for the year then ended, in conformity with generally accepted
accounting principles.
/s/ Roger Castro, CPA
Oxnard, California
June 18, 1999
AMERISTAR NETWORK, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
Balance Sheets As of March 31, 1999 and December 31, 1998, 1997
March 31, December 31, December 31,
1999 1998 1997
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash in banks $6,771 $332 $4
Note receivable - 2,265 -
Total Current Assets $6,771 2,597 4
Property & Equipment:
Furniture and equipment $2,523 2,523 2,523
Less: accumulated
depreciation (1,015) (895) (418)
Total Fixed Assets 1,508 1,628 2,105
Other Assets:
Software distribution
rights 240,666 144,854 301
Organization costs 579 636 871
Total Other Assets 241,245 145,490 1,172
TOTAL ASSETS $249,524 $149,715 $3,281
LIABILITIES &
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 16,685 $ 3,680 $ 922
Accrued interest
payable 739 417 470
Accrued salaries 9,000 15,000 -
Short term notes
payabale 10,000 10,000 11,550
Contract payable 195,000 140,000 -
Total Current
Liabilities 231,424 169,097 12,942
Stockholders' Equity:
Common stocks $.001
par value
Authorized shares]
- - 90,000,000
Issued and outstanding
shares - 2,086,347
2,018,866 shares
and 2,006,500
shares, respectively 2,084 2,019 2,006
Paid in capital 120,098 42,663 17,944
Deficit accumulated
during the development
stage (104,082) (64,064) (29,611)
Total Stockholder
Equity 18,100 (19,382) (9,661)
TOTAL LIABILITIES
AND STOCKHOLDER
EQUITY $249,524 $149,715 $ 3,281
</TABLE>
Statement of Loss and Accumulated Deficit for the three months ended March 31,
1999 and for the years ended December 31, 1998, 1997 and 1996
<TABLE>
Cumulative
During
Development March 31, December 31, December 31, December 31,
Stage 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Income $ - $ - $ - $ - $ -
EXPENSES
Amortization 10,105 4,245 5,507 280 73
Professional Fees 34,853 20,086 3,880 10,877 -0-
Interest Expense 3,345 322 1,071 1,804 148
Telephone 3,276 498 1,834 944 -0-
Depreciation 1,231 120 693 418 -
Salaries & Wages 24,000 9,000 15,000 - -
General and
Administrative
Expenses 16,556 3,915 3,936 8,283 432
Travel 10,728 1,839 2,547 6,197 145
Total Expenses 104,104 40,025 34,468 28,813 798
Net Loss
Before Other
Income (104,104) (40,025) (34,468) (28,813) (798)
OTHER INCOME
Interest Income 22 7 15
22 7 15
NET LOSS (104,082) (40,018) (34,453) (28,813) (789)
Net Loss Per Share $ (0.02) (0.02) (0.01) (0.00)
</TABLE>
STATEMENT OF CASH FLOWS FOR PERIOD SEPTEMBER 6, 1996 (INCEPTION) TO
MARCH 31, 1999
<TABLE>
Cumulative
During
Development March 31, December 31, December 31, December 31,
Stage 1999 1998 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS (104,082) (40,018) (34,453) (28,813) (798)
ADJUSTMENTS TO RECONCILE NET LOSS
TO NET CASH USED BY OPERATING ACTIVITIES:
DEPRECIATION
& AMORITIZATION 11,336 4,365 6,200 698 73
SERVICES FOR
STOCK IN LIEU
OF CASH 25,095 25,000 95
(INCREASE)
DECREASE IN
ACCRUED EXPENSES 9,739 (5,637) 14,906 322 148
(41) (41) -
(41,268) (1,061) (12,854) (27,030) (323)
CASH FLOWS FROM INVESTING ACTIVITIES
ACQUISITION OF
PROPERTY AND
EQUIPMENT (2,523) (2,523)
ACQUISION OF
SOFTWARE (250,000) (100,000) (150,000)
(152,523) (100,000) (150,000) (2,523)
CASH FLOWS FROM FINANCING ACTIVITIES
INCREASE (DECREASE)
IN SHORT-TERM
NOTES PAYABLE 10,000 - (1,550) 6,660 5,000
INCREASE IN
CONTRACT
PAYABLE 250,000 100,000 150,000
(55,000) (45,000) (10,000)
95,562 52,500 24,732 13,330 5,000
NET CASH
PROVIDED BY
FINANCING
ACTIVITIES 300,562 107,500 163,182 19,880 10,000
INCREASE (DECREASE)
IN CASH 6,771 6,439 328 (9,673) 9,677
BEGINNING CASH - 332 4 9,677 -
ENDING CASH 6,771 6,771 332 4 9,677
DISCLOSURE FROM OPERATING ACTIVITIES
INTEREST EXPENSE 3,023 1,071 1,804 148
NON-CASH
DISCLOSURE
1,075,000 shares
issued for
incorporation
expenses 1,175 1,175
350,000 issued
for distribution
rights 350 350
95,000 shares
issued for expenses 95 95
14,981 shares issued
for services 25,000 25,000
[END TABLE CODES]*******************************
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD SEPTEMBER 23, 1996 (INCEPTION) TO MARCH 31,
1999
[BEGIN TABEL CODES}*************************************
Deficit
Number Accumulated
Of Common Additional During the
Shares Stock Paid-In Development
Outstanding at Par Value Capital Stage
Balance at
September 23, ]
1996
(inception) $ - $ - $ - $ -
NET LOSS
FOR PERIOD
ENDED DECEMBER 31,
1996 (798)
STOCKS ISSUED
FOR ORGANIZATIONAL
COSTS AT $.001
PER SHARE 1,175,000 1,175
STOCKS ISSUED
FOR CASH AT $.10
PER SHARE 50,000 50 4,950
STOCKS ISSUED
FOR MARKETING
RIGHTS AT 350,000 350
BALANCE AT DECEMBER
31, 1996 1,575,000 1,575 4,950 (798)
NET LOSS FOR
PERIOD ENDED
DECEMBER 31, 1997 (28,813)
SHARES ISSUED
FOR PROFESSIONAL
FEES 95,000 95
SHARES ISSUED
FOR CASH 330,000 330
SHARES ISSUED
FOR CASH 6,500 6 12,994
BALANCE AT
DECEMBER 31,
1997 2,006,500 2,006 17,944 (29,611)
NET LOSS FOR
THE PERIOD
ENDED DECEMBER
31, 1998 (34,453)
STOCKS ISSUED
FOR CASH 6,500 7 13,093
STOCKS ISSUED
FOR DEBT
SATISFACTION 5,816 6 11,626
BALANCE AT
DECEMBER 31,
1998 2,018,886 2,019 42,663 (64,064)
NET LOSS FOR
THREE MONTHS
ENDED (40,018)
STOCK ISSUED
FOR CASH 52,500 50 52,450
STOCKS ISSUED
FOR SERVICES 14,981 15 24,985
BALANCE AT
MARCH 31,
1999 2,086,347 2,084 120,000 (104,082)
<S> <C> <C> <C> <C>
</TABLE>
The Company was incorporated under the laws of the state of Delaware on
September 23, 1996 using the name AMERISTAR NETWORK, INC. The purpose
for which the Corporation is organized is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware including, without limitation,
to engage directly or through a subsidiary or subsidiaries in the
business of acquiring, operate and or managing mortgage brokerage business
and to develop, research, design, produce, buy, sell, license or otherwise
deal in mortgage technology or related devises which are necessary, useful
and desirable in connection with said business.
The Company has been in the development stage since its formation on
September 23, 1996. Planned principal operations have not commenced.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Company uses the accrual method of accounting.
Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customers. The Company considers
all short term, highly liquid investments that are readily convertible,
within three months, to known amounts as cash equivalents. The
Company currently has no cash equivalents.
Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
Depreciation; The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of
leasehold improvements is depreciated (amortized) over the lesser of
the length of the related assets or the estimated lives of the assets.
Depreciation is computed on the straight-line method for reporting
purposes and for tax purposes.
Estimates; The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
NOTE 3. MARKETING RIGHTS
On November 12, 1996, the Company issued 350,000 shares of its common
stock to acquire a Computer Software Systems and Intellectual Property
relating to loan origination and processing systems. The Company
valued the Software License, Sale and Distribution Agreement at the par
value ($350) of the shares issued. The territory covered by the
license is described by the agreement as follows; All affiliated
mortgage brokers of the purchaser, real estate sale officers, agents,
brokers, and infinity groups, in the U.S.A. The initial term of the
agreement is a period of ten years from November 12, 1996.
NOTE 4. GOING CONCERN
The Company has nominal assets and no current operations with which
to create operating capital. The Company seeks to raise operating
capital with which to seek business opportunities to utilize the
technology it has acquired.
NOTE 5. PROPERTY AND EQUIPMENT
The Company capitalizes the purchased and fixtures for major purchases
in excess of $300 per item. Capitalized amounts are depreciated over
the useful life of the assets using the straight-line method of
depreciation.
The following is a summary of property and equipment at cost,
less accumulated depreciation:
1998 1997 1996
Furniture and equipment $2,523 $2,523
$-0-
Less accumulated depreciation ( 895) ( 418)
( 0)
Total $1,628 $2,105
$-0-
===== ===== ==
NOTE 6. INCOME TAXES
The Company has adopted the provisions of SFAS No. 109 Accounting
for Income Taxes. SFAS 109 requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax
returns. Under this method, deferred tax liabilities and assets
are determined based on the differences between the financial statement
and tax basis of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.
The Company has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal Revenue Codes are met.
These losses are as follows;
Year of Loss Amount Expiration Date
1996 $ 798 2011
1997 28,813 2012
1998 34,453 2013
NOTE 7. NOTES PAYABLE
The Company has five short-term notes payable to four individuals and a trust.
1998 1997 1996
Note #1 To a related party due on demand bearing interests
$ 0 $ 2,800 $ 0
At 8% per annum, note dated September 2, 1997
Note #2 To a trust due on demand bearing interest at 8%
Per annum, note dated May 27, 1997 0 5,000 0
Note #3 To an individual due on demand bearing interest
At 18% per annum, note dated February 11, 1997
0 2,750 0
Note #4 To an individual due on demand interest at 10%
Per annum, note dated October 21, 1997
1,000 1,000
Note #5 To an individual due May 11, 1997, interest at
18% per annum 0 0 5,000
Note #6 To an individual due in ninety days at 18% per 5,000
0 0
annum, note dated July 1, 1998
Note #7 To an individual due on at 18% per 4,000 0
0
annum, note dated Decmber 11, 1998 _______ ________
_______
Total $ 10,000 $ 11,550
$ 5,000
====== ======= ======
NOTE 8. RELATED PARY TRANSACTIONS
The Company issued 350,000 shares of its common stock to an officer of the
Company to acquire marketing rights (see note 3.).
The Company purchased furniture and fixtures and computer equipment for
$2,524 from an officer of the Company.
NOTE 9. NEW TECHNICAL PROUNCEMENTS
In February 1997, SFAS No. 129, Disclosure of Information about Capital
Structure: was issued effective for periods ending after December 15, 1997.
The Company has adopted the disclosure provisions of SFAS No. 129, effective
with the fiscal year ended December 31, 1997.
Note #9 ? New Technical Pronouncements Continued
In June 1997, SFAS No. 130, Reporting Comprehensive Income was issued
effective for fiscal years beginning after December 31, 1997, with
earlier application permitted. The Company has elected to adopt SFAS
No. 130, with the fiscal year ended December 31, 1998. Adoption of
SFAS 130, is not expected to have a material impact on the Company's
financial statements.
NOTE 10. SOFTWARE LICENSING PURCHASE AGREEMENT
On June 6, 1998, the Company entered into an Agreement with Mortgage
Internet Technologies, (MIT), a New Mexico Corporation, to purchase
through an exclusive license agreement the Wholesale Network Center
portion of the Virtual Lender Software System and Intellectual Property.
The agreement grants the Company perpetual usage of the license and
technology for the United States of America, Mexico and Canada. The
Agreement provides the Company with a ninety-day period from the contract
date to pay the entire purchase price of $150,000 and an addendum dated
July 23, 1998, extended the time for payment by one hundred eighty days
from the date of the addendum.
In the event the Company sells or licenses the Virtual Lender Wholesale
Network Center, MIT will receive a one time license and realty fee of %5
of the purchase price or overall license fee.
NOTE 11. PRIVATE OFFERING OF COMMON STOCK
The Company offers for sale to residents of the States of New York,
Florida, Oklahoma, and the District of Columbia, to accredited investors
in the State of Colorado, and outside the United States to Non-US
Residents, up to 100,000 Units (?the Units?), at $2.00 per Unit. Each
Unit consists of one share of Common Stock ($.001 Par Value), and four
Stock Purchase Warrants. Each Warrant entitles the holder thereof to
purchase one share of Common Stock of the Company at a purchase price
of $2.00. The original expiration date of the warrants was July 21,
1998, the Board of Directors extended the expiration date ninety days
from the original expiration date and provided for an additional extension of
ninety days if needed. The Company has the right to call in the Warrants
on fifteen days notice, if not exercised by the holder prior to the
expiration of the fifteenth day?s notice, if not exercised by the Holder
prior to the expiration of the fifteen day's notice period, should the
Company's Common Stock trade at or above a $2.75 reported closing bid or
trade price for not less than ten consecutive trading days. The Offering
is made in reliance upon an exemption from registration under the federal
and state securities laws pursuant to the Regulation D, Rule 504, of the
Securities and Exchange Commission, and is made outside of the United States
in reliance upon an exemption from registration under Regulation S of the
Securities and Exchange Commission.
Item 14. Exhibits, Financial Statements
(a) Report of Independent Certified Public Accountant
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. Description
---------- -----------
3(a) Articles of Incorporation
3(b) By-laws
4(a) Specimen certificate of common stock
10 Other Documents
(a) Mortgage Internet Technologies, Inc.
Wholesale Lender Center License
Agreement
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
AmeriStar Network, Inc.
/s/ O. Russell Crandall, Jr.
By_________________________________________
O. RUSSELL CRANDALL, JR., President and Director
Date:July 12, 1999
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ O. Russell Crandall, Jr.
__________________________________________
O. RUSSELL CRANDALL, JR., Vice President/Marketing, Director
Date:July 12. 1999
/S/ David R. Werner
___________________________________________
DAVID R. WERNER, Director
Date: July 12, 1999
Exhibit 3.1
ARTICLES OF INCORPORATION
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 11:30 AM 09/23/1996
960275091 - 2668582
CERTIFICATE OF INCORPORATION
OF
AMERISTAR NETWORK, INC.
ARTICLE I
NAME
The name of the Corporation hereby created shall be
AmeriStar Network,
Inc.
ARTICLE II
DURATION
The Corporation shall continue in existence perpetually
unless sooner
dissolved according to law.
ARTICLE III
PURPOSES
The purpose for which this Corporation is organized is to
engage in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware including,
without limitation, to engage directly or through a subsidiary or
subsidiaries in the business of acquiring, operate and or managing mortgage
brokerage
business and to develop, research, design, produce, buy, sell, license or
otherwise deal in mortgage technology or related devises which are necessary,
useful and desirable in connection with said business;
To seek available business opportunities which have potential
for profit, acquire, merge with or into, or be acquired by one or more other
businesses;
To acquire, sell and otherwise, dispose of, deal in stocks,
bonds, mortgages, securities, notes and commercial paper for corporations and
individuals;
To engage in any and all other lawful purposes, activities and pursuits,
whether similar or dissimilar to the foregoing, and the Corporation shall have
all powers allowed or permitted by the laws of the State of Delaware.
ARTICLE IV
CAPITALIZATION
The Corporation is authorized to issue two classes of shares, designated
respectively
ARTICLE V
CLASSES OF STOCK
A statement of the designations and the powers, preferences,
and rights, and the rights, and the qualifications, limitations, or
restrictions thereof, of the shares of stock which the Corporation shall be
authorized
to issue, is as follows:
(a) General Rights. All Stock of the Corporation shall have
the rights and preferences as the Board of Directors, in its discretion may
determine. Fully paid stock of the Corporation shall not be liable to any
call and is non-assessable.
(b) Dividends. The holders of shares of Common and Preferred
Stock shall be entitled to receive dividends when and as declared by the
Board of Directors out of funds legally available therefor.
(c)Voting. Except as otherwise expressly provided by law, in
all matters as to which the vote or consent of stockholders of the
Corporation shall be required or be taken, including, any vote to amend
these Articles of Incorporation to increase or decrease the par value,
effect a stock split or combination of shares, or alter or change the powers,
preferences or special rights of the Common or Preferred Stock, the holders of
the Common Stock and the Preferred Stock shall be
entitled to vote on all such matter, and the holder of the shares of Common
Stock and Preferred Stock shall each have one (1) vote per share.
(d) Issuance of Rights and Warrants. The Corporation shall
have the power to issue, with or without any connection to the issue, and
sale of its Common Stock, Preferred Stock, or other securities, rights,
warrants, or options entitling the holders thereof to purchase from the
Corporation shares of its Common Stock, Preferred Stock, or other securities,
upon which terms and conditions and at such times and for such consideration
or
price as the Board of Directors, in its discretion may determine. In the
absence of fraud, the judgement of the directors as to the consideration for
the
issuance of such rights, warrants, or options and the sufficiency thereof
shall be conclusive.
ARTICLE VI
BY-LAWS
In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-Laws of the Corporation.
ARTICLE VII
MEETINGS AND RECORDS
Meetings of the stockholders may be held within or without
the State of Delaware, as the By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the By-Laws of the
Corporation.
Elections of directors need not be by written ballot unless the By-Laws of the
Corporation shall so provide.
ARTICLE VIII
NO PRE-EMPTIVE RIGHTS
Shareholders of the Corporation shall not have pre-emptive
rights to subscribe for or acquire additional shares of the Corporation,
whether such shares be hereby or hereafter authorized.
ARTICLE IX
INDEMNIFICATION OF OFFICERS
AND DIRECTORS
The Corporation shall indemnify any and all persons who may
serve or who have served at any time as directors or officers, or who,
at the request of the Board of Directors of the Corporation, may serve,
or at any time have served as directors or officers of another corporation
in which the Corporation at such time owned or may own shares of stock, or
which it was or may be creditor, ant eh respective heirs, administrators,
successors, and assigns, against any and all expenses, including amounts
paid upon judgment, counsel fees, and amounts paid in settlement (before
or after suit is commenced), actually or necessarily by such persons in
connection with the defense or settlement or any claim, action, suit, or
proceeding in which they, or any of them, are made parties, or a party to,
or which may be assessed against them or any of them, by reason of being or
having been directors or officers of the Corporation, or such other
corporation,
except in relation to matters as to which any such director or officer of the
Corporation, or such other corporation, or former director of officer shall be
adjudged in any action, suit or proceeding to be liable for his own negligence
of
misconduct in the performance of his duties. Such indemnification shall be
in addition to any other rights to which those indemnities may be entitled
under
any law, by-law, agreement, vote of stockholders or otherwise.
ARTICLE X
OFFICERS AND DIRECTORS CONTRACTS
No contract or other transaction between this Corporation
and any other firm or corporation shall be affected by the fact that a
director
or officer of this Corporation has an interest in, or is a director or
officer of this Corporation or any other corporation. Any officer or director
individually or with others, may be a party to, or may have and interest in,
any
transaction of this Corporation, or any transaction in which this Corporation
is a party or has an interest. Each person who is or may become an officer
or director of this Corporation is hereby relieved from liability he might
otherwise obtain in the event such officer or director contracts with this
Corporation for the benefit of himself or any firm or other corporation in
which he may have an interest, provided such officer or director acts in good
faith.
ARTICLE XI
REGISTERED OFFICE AND AGENT
The address of its registered office in the State of
Delaware is 1220 North Market Street, Suite 606 City of Wilmington, County of
New
Castle. The name of its registered agent at such address is Registered
Agents, Ltd.
ARTICLE XII
AMENDMENT
The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
ARTICLE XIII
DIRECTORS
The Corporation shall have not less than One (1) nor more
than nine (9) directors as determined, from time to time, by the Board of
Directors. The original Board of Directors shall be comprised of three (3)
persons. The names and addresses of the persons who are to serve as directors
until
the first annual meeting of shareholders and until their successors are
elected and shall qualify are as follows:
Name Address
O. Russell Crandall, Jr. 2100 Bengal Blvd. #105
Salt Lake City, Utah 84121
Shirman Milliner 1604 W. Village Rd. X-3
St. George, Utah 84770
Bryan Richmond 4141 Highland Drive 307
Salt Lake City, Utah 84124
ARTICLE XIII
INCORPORATOR
The name and address of the incorporator for this
Corporation is as follows:
Name Address
O. Russell Crandall, Jr. 2100 Bengal Blvd. #105
Salt Lake City, Utah 84121
I, THE UNDERSIGNED, being the incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declaring
and certifying that this is my act and deed and the facts herein
stated are true, and accordingly have hereunto set my hand this day of
, 1996.
DATED this day of , 1996.
O. Russell Crandall, Jr.
Exhibit 3.3
BY-LAWS OF AMERISTAR NETWORK, INC.
ARTICLE I - OFFICES
Section 1. The registered office of the corporation in the
State of Delaware shall be at Registered Agents, Ltd. 1220 North Market
Street Suite 606, Wilmington, Delaware, 19801.
Section 2. The Corporation may also have offices at such
other places as the Board of Directors may from time to time appoint or the
business of the corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the words
"Corporate Seal, Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of the stockholders shall be held at the
registered office of the corporation in this state or at such place, either
within or without the state, as may be selected from time to tome by the
Board of Directors.
Section 2. ANNUAL MEETINGS: The annual meeting of the
stockholders shall be held on the 1st day of May in each year if not a legal
holiday, and if a legal holiday, then on the next secular day following at
2:00
o'clock P. M., when they shall elect a Board of Directors and transact such
other business as may properly be brought before the meeting. If the annual
meeting for election of directors is not held on the date designated
therefore, the directors shall cause the meeting to be held as soon thereafter
as convenient.
Section 3. ELECTIONS OF DIRECTORS: Elections of the
directors of the corporation be by written ballot.
Section 4. SPECIAL MEETINGS: Special meetings of the
stock-holders may be called at any time by the President, or the Board of
Directors, or stockholders entitled to cast at least one-fifth of the votes
which all stockholders are entitled to cast at the particular meeting. At
any time, upon written request of any person or persons who have duly
called a special meeting,, it shall be the duty of the Secretary to fix the
date
of the meeting, to be held not more than sixty days after receipt of the
request, and to give due notice thereof. If the Secretary shall neglect or
refuse to fix the date of the meeting and give notice thereof, the person or
persons calling the meeting may do so.
Business transacted at all special meetings shall be
confined to the objects stated in the call and matters germane thereto, unless
all stockholders entitled to vote are present and consent.
Written notice of a special meeting of stockholders stating
the time and place and object thereof, shall be given to each stockholder
entitled to vote thereat at least Ten days before such meeting, unless a
greater
period of notice is required by statute in a particular case.
Section 5. QUORUM: A majority 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 a
majority of the outstanding shares entitled to vote is 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 noticed. 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.
Section 6. PROXIES: Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to corporate action
in writing without a meeting may authorize another person or persons to act
for him by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that
it is irrevocable and if , and only as long as, it is coupled with and
interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is
coupled is an interest in the stock itself or an interest in the corporation
generally. All proxies shall be filed with the Secretary of the meeting
before
being voted upon.
Section 7. NOTICE OF MEETINGS: Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of
the meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.
Unless otherwise provided by law, written notice of any
meeting shall be given not less than ten nor more than sixty days before the
date
of the meeting to each stockholder entitled to vote at such meeting.
Section 8. CONSENT IN LIEU OF MEETINGS: Any action required
to be taken at any annual or special meeting or stockholders of a
corporation, or any action which may be taken at any annual or special meeting
of
such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action
so
taken, shall be signed by the holders of outstanding stock having not less
than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all share entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
Section 9. LIST OF STOCKHOLDERS: The officer who has charge
of the stock ledger of the corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. No share of stock upon which any
installment is due and unpaid shall be voted at any meeting. The list shall
be open
to examination of any stockholder, for any purpose germane to the
meeting, during rdinary business hours, for a period of at least ten days
prior
to the meeting, either at a place within the city where the meeting is
to be held, which place shall be specified in the notice of the meeting, or,
if not so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the meeting
during
the whole time thereof, and may be inspected by any stockholder who is
present.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation
shall be managed by its Board of Directors, Three in number. The
directors need not be residents of this state or stockholders in the
corporation.
They shall be elected by the stockholders at the annual meeting of
stockholders
of the corporation, and each director shall be elected for the term of
one year, and until his successor shall be elected and shall qualify or until
his earlier resignation or removal.
Section 2. REGULAR MEETINGS: Regular meetings of the Board shall be
held without notice at the registered office of the corporation, or at such
other time and place as shall be determined by the Board. Section 3. SPECIAL
MEETINGS: Special Meetings of the Board may be called by the President on
Ten days notice to each director, either personally or by mail or by
telegram;
special meetings shall be called by the President or Secretary in like manner
and
on like notice on the written request of a majority of the directors in
office.
Section 4. QUORUM: A majority of the total number of
directors shall constitute a quorum for the transaction of business.
Section 5. CONSENT IN LIEU OF MEETING: Any action required
or permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the
Board or committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
or committee. The Board of Directors may hold its meetings, and have an
office
or offices, outside of this state.
Section 6. CONFERENCE TELEPHONE: One or more directors
may participate in a meeting of the Board, of a committee of the
Board or of the stockholders, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other; participation in this manner shall constitute
presence in person at such meeting.
Section 7. COMPENSATION: Directors as such, shall not
receive any stated salary for their services, but by resolution of the Board,
a fixed sum and expenses of attendance, if any, may be allowed for attendance
at each regular or special meeting of the Board PROVIDED, that nothing
herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
Section 8. REMOVAL: Any director or the entire Board of
Directors may be removed, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of directors,
except
that when cumulative voting is permitted, if less than the entire Board is
to be removed, no director may be removed without cause if the votes
cast against his removal would be sufficient to elect him if then cumulatively
voted at an election of the entire Board of Directors, or, if there be
classes of directors, at an election of the class of directors of which he
is a part.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall
be chosen by the directors and shall be a President, Secretary and
Treasurer. The Board of Directors may also choose a Chairman, one or more
Vice
Presidents and such other officers as it shall deem necessary. Any number of
offices
may be held by the same person,
Section 2. SALARIES: Salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 3. TERM OF OFFICE: The officers of the
corporation shall hold office for one year and until their successors are
chosen
and have qualified. Any officer or agent elected or appointed by the
Board may be removed by the Board of Directors whenever in its judgment the
best interest of the corporation will be served thereby.
Section 4. PRESIDENT: The President shall be the chief
executive officer of the corporation; he shall preside at all meetings of
the stockholders and directors; he shall have general and active
management of the business of the corporation, shall see that all orders and
resolutions of the Board are carried into effect, subject, however, to the
right of
the directors to delegate any specific powers, except such as may be by
statute
exclusively conferred on the President, to any other officer or officers of
the corporation. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation. He shall be
EX-OFFICIO a member of all committees, and shall have the general power and
duties of
supervision and management usually vested in the office of President of a
corporation.
Section 5. SECRETARY: The Secretary shall attend all
sessions of the Board and all meetings of the stockholders and act as clerk
thereof, and record all the votes of the corporation and the minutes of all
its transactions in a book to be kept for that purpose, and shall
perform like duties for all committees of the Board of Directors when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and of the Board of Directors, and shall perform such other
duties as
may be prescribed by the Board of Directors or President , and under
whose supervision he shall be. He shall keep in safe custody the
corporate seal of the corporation, and when authorized by the Board, affix the
same
to any instrument requiring it.
Section 6. TREASURER: The Treasurer shall have custody
of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation,
and shall keep the moneys of the corporation in a separate account to the
credit of the corporation. He shall disburse the funds of the corporation as
may be ordered by the Board, taking proper vouchers for such disbursements,
and
shall render to the President and directors, at the regular meetings of the
Board, or whenever they may require it, an account of all his transactions
as Treasurer and of the financial condition of the corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, shall be filled by
the
Board of Directors. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, although less than a quorum, or by
a sole remaining director. If at any time, by reason of death or
resignation or other cause, the corporation should have no directors in
office,
then any officer or any stockholder or an executor, administrator, trustee
or guardian of a stockholder, or other fiduciary entrusted with like
responsibility for the person or estate of a stockholder, may call a special
meeting
of stockholders in accordance with the provisions of these By-Laws.
Section 2. RESIGNATION EFFECTIVE AT FUTURE DATE: When one
or more directors shall resign from the Board, effective at a future
date, a majority of the directors then in office, including those who have so
resigned, shall have power to fill such vacancy or vacancies, the vote thereon
to
take effect when such resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
Section 1. Any stockholder of record, in person or by attorney
or other agent, shall, upon written demand under oath stating the purpose
thereof, have the right during the usual hours for business to inspect for any
proper purpose the corporation's stock ledger, a list of it's
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean a purpose reasonably related to such
person's
interest as a stockholder. In every instance where an attorney or other
agent
shall be the person who seeks the right to inspection, the demand under oath
shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the corporation at its registered
office in this state or at its principal place of business.
ARTICLE VII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall
be numbered and registered in the share ledger and transfer books of the
corporation as they are issued. They shall bear the corporate seal and shall
be
signed by the President and the Secretary.
Section 2. TRANSFERS: Transfers of shares shall be made on he books
of the corporation upon surrender of the certificates therefor, ndorsed by
the person named in the certificate or by attorney, lawfully constituted in
writing. No transfer shall be made which is inconsistent in law. Section 3.
LOST CERTIFICATE: The corporation may issue a
new certificate of stock in the place of any certificate theretofore
signed by it, alleged to have been lost, stolen or destroyed, and the
corporation may require the owner of the lost, stolen or destroyed, and the
corporation may require the owner of the lost, stolen or destroyed
certificate,
or his legal representative to give the corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.
Section 4. RECORD DATE: In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than
sixty nor
less than ten days before the date of such meeting, nor more than sixty
days prior to any other action.
If no record date is fixed:
(a) The record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholder shall be at the
close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the
day on which the first written consent is expressed.
(c) The record date for determining stockholders for
any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting: provided, however, that the Board of Directors
may
fix a new record date for the adjourned meeting.
Section 5. DIVIDENDS: The Board of Directors may declare
and pay dividends upon the outstanding shares of the corporation, from
time to time and to such extent as they deem advisable, in the manner and upon
the terms and conditions provided by statute and the Certificate of
Incorporation.
Section 6. RESERVES: Before payment of any dividend there
may be set aside out of the net profits of the corporation such sum or sums
as the directors, from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing dividends,
or for repairing or maintaining any property of the corporation, or for
such other purpose as the directors shall think conductive to the interests
of the corporation, and the directors may abolish any such reserve in
the manner in which it was created.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. CHECKS: All checks or demands for money and
notes of the corporation shall be signed by such officer or officers as the
Board of Directors may from time to time designate.
Section 2. FISCAL YEAR: The fiscal year shall begin on the
first day of January.
Section 3. NOTICE: Whenever written notice is required
to be given to any person, it may be given to such person, either personally
or by sending a copy thereof through the mail, or by telegram, charges
prepaid,
to his address appearing on the books of the corporation, or supplied by
him to the corporation for the purpose of notice. If the notice is sent by
mail or by telegraph, it shall be deemed to have been given to the person
entitled thereto when deposited in the United States mail or with a
telegraph office for transmission to such person. Such notice shall specify
the
place, day and hour of the meeting and, in the case of a special meeting of
stockholders, the general nature of the business to be transacted.
Section 4. WAIVER OF NOTICE: Whenever any written notice
is required by statute, or by the Certificate or the By-Laws of this
corporation 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. Except in the case of a special
meeting of stockholders, neither the business to be transacted at nor the
purpose of the meeting need be specified in the waiver of notice of such
meeting. Attendance of a person either in person or by proxy, at any meeting
shall
constitute a waiver of notice of such meeting, except where a person attends a
meeting for the express purpose of objecting to the transaction of any
business because the meeting was not lawfully called or convened.
Section 5. DISALLOWED COMPENSATION: Any payment made to
an officer or employee of the corporation such as a salary, commission,
bonus, interest, rent, travel or entertainment expense incurred by him, which
shall be disallowed in whole or in part as a deductible expense by the
Internal Revenue Service, shall be reimbursed by such officer or employee to
the
corporation to the full extent of such disallowance. It shall be the duty of
the directors, as a Board, to enforce payment of each such amount disallowed.
In lieu of payment by the officer or employee, subject to the determination
of the directors, proportionate amounts may be withheld from his future
compensation payments until the amount owed to the corporation has been
recovered.
Section 6. RESIGNATIONS: Any director or other officer may
resign at any time, such resignation to be in writing and to take effect
from the time of its receipt by the corporation, unless some time be fixed in
the resignation shall not be required to make it effective.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and the Board of Directors shall
present at each annual meeting a full and complete statement of the business
and affairs of the corporation for the preceding year. Such statement shall
be prepared and presented in whatever manner the Board of Directors shall
deem advisable and need not be verified by a Certified Public Accountant.
ARTICLE XI - - INDEMNIFICATION AND INSURANCE:
Section 1. (a) RIGHT TO INDEMNIFICATION. Each person who
was or is made a party or is threatened to be made a party or is involved
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was
a director or officer, of the Corporation of is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including
service with respect to employee or agent or in any other
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and
held harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said
law permitted the Corporation to provide prior to such amendment), against all
expense, liability and loss (including attorney's fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonable incurred or suffered by such person in connection therewith and
such indemnification shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of
his
or her heirs, executors and administrators; provided, however, that, except as
provided in paragraph (b) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part
thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Section shall be a contract right and shall
include the
right to be paid by the Corporation the expense incurred in defending any
such proceeding in advance of its final disposition: provided, however, that,
if
the Delaware General Corporation Law requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such
person while a director or officer, including, without limitation, service to
an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the corporation of an
undertaking, by
or on behalf of such director or officer, to repay all amounts so advanced if
it shall ultimately be determined that such director or officer is not
entitled to be indemnified under this Section or otherwise. The Corporation
may, by action of it Board of Directors, provide indemnification to employee
and
agents of the Corporation with the same scope and effect as the foregoing
indemnifica tion of directors and officers.
(b) RIGHT OF CLAIMANT TO BRING SUIT:
If a claim under paragraph (a) of this Section is not paid
in full by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may be at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and ,
if successful in whole or in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the required undertaking, if any is required, has been tendered to
the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation law
for the
Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of
the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the
circumstances because he or she has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors,
independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard or conduct, shall be a defense to the action or create a
presumption
that the claimant has not met the applicable standard or conduct.
(c) Notwithstanding any limitation to the contrary contained in sub-
paragraphs (a) and (b) of this section, the corporation shall, to
the fullest extent permitted by Section 145 of the General Corporation Law of
the State of Delaware, as the same may be amended and supplemented, indemnify
any and all persons whom it shall have power to indemnify under said section
from and against any and all of the expenses, liabilities or other matter
referred to in or covered by said section, and the indemnification provided
for herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any By-Law, agreement, vote of stockholders
or disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors
and administrators of such a person.
(d) INSURANCE:
The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporat ion or another corporation, partnership, joint venture, trust or
other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
ARTICLE XII - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the
vote of stockholders entitled to cast at least a majority of the votes
which all stockholders are entitled to cast thereon, at any regular or
special meeting of the stockholders, duly convened after notice to the
stockholders of that purpose.
Exhibit 4.1
<SEQUENCE>4
[DESCRIPTION]SPECIMEN OF COMMON STOCK CERTIFICATE
EXHIBIT
AMERISTAR NETWORK, INC.
[________]NUMBER
SHARES[________]
AUTHORIZED COMMON STOCK; 90,000,000 SHARES
PAR VALUE $.001
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER
AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE
COMMON STOCK CUSIP
03071S106
THIS CERTIFIES THAT
Is the RECORD HOLDER OF SHARES OF AMERISTAR NETWORK,
INC.
COMMON STOCK TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN
PERSON
OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE
PROPERLY
ENDORSED.
THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER
AGENT AND
REGISTERED BY THE REGISTRAR.
Witness the facsimile seal of the Corporation and the facsimile
signatures of
its duly authorized officers.
Dated:
[SEAL OF AMERISTAR NETWORK, INC.]
/s / BRYAN RICHARD /s/ O. RUSSELL CRANDALL,
JR.
- - -----------------------
- ---------------------
Secretary
PRESIDENT
By: ^^Illegible Signature^^
OTC Stock Transfer Inc.
Salt Lake City, UT 84107
This Certificate is not valid unless countersigned by the
Transfer Agent.
NOTICE: Signature must be guaranteed by a firm which is a member
of a
registered national stock exchange, or by a bank (other than a
savings bank) ,
or a trust company.
The following abbreviation, when used in the inscription on the
face of this
certificate, shall be construed as though they were written out
in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
____Custodian____
TEN ENT - as tenants by the entireties
(Cust)
(Minor)
JT TEN - as joint tenants with right under Uniform
Gifts to
Minors
of survivorship and not as Act
________________________
tenants in common
(State)
Additional abbreviation may also be used though not
in above
list.
FOR VALUE RECEIVED, _________hereby sell, assign and
transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- - --------------------------------------
- - --------------------------------------
_________________________________________________________________
_________
(Please print or typewrite name and address including zip code of
assignee)
_________________________________________________________________
_________
_________________________________________________________________
_________
_________________________________________________________________
_________
Shares of the capital stock represented by the within
Certificate, and do
hereby irrevocably constitute and appoint
_________________________________________________________________
_________
Attorney to transfer the said stock on the books of the
within-named
Corporation with full power of substitution in the premises.
Dated, ---------------------------------
NOTICE: The signature to this assignment must correspond with the
name as
written upon the face of the Certificate, in every particular,
without
alteration or enlargement, or any change whatever.
Exhibit 4.2
SPECIMEN FORM OF WARRANT CERTIFICATE
Warrant Number
Number of Warrants
COMMON STOCK PURCHASE WARRANT
AMERISTAR NETWORK, INC.
(A Delaware Corporation)
Cusip No.
030 71 S 114
This certifies that FOR VALUE RECEIVED,
Or registered assigns (the "Holder") is the owner of
Common Stock Purchase Warrants ("Warrants"). Each Warrant
entitles the Holder o purchase at any time prior to the expiration date (as
hereinafter defined), subject to the terms and conditions set forth in this
certificate
and the Information Statement (dated March 14th, 1997), one fully paid
and nonassessable share of common stock, $.001 par value, of AmeriStar
Network,
Inc., a Delaware Corporation (the "Company") at $2.00 through July 21st, 1998.
Warrants notexercised by the Expiration Date will expire. Certificates are
issuable on thepresentation and surrender of the Warrant Certificate with the
Subscription form n the reverse side hereof duly executed at the principal
office
of the Company or its duly appointed agent, OTC Stock Transfer, Inc., as
warrant
agent, or its successor (the "Warrant Agent") accompanied by payment in lawful
money of the United States of America in cash of by official bank or certified
check payable to the Company.
This Warrant Certificate and each Warrant
represented hereby re issued to and are subject in all respects to the terms
and
conditions set forth in the Information Statement (the "Warrant Agreement")
dated March 14th, 1997, between the Company and the Warrant Agent. A copy of
the
Warrant Agreement is on file at the principal office of the Warrant Agent, and
a
copy will be provided by the company to each holder on request at no charge.
The company has the right to call in the Warrants
on 15 days notice, if not exercised by the holder prior to the expiration of
the 15 day notice period, should the Company's Common Stock trade at or
above a $2.75 reported closing bid on trade price for at least 10 consecutive
trading days.
The term "Expiration Date" shall mean 4:00 p.m.
(Mountain Standard Time) on July 21st, 1998).
This Warrant shall not be exercisable and the
Company shall not be obligated to deliver any securities pursuant to this
Warrant
unless a registration statement under the Securities Act of 1933, as
amended, and under aplicable state securities laws with respect to such
securities
is effective or there is an availab le exemption from such federal and state
registration requirements. This Warrant shall not be exercisable by a Holder
in any state where such exercise would be unlawful.
This Warrant shall not be valid unless
countersigned by the Warrant Agent. For more information, please refer to the
Information Statement dated March 14th, 1997.
This warrant shall not be valid unless countersigned by the
Warrant Agent. For more information, please refer to the Information
Statement
dated March 14th, 1997.
Dated:
Secretary President
Corporate Seal
Exhibit 10
<SEQUENCE>?
[DESCRIPTION] INTELLECTUAL PROPERTIES PARTIAL ASSIGNMENT
Mortgage Internet Technologies, Inc.
Intellectual Properties Partial Assignment
Mortgage Internet Technologies, Inc., (MIT) a corporation of the
State of Nevada (the "Company") hereby grants to
AmeriStar Network, Inc.,(AmeriStar) a Delaware corporation, a
percentage ownership in the following "intellectual
properties" (ILP) of MIT: (1) a 10% equity interest in the
Virtual Lendertrademark system. (2) a 20% equity interest in
MortgageLocator.com. (3) a 20% interest in LoanPool.com. See
below for a detailed explanation of the above concerns.
This agreement is subject to the terms and conditions below.
Parties to this Agreement are MIT and AmeriStar. The Intellectual
properties and Documentation are collectively
referred to hereinafter as the "ILP". This writing constitutes the sole and
entire Agreement and arrangement between the Parties and is referred to as the
"License agreement".
1. PAYMENT TERMS. The purchase price for the ILP is a single
payment of One Hundred thousand dollars
($100,000.00) and 20% interest in the AmeriStar Network "WLC"
system. This 20% equity interest in the "WLC"
is outlined in Addendum "A" to this agreement and due upon
signing of this agreement.
2. DESCRIPTION OF THE INTELLECTUAL PROPERTIES.
A. VIRTUAL LENDERTRADEMARK (http://www.Vlender.com)
REVENUE RIGHTS: 10% of all setup fees & monthly fees earned on
the sale and servicing of the Virtual Lendertrademark
Kit. Also a 10% equity interest in any profits related to
future sale of and or licensing of the Virtual Lendertrademark
system.
B. MORTGAGELOCATOR.COM (http://www.mortgagelocator.com)
REVENUE RIGHTS: 20% of all retail loan transaction fees and
banner advertising fees associated with
mortgagelocator.com. Also a 20% equity interest in any profits related to
future sale of and or licensing of the mortgage locator system.
C. LOAN POOL referral network (http://www.loanpool.com)
REVENUE RIGHTS: 20% of all fees related to the loan pool. Also
a 20% equity interest in any profits related to future
sale of and or licensing of the loan pool system.
3. DESCRIPTION OF PURCHASERS RIGHTS & LIMITATIONS: MIT will
continue to control, develop, design and regulate all
aspects of the ILP and AmeriStar will be subject to limitations
imposed upon by MIT. AmeriStar will have the
right to participate in additional product research &
development and to participate in marketing efforts of the ILP.
AmeriStar cannot transfer rights to the ILP without written
consent by both MIT and AmeriStar.
4. CONTINUATION OF BUSINESS. AmeriStar agrees that if AmeriStar
commits an act of bankruptcy, ceases doing business,
or assigns all assets of AmeriStar's business, AmeriStar shall
provide MIT with the first right of refusal to purchase
the ILP limited rights.
5. LIMITATION OF LIABILITY. In no event shall MIT be liable for
any indirect, special, consequential or incidental
damages or lost profits, reimbursements or revenues arising out
of or related to any failure of the ILP, or delay or other
default in the performance of services under this Agreement, or
the performance of breach hereof, even if MIT has been
advised of the possibility thereof.
6. INDEMNITY. MIT and AmeriStar acknowledge and agree that
portions of the ILP are currently not developed;
AmeriStar is solely responsible and liable for delivering and maintaining
proper records and MIT has no responsibility or liability in respect thereof.
AmeriStar releases and
discharges and shall indemnify and hold harmless MIT and its
representatives from and against any and all claims actions,
liabilities, damages, losses, costs and expenses including
attorney's fees, costs and expenses made by persons other than
AmeriStar for any matter arising out of or relating to
the use of the ILP.
of both MIT & AmeriStar Network. Any attempted transfer or assignment of this
Agreement, and/or any
rights of Customer hereunder without such express prior written approval by
both parties shall be wholly void and
without force or effect.
9. MISCELLANEOUS. This Agreement between the parties (including
attachments hereto) is the sole agreement between
the parties relating to the subject matter hereof and supersedes
all prior agreements and representations, oral or written.
This Agreement may be amended only in writing signed by both
parties. The substantive laws of the State of Nevada govern this Agreement.
10. EXECUTION. This agreement constitute the Partial Assignment
Agreement. The below-signed parties hereby state that they have read the
foregoing Agreement and accept it and
agree to be bound by it on the date indicated.
11. AGREEMENT SUMMARY. The following scenario constitutes the end
result of this agreement as it relates to intellectual property ownership
percentages.
<TABLE>
<S> <C> <C>
PRODUCT TYPE MIT % AMERISTAR %
WLC (Wholesale LendingNetwork) 20% 80%
Virtual Lendertrademark 90% 10%
Mortgagelocator.com 80% 20%
LoanPool.com 80% 20%
</TABLE>
Dated this 15th day of March, 1999.
Mortgage Internet Technologies, Inc. AmeriStar
Network, Inc.
Date: _________________________ Date:
____________________________
______________________________
_________________________________
David R. Werner / President O. Russell
Crandall Jr., / President
EXHIBIT A (WLC)
PAYMENT TERMS FOR THE Intellectual Properties Partial Assignment
DATED MARCH 22, 1999 BY AND BETWEEN MORTGAGE INTERNET TECHNOLOGIES, INC. (MIT)
AND AMERISTAR
NETWORK, INC. (AMERISTAR)
AmeriStar hereby assigns 20% interest in the Wholesale Lending
Center (WLC) to MIT as outlined below:
D. WLC
REVENUE RIGHTS: 20% of all loan transaction fees and other fees
associated with the WLC. Also, a
20% equity interest in any profits related to future sale of and
or licensing of the WLC system.
This addendum will become effective immediately upon execution of
this Agreement.
Dated this 15th day of March 1999.
Mortgage Internet Technologies, Inc. AmeriStar
Network, Inc.
Date: _________________________ Date:
_______________________
____________________________
____________________________
David R. Werner / President O. Russell
Crandall Jr., / President
<SEQUENCE>?
[DESCRIPTION] LICENSE AGREEMENT
Mortgage Internet Technologies, Inc.
Wholesale Lending Center (WLC)
License Agreement
Mortgage Internet Technologies, Inc., (MIT) a corporation of the
State of Nevada (the "Company") hereby grants to
AmeriStar Network, Inc.,(AmeriStar) a Delaware corporation, this
exclusive license to the following intellectual
properties of MIT: (1) a 100% interest in the Wholesale Lender
Center computer application (the "WLC") plug-in
located within (i) the Virtual Lendertrademark Business
Development Center. This licensing agreement is subject to the terms
and conditions below.
AmeriStar will maintain participate in continued development of
the "WLC" system in accordance with the provisions
of Paragraph 9 ("Maintenance Agreement") hereof, under the Terms
and Conditions set out below. AmeriStar agrees
to pay a fee to MIT for their respective interest in the WLC
under the Terms and Conditions below.
Parties to this Agreement are MIT and AmeriStar. The Intellectual
properties and Documentation are collectively
referred to hereinafter as the "WLC". This writing constitutes
the sole and entire Agreement and arrangement between
the Parties and is referred to as the "License agreement".
1. PAYMENT TERMS. The license fee for the WLC is a single payment
of One Hundred and fifty thousand dollars
($150,000.00). Terms of the payment of the license fee are
outlined and attached as exhibit "B" to this agreement.
2. SITE PREPARATION. The hardware, network, operating WLC
requirements and related costs are the sole obligation
of AmeriStar. MIT shall provide AmeriStar with specifications
for all computer equipment required by MIT for using
and developing the WLC. MIT will retain an exclusive contract
with AmeriStar Network, Inc., to develop and service
the technology in accordance with the provisions of Paragraph 9
("Maintenance Agreement").
3. WLC LICENSE. MIT has developed and will continue to develop
and possess all rights to the Virtual Lendertrademark
System. MIT grants to AmeriStar an exclusive license to the WLC
(See Addendum A for a complete description). The
term is perpetual. AmeriStar acknowledges that the BDC and
related materials are the property of MIT and are
copyrighted works, that they include trade secrets of MIT, and
that copyright or proprietary notices shall be retained
in their exact form in the BDC. AmeriStar agrees to take
reasonable steps to ensure that all persons (Users) having
access through it to the WLC will observe AmeriStar's obligations
relating to the BDC.
4. DESCRIPTION OF THE WLC. The WLC is an area that is built into
the Virtual Lender trademark Business Development Center.
By entering the business development center, the loan originator
may choose the "Wholesale Network" button to access
a list of participating wholesale lending institutions.
Upon selecting a button, the loan originator will see the WLC
options on the screen. The Loan originator currently has
the following options:
5. CONTINUATION OF BUSINESS. AmeriStar agrees that if AmeriStar
commits an act of bankruptcy, ceases doing business,
or assigns all assets of AmeriStar's business, AmeriStar shall
provide MIT with the first right of refusal to purchase
the WLC license and Documentation. In the event AmeriStar sells
or licenses the WLC, MIT will receive a one time
license and Royalty fee of 5% of the total purchase price paid
for the license fee.
6. LIMITATION OF LIABILITY. In no event shall MIT be liable for
any indirect, special, consequential or incidental
damages or lost profits, reimbursements or revenues arising out
of or related to any failure of the WLC, or delay or
other default in the performance of services under this
Agreement, or the performance of breach hereof, even if MIT
has been advised of the possibility thereof. AmeriStar shall be
solely responsible for the selection, use, efficiency and
suitability of the WLC and its usage, and MIT shall have no
liability in respect thereof.
7. INDEMNITY. MIT and AmeriStar acknowledge and agree that the
WLC is currently not developed; AmeriStar is
solely responsible and liable for delivering and maintaining
proper records and MIT has no responsibility or liability
in respect thereof. AmeriStar releases and discharges and shall
indemnify and hold harmless MIT and its
representatives from and against any and all claims actions,
liabilities, damages, losses, costs and expenses including
attorney's fees, costs and expenses made by persons other than
AmeriStar for any matter arising out of or relating to
AmeriStar's provision of wholesale Lending services and use of
the WLC.
MIT shall indemnify and hold harmless AmeriStar and its
representatives from and against any and all claims actions,
liabilities, damages, losses, costs and expenses including
attorney's fees, costs and expenses made by persons for any
matter relating to the use, possession, or licensing of the WLC
arising out of or relating to MIT's infringement or
unauthorized distribution, licensing or development of the WLC.
8. CUSTOMER'S REMEDIES. Except as provided in Paragraph 6,
AmeriStar's remedy in respect to this Agreement,
regardless of the form of action, whether in contract or tort, is
limited to replacement or repair of the WLC, at the
discretion of MIT. Except as provided in Paragraph 6, in no event
shall MIT's liability hereunder exceed the price of
the WLC to AmeriStar and or any license fees paid.
9. MAINTENANCE AGREEMENT. The Maintenance Agreement between MIT
and AmeriStar embodies the following terms
and conditions:
MIT will have available Technical Resource
Staff responsible for hardware installation and maintenance,
operating WLC and network installation, workstation
configuration, and modem support according to the terms of the
Maintenance agreement.
12. MISCELLANEOUS. This Agreement between the parties (including
attachments hereto) is the sole agreement between
the parties relating to the subject matter hereof and supersedes all prior
agreements and representations, oral or written. This Agreement may be amended
only in writing signed by both
parties. The substantive laws of the State of Nevada
govern this Agreement.
13. EXECUTION. This agreement along with addendum "A" and exhibit
"B" constitute the Licensing Agreement. The below-signed parties hereby state
that they have read the
foregoing Agreement and accept it and agree to be bound by
it on the date indicated.
Mortgage Internet Technologies, Inc. AmeriStar
Network, Inc.
Date: _________________________ Date:
____________________________
______________________________
_________________________________
David R. Werner / President O. Russell
Crandall Jr., /
President
EXHIBIT A (WLC)
PAYMENT TERMS FOR THE LICENSE AGREEMENT DATED MARCH 11, 1999 BY
AND BETWEEN MORTGAGE INTERNET
TECHNOLOGIES, INC. (MIT) AND AMERISTAR NETWORK, INC. (AMERISTAR)
The license fee for the WLC is a single payment of One Hundred
and fifty thousand dollars ($150,000.00). Payable
under the following terms below.
AmeriStar has already paid MIT $31,000.00 towards the purchase of
this license agreement. MIT agrees to carry the
balance due to MIT of $119,000 under the following payment terms.
5) Any prior payments made to MIT will be credited to the total
pro-rata percentage of ownership and rights of this
license agreement. As such, at the time of execution of this
agreement, AmeriStar has paid $31,000.00 to MIT
towards the purchase of this license as a result of this
payment, AmeriStar currently owns 20.66 percent of the
100% interest in this WLC license agreement and are entitled to
that pro-rata percentage of profits and all rights
associated with this license agreement.
6) The balance of the payment due to MIT is $119,000.00. The
terms of this balance will be paid as follows and all
payments will be credited pro-rata to the license. All prior
and future payments will be credited to this agreement
and are hereby equity interest in this agreement.
a) AmeriStar agrees to pay MIT no less than 50% of all
moneys raised through their existing fund raising
efforts until the remaining balance due on this agreement
is paid in full.
b) AmeriStar will make available to MIT any financials
regarding such fund raising efforts from time to
time to assure MIT of their intent to fulfill their
financial obligation to MIT.
c) If the total balance is not paid in full, whatever
percentage has been paid will be credited pro-rata to the
balance due to MIT and deemed AmeriStar's share of this
license agreement and will be subject to
limitations of rights as such shared interest with MIT.
This addendum will become effective immediately upon execution of
the License Agreement.
Dated this 11th day of March 1999.
Mortgage Internet Technologies, Inc. AmeriStar
Network, Inc.
Date: _________________________ Date:
_______________________
____________________________
____________________________
David R. Werner / President O. Russell
Crandall Jr., /
President
<SEQUENCE>?
[DESCRIPTION] Maintenance Agreement to the AmeriStar License
Agreement
MAINTENANCE AGREEMENT TO THE AMERISTAR LICENSE AGREEMENT
FOR DEVELOPMENT AND ONGOING MAINTENANCE OF THE WLC, VIRTUAL
LENDER, MORTGAGE
LOCATOR, LOAN
POOL.
This maintenance agreement is between AmeriStar Network, Inc.
(AmeriStar) and
Mortgage Internet Technologies,
Inc. (MIT) It's purpose is to outline the services MIT will
provide to
AmeriStar for the purpose of developing the
WLC, VIRTUAL LENDER, MORTGAGE LOCATOR, LOAN POOL software that
AmeriStar has
purchased exclusive
percentage rights to in two prior agreements dated March 11, 1999
and April
5th, 1999. MIT will have an exclusive
right to provide these services to AmeriStar for the duration of
this agreement.
The annual fee for this Maintenance Agreement is $1,500,000.00
(One Million
five hundred thousand dollars) This
maintenance agreement includes all phases of development costs
related to the
scope of the WLC, VIRTUAL
LENDER, MORTGAGE LOCATOR, LOAN POOL and includes ongoing
servicing costs in
addition to technical
support, hardware support, development support and marketing
support. These
fees may be adjusted through mutual
agreement by both parties.
The annual fee for these services have been determined according
to the extent
of development and servicing required
by AmeriStar and MIT to operate the WLC, VIRTUAL LENDER, MORTGAGE
LOCATOR,
LOAN POOL. MIT will
require 1/4 of the maintenance agreement fees upon execution of
this agreement
and the remaining balance will be paid
monthly to MIT prorated over a 12-month period. All invoices
shall be due and
payable in full thirty (30) days from
the date such invoice is received by AmeriStar.
The Maintenance Agreement is effective for the term of this
license agreement,
MIT will appoint a WLC, VIRTUAL
LENDER, MORTGAGE LOCATOR, LOAN POOL Administrator responsible for
WLC, VIRTUAL LENDER,
MORTGAGE LOCATOR, LOAN POOL configuration. Russ Crandall will act
as Liaison
to MIT; The WLC,
VIRTUAL LENDER, MORTGAGE LOCATOR, LOAN POOL Administrator and/or
Liaison will
be available to
AmeriStar and/or AmeriStar's support organization to assist in
diagnosing
operator errors and perform general WLC,
VIRTUAL LENDER, MORTGAGE LOCATOR, LOAN POOL maintenance. MIT will
have
available Technical
Resource Staff responsible for hardware installation and
maintenance,
operating WLC, VIRTUAL LENDER,
MORTGAGE LOCATOR, LOAN POOL and network installation, workstation
configuration, and modem support
according to the terms of the Maintenance agreement.
MIT will make a good faith effort to respond within twenty-four
(24) hours to
the WLC, VIRTUAL LENDER,
MORTGAGE LOCATOR, LOAN POOL support needs of AmeriStar via phone,
Internet,
email or modem.
MIT will attempt in good faith to correct all WLC, VIRTUAL
LENDER, MORTGAGE
LOCATOR, LOAN POOL
errors, provided that AmeriStar and MIT can reproduce the error.
Errors shall
mean any substantial deviation in how
the WLC, VIRTUAL LENDER, MORTGAGE LOCATOR, LOAN POOL functions
when compared
to the
Documentation.
This Maintenance agreement is a constituent part of this WLC,
VIRTUAL LENDER,
MORTGAGE LOCATOR,
LOAN POOL License, and is otherwise subject to the terms and
conditions hereof.
This agreement will adjust annually as the development and the
WLC, VIRTUAL
LENDER, MORTGAGE
LOCATOR, LOAN POOL system matures. 60 days prior to the annual
renewal date,
AmeriStar and MIT will
meet to determine the annual project needs at which time, a new
annual budget
will be established and agreed
upon by both parties, at which time, this agreement may renew for
an
additional 12 months for a total of no less
than 24 month (2 years).
AmeriStar is solely responsible and liable for delivering and
maintaining
proper records and MIT has no
responsibility or liability in respect thereof. AmeriStar
releases and
discharges and shall indemnify and hold
harmless MIT and its representatives from and against any and all
claims
actions, liabilities, damages, losses, costs
and expenses including attorney's fees, costs and expenses made
by persons
other than AmeriStar for any matter
arising out of or relating to AmeriStar's provision of wholesale
Lending
services and use of the WLC, VIRTUAL
LENDER, MORTGAGE LOCATOR, LOAN POOL, VIRTUAL LENDER, MORTGAGE
LOCATOR, LOAN
POOL.
The parties herin acknowledge their full and complete
understanding and
agreement of the terms and conditions
contained herein and represent that they have the authority to
execute this
agreement making the terms and
conditions binding as set forth.
Dated this ________ day of ______ 1999.
Mortgage Internet Technologies, Inc. AmeriStar
Network, Inc.
By: ___________________________ By:
_____________________________
Title: _________________________ Title:
____________________________
