UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
14
AIMRITE HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
Amendment 4
Nevada 68-0386443
(State of organization) (I.R.S. Employer Identification No.)
525 Stevens Ave., Solana Beach, CA 92075
(Address of principal executive offices)
Registrant's telephone number, including area code (858) 259-7400
Registrant's Attorney: Daniel G. Chapman, Esq., 2080 E. Flamingo
Rd., Suite 112, Las Vegas, NV 89119 (702) 650-5660
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value per share, Preferred Stock,
$0.001 par value per share
ITEM 1. DESCRIPTION OF BUSINESS
Background
AimRite Holdings Corporation (the "Company") is a Nevada
corporation formed as Q-Com Corp. on September 6, 1988. On April
10, 1995, the Company amended its Articles of Incorporation
changing its name to Drink World, Inc. in conjunction with a
proposed acquisition (see "Drink World" below). On July 21, 1995,
the Company changed its name to AimRite Holdings Corporation
(AHC) under new management and ownership (see "Formation of
AHC"). The formation of AHC was for the purpose of exploiting and
manufacturing the COAST (Computer Optimized Adaptive Suspension
Technology) system through a master license from a formerly-owned
subsidiary, AimRite Systems International, Inc. ("ASI") (see
below). During the period of 1988 to 1995, the Company's primary
activity was looking for a merger partner. Its principal place of
business is located at 525 Stevens Ave., Solana Beach, CA 92075.
The Restated Articles of Incorporation filed on April 10, 1995,
authorized the Company to issue 50,000,000 shares of Common Stock
with a par value of $0.001 per share, and 10,000,000 shares of
Preferred Stock with a par value of $0.001 per share. On October
9, 1999, the Company amended the Articles of Incorporation to
increase the authorized number of shares to 100,000,000 shares of
common stock, par value of $0.001 per share and 50,000,000 shares
of Preferred Stock, par value of $0.001 per share.
On December 31, 1994, the Company had 1,000,000 Common Shares of
$0.01 par value voting stock issued and outstanding. On July 21,
1995, 8,000,000 shares of the Company's common stock were issued
to acquire an 80% interest in ASI. These shares were issued to 7
entities and one individual. On July 24, 1995, the Company's
stock underwent a 2:1 forward split. On March 12, 1996, the
Company issued 13,980,000 shares of common stock to pay the debts
of the Company equaling $327,957.00 to KenMar Company Trust,
which directed that the shares were to be issued to The Coleman
Family Trust. The Company then authorized a 1:20 reverse stock
split on May 25, 1996. During May, 1996, the Company issued
50,000 shares of its common stock to the K. A. Green for services
rendered to the Company as an officer and director, at the time.
During September 1996, the Company issued 726,000 shares of
common stock for consulting services rendered to the Company;
200,000 shares were issued for cash. An additional 6,800,000 were
issued for payment of debts for $30,000 in accrued salary owed to
Dr. Coleman, $29,133 in loans made to the Company, and $107,101
in Long Term Debt. These shares were issued to the Coleman Family
Trust for the repayment of these debts. In 1997, the Company
issued 442,319 shares in exchange for cash, an additional
1,054,275 shares for consulting services performed, and 2,000,000
shares for a licensing agreement for its current product offering
(see below). In 1998, the Company issued 6,000,000 shares for
payment of debts, 6,035,010 shares were issued for consulting
services rendered valued at $3,826,160 and 2,500,000 shares for a
total consideration of $250,000. During 1999, the Company has
issued 2,000,000 shares of its common stock for a total
consideration of $500,000 and 1,000,000 Series "B" Preferred
shares for services rendered and as payment for debt. All
issuances were made pursuant to Rule 504 of Regulation D. Total
common shares issued and outstanding as of February 18, 2000 is
28,957,605 of which 17,275,004 shares are restricted.
In June 1999, the Company received $879,152 in project investment
capital, which represents accumulated investments by private
individuals in preferred shares.
Drink World
On March 31, 1995, the Company issued 1,750,000 shares of common
stock to acquire Drink World, Inc. The proposed acquisition of
Drink World was to resolve a marketing conflict with a company in
the State of California. On July 12, 1995, the acquisition of
Drink World was terminated because the parties were unable to
agree on material terms. The stock was returned and cancelled.
Two months later, the Company changed its name to AimRite
Holdings Corporation.
Formation of AimRite Holdings Corporation
The name change to AHC was for the purpose of exploiting and
manufacturing the COAST (Computer Optimized Adaptive Suspension
Technology) system through a master license from a formerly-owned
subsidiary, AimRite Systems International, Inc. ("ASI") (see
below). During the period of 1988 to 1995, the Company's primary
activity was looking for a merger partner. The shareholders of
the Company elected Kenneth P. Coleman and Richard Stanczyk as
additional members of the board of directors, effective July 27,
1995. The shareholders also approved of the removal of William J.
Hickey as a Director and Officer of the Company on July 21, 1995.
Aimrite Systems International, Inc. ("ASI")
ASI was formed on January 15, 1993 under the laws of the State of
Nevada for the purpose of engaging in Research and Development,
Marketing, and sales of computer operated vehicle suspension
systems. On May 25, 1993, ASI acquired the patents and
technologies for the COAST systems from Advanced Suspension
Technologies, Inc. in a stock exchange.
Acquisition of ASI
On July 20, 1995, the Company entered into a Plan of Exchange and
Acquisition Agreement (Agreement) between itself and ASI. Under
the terms of the Agreement, the Company was to acquire 80% of the
issued and outstanding shares of ASI in exchange for 8,000,000
restricted common shares of the Company.
The acquisition and agreement was ratified by the shareholders of
the Company on July 21, 1995.
Spin-off of ASI
In early 1997, the ASI Board of Directors determined that it had
no further funds available for the development of the COAST
technology. KenMar Company Trust and AimRite Holdings Corporation
made an offer to ASI encompassing the sale of assets in exchange
for the forgiveness of debt and the assumption of debt and
liabilities. The assets acquired by AHC were divided into
"technology assets" and "hard assets". AHC assumed trade accounts
payable in the sum of $103,314.01, the account payable to the
patent law firm of Christie Parker and Hale in the approximate
amount of $53,213.00; and a portion of the debt to KenMar Company
Trust in the amount of $142,655.00. AHC transferred to all then
existing ASI stockholders one share of AHC stock for each share
of ASI stock they held. KenMar Company Trust transferred 426,584
shares of ASI back to ASI in return, forgave $100,000.00 of debt
owed it by ASI and assumed responsibility for ASI's payments to
Lonnie Woods and James Hamilton, the developers of the COAST
system, under their consulting agreements. The purchase price was
calculated based on the opinion of an outside certified public
accountant as to the value of the assets transferred. The
negotiations consisted of a presentation to the ASI Board of
Directors. The agreements were approved by a disinterested
majority of the board, that is no board member with any interest
or holdings in AHC or KenMar Company Trust voted. The agreements
were subject to being approved by the stockholders of ASI. At a
special meeting of the stockholders of ASI in February, 1997, the
acquisition of the assets and assumption of liabilities was
approved by a disinterested majority of the stockholders of ASI.
Neither KenMar Company Trust nor any related person or entity
received any AHC stock based on their ASI stock holdings.
KenMar Company Trust received patent numbers #4,722,548;
#4,651,838; #4,677,263; #5,529,152. AHC did not have sufficient
assets at the time to acquire the patents and at the same time,
assume responsibility for patent completion and the consulting
agreements with Mr. Woods and Mr. Hamilton. Under the terms of
the licensing agreement, AHC has an international non-exclusive
license with KenMar Company Trust to develop and market the COAST
technology. KenMar Company Trust receives an 8% royalty on each
system. The agreement contains a non-circumvention clause.
Management believes that the lack of ownership of the patents
will not have an impact on AHC because of the non-circumvention
clause of the licensing agreement.
KENMAR Company Trust
KenMar Company Trust ("KenMar") is a private trust which invests
in various companies. It provides all management services
including President, Secretary, Legal, Marketing and Development
to AHC. There is no conflict between its consulting agreement
with AHC and any other of its investments. The acquired patents
and the licensing agreement are described above.
Through an International Licensing and Consulting Agreement (the
"Agreement"), between KENMAR and AHC dated February 25, 1997,
KENMAR obtained ownership to several patents from ASI. KENMAR
appointed AHC as its non-exclusive master licensee for the
manufacture, sales and distribution of products derived from the
suspension technology for the entire world subject to its
performance of the terms of the agreement. Under the terms of the
Agreement, KENMAR has the right to engage in similar agreements
with other master licensees for the same geographical area. For
grant of the licensing rights, AHC transferred to KENMAR
1,700,000 shares of stock in ASI and 2,000,000 shares of stock in
AHC. In further consideration for the grant of license, for each
sale, KENMAR is entitled to receive 8% of the price charged by
the Company. KENMAR assigns 2% of the total payment due to KENMAR
to James Hamilton and Lonnie Woods, the two developers of the
COAST system, who are also the consultants, respectively, of AHC
(see Item 5).
AimRite has a website that can be visited at www.aimrite.com.
The Company is filing this registration statement on a voluntary
basis, pursuant to section 12(g) of the Securities Exchange Act
of 1934 (the "Exchange Act"), in order to ensure that public
information is readily accessible to all shareholders and
potential investors, and to increase the Company's access to
financial markets, and in order to adhere to the new Eligibility
Rules adopted by the NASD.
The Coast System
AimRite Holdings Corporation (AHC), through a through a non-
exclusive master license, holds the worldwide patent rights to
arevolutionary suspension system called Computer-Optimized
Adaptive Suspension Technology (COAST) through the above-
mentioned Agreement. Thispowerful computer-controlled system can
adjust and control up to nine dynamic suspension parameters on
all wheels of any land surface vehicle over 400 times per second.
The COAST concept was born in 1985. All patents associated with
the COAST were developed by James Hamilton and Lonnie Woods, who
are now consultants to the Company through an agreement with
KenMar Company Trust. The theory of operation was presented at a
major automotive conference in Michigan and later published in
the November 1985 issue of IEEE Transactions on Industrial
Electronics. By 1987, some simple hydraulic test devices had been
developed and several patents had been issued that covered the
fundamental principles of the system. It was not until recently
that improvements in computer technology and miniaturization of
electronic components have made the system commercially feasible.
There are two types of systems that control automobile suspension
- - active and passive. Active systems operate by use of
hydraulics, with pumps, high-speed valves, and other expensive,
heavy parts involved. Hydraulic feedback systems are required so
that a central unit is made aware of the pressure required at
each wheel. Passive systems, while smaller and lighter, have not
been able to achieve the performance normally attributed to
active systems, since they do not adjust automatically to road
conditions, but are instead set by the driver.
The COAST system provides performance comparable to active
systems without the need for the types of components needed in
active systems. The performance is achieved utilizing inexpensive
hardware similar to that required for passive systems. With COAST
there are no pumps, hoses, servovalves, and complex sensory
feedback units. Instead, it uses four computer-controlled
hydraulic units (6 units for a bus) to calculate and respond to
changing road conditions in milliseconds, providing comfort,
balance, and strength while reacting to situations that are
impossible for conventional shocks to handle adequately. The
hardware, located at each wheel, consists of a damper, two
solenoid valves, and a position sensor, together with a computer
that controls response and transmits power to the wheel unit.
Each computer is connected by wire to a central controller which
can be mounted anywhere aboard the vehicle. In appearance, it
could be mistaken for a small car stereo amplifier, yet can power
the entire hardware system using less wattage.
Each system also includes a simple control panel near the driver
that allows for ride comfort adjustment of the suspension, and
identifies any problems or failures for quick repair. There is
also an optional air spring control module that controls the ride
height and automatic leveling to gravity for overnight camping
for vehicles that have air suspensions (buses & RVs).
The COAST system is totally automatic, continuously monitoring
and controlling the vehicle's ride performance to provide soft
and stable ride characteristics at all times. The COAST
suspension system can be configured to any specific land surface
transportation vehicle model such as cars, trucks, buses and
agricultural equipment. COAST adjusts and controls up to nine
dynamic areas of a vehicle's suspension 400 times per second.
COAST, through its computer-controlled technology, adjusts and
controls any land vehicle's suspension to simultaneously provide
luxury ride and handling for highway and off-road conditions.
These nine parameters of vehicle motion are:
1. Roll: refers to the tilt sideways of a vehicle when
cornering.
2. Pitch: refers to the tilt forward or backward when vehicle
is braking, cornering, or accelerating.
3. Sprung Natural Frequency (SNF): refers to the tendency of
the vehicle to oscillate on the springs when started in motion.
The spring rate and vehicle weight determines the natural
frequency of motion, typically about 1 Hz.
4. Unsprung Natural Frequency (UNF): refers to the tendency of
the wheel to oscillate between the spring and the road surface
when started in motion. The spring rate and wheel axle weight
determines the natural frequency of motion, typically about 10
Hz.
5. Stored Energy (SE): the energy stored in a spring when
compressed. For the purposes of COAST, it refers to the energy in
a suspension spring when it has been compressed beyond its normal
position such as when a vehicle enters a steep driveway. The
wheels compress upwards toward the chassis when hitting the ramp
and release that energy by causing the front of the vehicle to
rise sharply and the rear to squat downward. Because the rear has
been lowered it has less than normal clearance when it hits the
same ramp.
6. Pumping Down (PD): refers to a situation when the shock
absorber compression forces during rapid wheel movements are less
than the rebound force such that the net or total resulting force
on the chassis is predominantly downward, thereby overpowering
the spring force and pulling the chassis lower to the ground so
that there may be sufficient clearance and bottoming out occurs.
7. Bottoming Out (BO): this refers to the condition where a
bump or other influence on the chassis or wheel causes the axle
to try to rise toward the chassis closer than it can physically,
that is, to exceed the dynamic range of the travel of suspension.
This can cause a severe jolt to the passengers and possibly
damage the shock absorber or suspension.
8. Topping Out (TO): this refers to the condition where a hole
or other influence on the chassis or wheel causes the axle to try
to fall away from the chassis further that it can physically,
that is, to exceed the dynamic range of the travel of the
suspension. This can cause a severe jolt to the passengers and
possibly damage the shock absorber or suspension.
9. Height Control (HC): this refers to the adjustment of the
overall average height of the chassis above the road surface. It
is accomplished by changing the air pressure in air springs (if
used in the suspension).
Present Operations
The Company's day to day operations now and during the past year
have consisted of the refinement of the COAST technology,
presentations to potential customers, consolidation of the
facilities, manufacture of systems for installations on test
vehicles and raising of capital. (See "Item 2 - Test Vehicles")
Products
The Company has completed development of the full automotive
application of the COAST system as well as the simplified system.
Development has not yet been completed for other applications.
All of the products will use the COAST technology. Because of its
small size and tight weight, and the active control it provides,
management believes that COAST is the most powerful suspension
system ever offered to the automotive industry with hardware
similar to that required for passive systems. The COAST system
achieves its flexibility by the size of the actuator as
determined by the weight of the vehicle. There are no specific
costs associated with these applications. Ten systems have been
developed for installation on demonstration vehicles. No further
testing is anticipated.
Subcontractors
The COAST system will be manufactured initially using outside
vendors to build all machined parts, components, circuit boards,
cables, etc. AHC will perform final assembly, packaging and
shipping of the product. As the production volume increases, more
of the fabrication work will be brought `in-house' to lower the
cost and increase the market share. How fast production capacity
is moved inside will largely depend on the availability of
capital for acquisition of the required equipment and facilities.
The Company has entered into an agreement by which Logic
Innovations will manufacture the computer components for the
COAST technology. Under the terms of this agreement, Logic
Innovations, Inc. will specify, design, fabricate, test and
document the COAST product. The Company will provide the
completed system and install it in the rolling chassis (GM
Suburban, see "Item 2"), as well as providing the costs for the
second pass of the tests, additional development costs and travel
costs to the Company facilities. The rate is $110.00 per hour for
hardware and software engineers for effort completed in San
Diego. An agreement with King Technologies consisted of a bid to
manufacture valve components.
The Company has paid Logic Innovation, Inc. $532,042.42 as of
February 18, 2000,and the Company has paid a total of $56,019.58
to King Technologies, Inc. for the period from September 1998 to
February 18, 2000.
ITEM 2 MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management
believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
The funding has been received to implement the business plan.
There are no plans for the Company to liquidate or become a
"shell company".
The COAST system has been completed. Ten complete systems are
being produced to install on demonstrated vehicles. The
operations are currently minimal, considering of installation of
further refinements to the system and installation of the system
on vehicles for demonstration to Original Equipment
Manufacturers. Currently, it is installed and being evaluated on
two General Motors vehicles, a Yukon and Blazer. The Company will
install it on its own 1999 GMC Suburban
The initial distribution strategy will be to begin sales of the
COAST product in automotive after-markets that have not seen an
influx of new products, but whose products are generating profit.
The after-market is that market that sells performance or
appearance-enhancing products for vehicles after they have been
purchased from the manufacturer. The automotive after-market
looks for new products that have the ability to generate high
profit margins. There are currently no computer controlled
suspensions available for any automotive after-market
applications. As a new product, the COAST suspension system will
initially have a high sticker price due to low volumes, so the
marketing strategy must be constructed carefully in the
beginning. There are three types of `volume' customers that
AimRite can focus on before the final consumer.
1. Direct OEM - AHC has started developing the Original
Equipment Manufacturing (OEM) business for the COAST system with
high-end vehicles. These vehicles consist of luxury buses,
motorhomes and heavy duty trucks. Sales will involve shipping
systems direct to the OEM factories, representing the simplest
distribution requirements. No formal agreements have been signed,
although the Company has received inquiries from customers in
this category. The Company will broaden this market by attending
trade shows, making personal sales contacts with demonstrations,
and publishing articles in trade publications.
2. OEM/Independent Customizers - These manufacturers offer
special options, such as Chevrolet's Z71 Off-Road package which
includes Bilstein shocks with special tire and wheel packages,
and Ford's Eddie Bauer limited edition truck package. In
addition, custom vehicle outfitters will be utilized. These
businesses custom-build special sport utility vehicles, heavy
duty trucks and buses that can cost twice as much as the factory
vehicle.
3. Retail & Others - In addition to the OEM customers, AimRite
is developing a program for the new & used auto dealerships,
along with parts stores, to install the COAST system on used
buses, motorhomes and heavy duty trucks. AimRite will also be
exploiting traditional automotive distribution channels
worldwide, which include national chain stores, new car and truck
dealerships, high performance automotive dealers and
distributors, military, motorhome dealers (new and used),
specialty shops, etc.
During the development of the automotive after-market for COAST
in the SUV, motorhome, truck and bus industries, AHC will prepare
to enter a much larger market with a simplified version of the
COAST system that is currently under development. The cost of
this simplified system will be about 80% of the full system, with
only a small reduction in performance. Since this performance
loss applies primarily to the off-road and high performance
markets, the impact will be minimal. More importantly, the new
system is smaller and more easily applied to the remainder of the
automotive market.
AimRite will develop similar strategies for related suspensions,
such as seats on farm tractors and in luxury cars.
COAST's technology, performance and cost of production are all
covered by hardware and software patent protection. There are
very few industry participants in this field because it is so
new. The major automobile manufacturers have been developing
computer controlled suspension systems for their luxury vehicles
and some other major manufacturers of after-market suspension
components have prototype systems that are proprietary and have
yet to appear as viable commercial systems.
There are and have been some active and semi-active suspension
systems on high-end OEM luxury cars (e.g. Cadillac, Lincoln,
Infiniti, etc.), but there are no after-market computer-
controlled suspensions systems. Although the Company's business
plan initially targets speciality and after-market vehicles,
COAST is equally useable on standard vehicles, such as the Ford
Taurus and Buick Century.
The closest competitor in the after-market is a system developed
by Hyrad Corporation and sold through Rancho Suspensions, a
subsidiary of Tenneco. It consists of 4 manually adjustable
shocks connected to a control box on the dashboard. There is no
computer or intelligence of any kind. The driver must manually
turn a knob to change the damping characteristics from soft to
harsh. Officers of Hyrad have contacted us to explore the
possible application of the COAST controller and algorithms to a
new damper they are developing. However, the contact with Hyrad
was terminated after it was determined that its system could not
support the COAST technology.
Commercial production has not commences because the Company is
considering various strategic relationships that have presented
themselves that, if consummated within the next six months, will
obviate the need to expend funds to create manufacturing
facilities. The Company is precluded from disclosing the names of
the companies involved due to confidentiality agreements.
Test Vehicles
Ten systems have been developed for installation on demonstration
vehicles. No further testing is anticipated.
The Research and Development has been completed and the system is
currently being installed on two vehicles supplied by General
Motors. The Company has purchased a 1999 GM Suburban for
demonstration purposes. The Company has six customers who are
evaluating the COAST suspension systems. The Company has made
contacts with key companies who are evaluating the technology.
AHC will either install a COAST system on vehicles supplied by
the following potential clients for their evaluation or a Company
owned vehicle equipped with the system will be provided for test
drives.
General Motors Corporation
Corporation - AHC will install COAST systems on two vehicles
of GMC's choice for evaluation. The Company has installed
the system on a Chevrolet Blazer and a Yukon. General Motors
has ride tested the Yukon and will select one vehicle for
engineering tests at their desert proving ground in Arizona.
Visteon Automotive Systems (Ford) - The Company will install
a COAST system on a vehicle of Visteon's choice for
evaluation of the COAST technology. Visteon is a global
leader in designing innovative automotive technologies that
reflect consumers' top concerns: safety, convenience,
quality, and reliability.
Tenneco Automotive (Monroe)
(Monroe) - The Company has been asked to provide a COAST-
equipped vehicle for Tenneco's evaluation as soon as
possible. They have indicated that if COAST works as well as
claimed, they would get involved with AHC in some way.
Tenneco is one of the world's largest producers and
marketers of ride control products and exhaust systems.
Freightliner Custom Chassis Corporation
Corporation - The Company expects to receive a Fleetwood
motorhome for installation of a COAST system for evaluation.
They have asked if production COAST systems will be
available by the end of 1999. Freightliner is a manufacturer
of premium class 3-8 chassis for the school bus, delivery
van, motorhome and shuttle bus industries and is the number
one diesel manufacturer in the Type A motorhome market,
selling chassis to some 12 OEMs.
Oshkosh Truck Corporation
Corporation - AHC will install a COAST system on a new heavy-
duty airport fire truck. Even though the truck has 8 wheels
and weighs in excess of 100,000 pounds, management believes
the COAST technology will be able to significantly improve
the ride safety & performance. Oshkosh has also expressed
interest in applying COAST to other Oshkosh vehicles.
National Automotive Center (Military)
(Military) - AHC has provided drawings of the COAST system
for integration on a new military truck being developed. NAC
identifies the dual needs of the military and industry and
then forges partnerships to provide innovative new
technologies. The COAST system has been targeted for its new
COMBATT truck program (COMmercially BAsed Tactical Truck).
As part of the COMBATT program, the Company will deliver a
COAST system for evaluation later this year, with additional
systems to be delivered next year.
No government approval or compliance with environmental law is
known by the Company to be necessary at this time.
Approximately 50% of Management's time was spent on research and
development in the last two fiscal years. The cost of such
activities is not borne directly by customers unless there is a
specialized application of COAST requested. The are no such
specialized applications under contract at this time.
Patents
The COAST system is covered by patents that provide for a 17-20
year protection of the technology. AHC, through its non-exclusive
master license, will control the U.S. and Foreign issued patents.
KenMar has the right to engage in similar agreements with other
master licensees for the same geographical area, and may make
direct sales of products derived from the suspension technology.
These patents are related to computer-controlled suspension
systems, dampers, positions switches, or vehicle leveling and
height control used on automobiles, trucks, and motor coaches.
Further, there are international applications designating
numerous countries (including the U.S.). Through the terms of the
Agreement, the Company will pay to KENMAR a minimal royalty
consisting of 8% of the price charged by the Company. No royalty
payments have been made to date.
The Company currently has new patent applications pending for the
following: Suspension Control Unit and Control Valve (a hardware
patent application for a new metal valve unit for the COAST
system), Enhanced Computer Optimized Adaptive Suspension System &
Method (a software patent application covering new algorithms
relating to the ride control) and Enhanced Computer Optimized
Adaptive Air Spring Suspension (a software patent application
covering new algorithms relating to applications to air spring
suspension systems).
Cash Requirements
The Company has expended approximately $6,500,000 on the COAST
technology throughout its development. This amount is the total
number of hard dollars that has been invested by individuals on
the development.
The Company can satisfy its cash requirements for the next 12
months. It plans to raise additional funds, if necessary, though
the exact method has not been discussed at this time.
Notes to Financial Statements
Going Concern - The Company obtained funds to commence
manufacturing and has not concluded any licensing agreements for
the systems.
Note 5 - The Note payable as discussed in the Notes to Financial
Statements is held by KenMar for services to the Company. There
will be no material consequences of non payment.
No funds have been invested or lent to the Company specifically
denominated for the Company itself to commence manufacturing. The
COAST system is complete and ready to manufacture. No time frame
has been established. The Company will consider its options
following completion of the evaluation of the COAST system by
General Motors and other Original Equipment Manufacturers. At
this point, no other OEM has given the Company permission to use
their name in any public document. KenMar Company Trust provides
funds to the Company on an "as needed" basis as well as
consulting services under an agreement calling for payment of
$50,000.00 per month. The amount payable under the note as of
September 30, 1999 is $281,327 for the note payable.
Employees
The current staffing is very lean, being composed of a small
number of officers and directors working with a variety of key
consultants, subcontracting facilities and machine shops.
Management devotes approximately 90% of their time to the
Company. At present, there are no employees. As production and
sales increase, full time personnel and staff will be acquired as
needed.
Year 2000 Compliance
All computers have been developed with Year 2000 compliant
technology by Logic Innovations. All testing has been
satisfactory. No further tests are planned. The Company has no
information on testing by potential customers. The computer
control system used by COAST does not rely on dates, therefore
Y2K is not an issue.
Risk Factors
The Company's business is subject to the following risk factors:
CHANGES IN THE TRANSPORTATION VEHICLE INDUSTRY. The
transportation vehicle business in general, and the vehicle
suspension business in particular, are under going significant
changes, primarily due to technological advances. These advances
have resulted in the availability of alternative types of vehicle
suspensions such as Mazda's electronically controlled hydraulic
shock absorbers, the Lotus hydraulic servo system, and Ford's
automatic load leveler. Nissan-Infiniti offers an extremely
complicated system consisting of pumps, hydraulic actuators,
various force and height measuring sensors, and a sophisticated
computer to control everything. Some models of Cadillac have a
new suspension called Road Sensing System (RSS) which
incorporates fast-acting hydraulic solenoid valves, position
sensors, accelerometers and a computer module. It is impossible
to accurately predict the impacts that these and other new
technological developments may have on the vehicle suspension
industry.
RISKS OF VEHICLE SUSPENSION PRODUCTION. Many of the factors which
may affect the Company and its affairs are subject to change or
are not within the control of the Company, and the extent to
which such factors could restrict the activities or adversely
affect the viability of the Company or the value of its holdings
are not currently ascertainable.
The success of a particular vehicle suspension model is largely
dependent upon public taste which is both unpredictable and
susceptible for anyone to accurately predict the success of any
vehicle suspension model may also be significantly affected by
the popularity of other projects then being distributed.
Accordingly, investors face the serious risk of losing their
entire investment if the Company's projects are, in total,
commercially unsuccessful or unprofitable.
The Company will be subject to the risks inherent in the
production of vehicle suspensions including, without limitation,
delays in completion of production causing increases in
production costs of completing the production, or possible
abandonment of production.
GENERAL PRODUCTION RISKS. There is a general risk that commercial
production and marketing of vehicle suspension systems will never
commence. Production risks include delays, death or termination
of key personnel, cost overruns and defects in components or
production equipment. Delays may be caused by labor disputes,
defective production equipment, incompetent personnel, or design
flaws. Cost overruns may occur if there are cost changes, design
changes, uninsured losses from causes such as natural disasters
or delays in production, or other unplanned expenses. Each
vehicle suspension production model is different, and past
performance is no guarantee of future success. Though the Company
has taken every precaution to assure commercially successful
production and marketing, circumstances could arise which would
overcome its ability to complete and/or deliver the vehicle
suspension systems.
Some categories of personnel who may be involved in the Company's
projects may also be members of guilds or unions, which bargain
collectively with vehicle suspension system manufacturers on an
industry-wide basis from time to time. Any work stoppages or
other labor difficulties could delay the production of the
vehicle suspension systems, resulting in increased production
costs and delayed returns to Investors. The Company does not
anticipate hiring any guild or union personnel.
REGULATORY FACTORS. The Company is regulated with respect to the
offer and sale of its securities by federal and state statutes
and governmental regulatory bodies, including the SEC and state
securities regulatory bodies. Compliance with the complex laws
and regulations governing the business of the Company is
difficult, expensive, and time-consuming and requires significant
managerial supervision.
If trading were to be halted by any regulatory agency, the
Company's ability to complete its capitalization may be totally
restricted.
Additionally, failure to comply with such laws and regulations
could result in material adverse effect on the Company. Further,
any changes in any of these laws and regulations could result in
a material adverse effect on the Company.
The Company is subject to all governmental regulations relating
to the normal operation of a business but not specifically
relating to the sale of the COAST technology.
LIMITED OPERATING EXPERIENCE. The Company has not generated any
revenues since its inception and has a limited operating history.
There can be no assurances that the Company will operate at a
profit. There can be no assurances that the growth strategies
identified by management will be successful, or, if they are
successful, that they will have a positive effect on the earnings
of the Company.
ITEM 3. DESCRIPTION OF PROPERTY.
The corporate and administrative offices are located at 227525
Stevens Ave. West, Solana Beach, CA 92075. The Company has
entered into a lease agreement with Shurgard which provides the
Company with a two story building of approximately 7,128 square
feet for corporate offices, research and development, testing and
installation of the COAST systems on a one half acre site. The
ten year lease incorporates 20,000 square feet of land for future
expansion. The base rent is $10.80 per square foot (on an annual
basis) on the building for 10 years with two ten year renewal
options. The lease also contains an option to terminate the lease
if the business is purchased with 6 months notice and the payment
of 9 months rent as a termination fee. The base monthly rent of
$3,375.00 will increase according to the consumer price index on
a yearly basis. The lease commenced in July, 1999. The Company
obtained free rent for the first six months.
Since the company is incorporated in Nevada, it is required to
maintain a resident office in that state in which corporate
documents are available. The resident office is located at 3675
Pecos-McLeod, Suite 1400, Las Vegas, NV 89121. No activities take
place in the resident office. All other activities have been
consolidated to the new facility described above.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth each person known to the Company,
as of Friday, May 27, 1999, to be a beneficial owner of five
percent (5%) or more of the Company's common stock, by the
Company's directors individually, and by all of the Company's
directors and executive officers as a group. Except as noted,
each person has sole voting and investment power with respect to
the shares shown. Note that the only beneficial owners of more
than 5% of the common stock are the directors - therefore, only
one table is presented.
<TABLE>
<S> <C> <C> <C>
Title of Name/Address Shares Percentage
Class of Owner Beneficially Ownership
Owned
Common The Coleman Family Trust: 15,092,090 52.12%
Kenneth P. Coleman & Mary
Kay Koldeway-Coleman
655 San Raodolfo Dr. #124
Solana Beach, CA 92075
Common The Coleman Family Trust: 12,458,755 43.02%
655 San Raodolfo Dr. #124
Solana Beach, CA 92075
Common Stanczyk Investment Co.: 126,800 0.44%
Richard Stanczyk (Rick
Stanczyk)
1297 Orchard Glenn
Encinitas, CA 92024
Common Stanczyk Investment Co.: 126,800 0.44%
1297 Orchard Glenn
Encinitas, CA 92024
Common Total Ownership over 5% and 15,218,890 52.56%
Directors and Officers (2
individuals)
Common Total Ownership over 5% and 12,585,555 43.46%
Directors and Officers (3
individuals)
Preferre James One Twelve, Ltd. 211,640 75.68%
d
Preferre James One Twelve, Ltd. 211,640 48.15%
d Principal: Robert L.
(Series Sanders
B) c/o R.L. Sanders Family
Trust
3906 Via Canrejo
San Diego, CA 92130
Preferre Independent Marketing 38,000 8.64%
d Associates Ltd
(Series Mr. Lewis Rowe
B) P.O. Box 1561 GT
Zephyr House
Mary Street
Grand Cayman Islands
British West Indies
Preferre Infinity Enterprises 159,936 36.38%
d Principal: Mr. Paul
(Series O'Malley
B) 3331 Wood Parrish
Los Angeles, CA 90027
Preferre Dawn Coslett and Terry 25,000 5.69%
d Demuth
(Series 9221 Tropico Dr.
B) La Mesa, CA 91941
</TABLE>
Please Note: Kenneth Coleman and Mary Kay Koldeway-Coleman are
the beneficial owners of the shares held by The Coleman Family
Trust. Richard Stanczyk is the beneficial owner of the Stanczyk
Investment Co.
Added Note: The Series B preferred stock has no voting rights. No
preferred stock, other than Series B, has been issued.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors. Information as to the directors and
executive officers of the Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Kenneth P. Coleman 53 President/Direc
655 San Raodolfo Dr. tor
#124
Solana Beach, CA 92075
Mary Kay Koldeway- 43 Secretary/Direct
Coleman or
655 San Raodolfo Dr.
#124
Solana Beach, CA 92075
Richard Stanczyk 58 Treasurer/Direct
1297 Orchard Glenn or
Encinitas, CA 92024
</TABLE>
Kenneth P. Coleman; President: Dr. Kenneth Coleman has been a
Director and Officer of the Company since its inception.July
1995.
Since 1995, Dr. Coleman has been responsible for the day to day
operations of the Company as is President.
Since 1994, Dr. Coleman has also been responsible for the
managing the investments of the KenMar Company Trust.
As Chairman of the Board of Tunex International, Inc., Salt Lake
City, Utah, Dr. Coleman was responsible for the administration of
goals and policies, expansion capital, and overall well-being of
the organization. As a publicly traded corporation, Tunex serves
the automotive after-market with a multi-million dollar budget,
60 franchise locations in 10 states, and 400 personnel. Tunex
supplied parts and equipment to the automotive aftermarket.
As President of the International Foundation of Consultants, Salt
Lake City, Utah and Pasadena, California, Dr. Coleman served as a
co-consultant to over 45 corporations. He aided in the overall
development of corporate image and management and assisted in
acquisition mergers. Dr. Coleman also provided private counseling
to executives and conducted seminars and workshops nationally as
well as developed radio and TV programs and supervised staff.
Since 1993, Dr. Coleman has been President and CEO of Aimrite
Systems International, Inc., San Diego, California.
Dr. Coleman's educational background includes:
BA in Psychology, Minor in Pre-Medicine, Boise State
University, 1971
Educational Psychology, Butler University, 1971
MS in Counseling Psychology, Purdue University, 1973
Philosophy of Psychology, Oxford University, 1973
Industrial and Group Psychology, Burnell University, 1978
Psychological Testing, University of Southern California,
1979
Ph.D. in Psychology, Minor in Management, Pacific States
University, 1979
Mary Kay Koldeway-Coleman; Secretary: Mrs. Mary Kay Koldeway-
Coleman has been a Director and Officer of the Company since
1997.
Since 1993, Mrs. Coleman has also been an Officer and Director of
Aimrite Systems International, Inc, where she had been
responsible for its day to day operations.
Since 1978, Mrs. Coleman has conducted seminars and testing
placement programs for businesses and corporations. She consulted
with Tunex Corporation, Salt Lake City, Utah, an after-market
automotive industry, and franchise organization. She has also
worked in sales, management, payroll and workers' compensation.
From 1978 to 1980, Mrs. Coleman was an Assistant with James A.
Evenson, Economist & J.D., Boulder, Colorado. There she estimated
economic losses for personal injury and wrongful death cases,
maintained client files, designed and developed graphics for
litigation, and prepared legal reports for expert witness
testimony.
From 1980 to 1982, she was a Research Associate with Frank K.
Stuart & Associates, Salt Lake City, Utah. She collected,
organized and transcribed business correspondence for legal
review. She also wrote objective reports from collected documents
for counsel.
From 1982 to 1985, Mrs. Coleman was a Trade Director with Barter
Systems, Inc., Salt Lake City, Utah. There she maintained client
requests and accounts, purchased new products, obtained new
accounts, was responsible for doubling trade volume in one year,
and oversaw staff meetings.
From 1985 to 1990, Mrs. Coleman was the Vice-President of
Operations at Goldman, Ltd., San Francisco, California. After
receiving her paralegal degree, she developed and managed the
company as a new corporation including filing the required
articles of incorporation and acquiring the necessary licenses.
She researched federal and state laws regarding label approvals,
international shipping, bonding, customs and warehousing. She
wrote advertising brochures and articles in national trade
magazines. She also managed sales people and coordinated shipping
lines for international ocean freight.
Mrs. Mary Kay Coleman's educational background includes:
BA in Psychology & Sociology, Western State College,
Gunnison, Colorado, 1978
Paralegal degree from Westminster College, Salt Lake City,
Utah, 1985
Richard Stanczyk; Treasurer
Richard Stanczyk has been a director and Chief Financial Officer
of the Company since August, 1993. He has had no other employment
during that time.
From 1990 to 1993, Mr. Stanczyk was a Chief Financial Officer for
M.V.F. Marine, National City, California.
From 1978 to 1990, Mr. Stanczyk was self-employed as an enrolled
agent, a licensed professional representing and consulting
individuals, partnerships and corporations in all matters
relating to income, payroll and taxation, in Colorado and
California.
Mr. Stanczyk's educational background includes:
Bachelor of Science Degree in Accounting, Detroit College
Kenneth and Mary Kay Koldeway Coleman are husband and wife. There
are no other family relationships among the officers and
directors.
Consultants
James M. Hamilton provides services to AHC under the consulting
agreement with KenMar Company Trust as the Director of
Engineering. He is the co-inventor of the COAST system and is
responsible for all development aspects of the computer programs
and hardware associated with COAST. He has published technical
papers for the Institute of Electrical Electronic Engineers. He
received a BS in Electrical Engineering with Honors from Loyola
University in 1972 and his MS in Computer Science from UCLA in
1974. For 15 years he worked for Hughes Aircraft Company and held
the positions of Senior Project Engineer, Department Manager and
Senior Scientist.
Lonnie K. Woods is a consultant to KenMar Company Trust and co-
inventor of the COAST system. He serves as Executive Director of
COAST Operations under AHC's agreement with KENMAR. He was the
founder in 1969 and President of Rough County Inc., an off-road
suspension company with annual sales of over $6,000,000. After
selling the company, he served as Project Manager (Mexico
Operations) for Kelpie Industries USA Inc. from 1988-1989. From
1990-1992, he was President of Deltron, Inc. Mr. Woods has used
his experience and contacts in the automotive industry to help
AHC establish and implement a comprehensive marketing and
development plan for the COAST.
The Company has not obtained key-man life insurance or entered
into any employment agreements with management.
ITEM 6. EXECUTIVE COMPENSATION
No compensation of directors or executive officers is paid or
anticipated to be paid by the Company. Through the Licensing and
Consulting Agreement [see "Exhibit 10.1, paragraph 5(a)], KENMAR
provides the services of consultants to personally assist the
Company in the closing of major potential sales by distributors.
The Company, in turn, pays KENMAR a $50,000 monthly consulting
fee for management, engineering, development and legal services.
The Officers of the Company are consultants working for KENMAR.
Any compensation is paid directly to them by KENMAR. Kenneth
Coleman and Mary Kay Koldeway-Coleman are also the Trustees for
KENMAR Company Trust.
To date, KenMar has paid Mr. Stanczyk $45,000.00 and Dr. Coleman
$20,000.00.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There are no promoters of the Company.
Kenneth and Mary Kay Koldeway Coleman are husband and wife. There
are no other family relationships among the officers and
directors.Coleman and Mary Kay Koldeway Coleman also serve as the
Trustees for the KENMAR Company Trust. KENMAR currently holds the
patents to which the Company is a licensee. KENMAR also has a
consulting agreement in which the Company pays KENMAR a monthly
consulting fee.
The Company has no policy prohibiting it from entering into
transactions with affiliates.
Note: The major stock holder of the Company is also the major
stockholder of ASI.
Added Note: All transactions involving KenMar Company Trust were
approved by a disinterested majority of the board and no board
member with any interest or holdings in the Company or KenMar
voted in approving any such transactions. Under the terms of
consulting agreements with KenMar, the parties agree that the
primary fiduciary duty is owed to the Company and its
stockholders.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is traded on the over-the-counter
market in the United Stateswas previously listed on the OTC-BB
and is now quoted on the Pink Sheets under the symbol [NASD OTC
BB: AIMH].AIMH. The following table sets forth the high and low
bid quotations during recent quarters while the Company's stock
was quoted on the OTC-BB:
<TABLE>
<S> <C> <C>
Qtr. Ended Low/Bid High/Ask
June 30, 0.50 1.67
1997
Sept. 30, 0.1875 1.12
1997
Dec. 31, 0.125 0.1875
1997
March 31, 0.9375 1.1875
1998
June 30, 0.25 1.52
1998
Sept. 30, 0.16 0.64
1998
Dec. 31, 0.11 0.42
1998
March 31, 0.125 1.00
1999
June 30, 0.625 3.125
1999
</TABLE>
Note: The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual
transactions. Source: America Online, WWW.ASKRESEARCH.COM.
There are 209 record owners of the Company's common stock. The
Company has never paid a cash dividend and has no present
intention of doing so in the foreseeable future.
The Company's common stock is considered a "penny stock" under
the Commission rules.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On March 13, 1996, the Company issued approximately 14,000,000 to
pay the debts of the Company. Then on May 25, 1996, the Company
authorized a 20:1 reverse split for its then outstanding stock.
On May 31, 1996 the Company then issued an additional 6,800,000
shares of its common stock to pay additional debts valued at
$166,234 to KenMar Company Trust, which directed that the shares
be issued to the Coleman Family Trust. The Company also issued
50,000 of its common stock for services rendered valued at
$8,000.00 to one individual. On June 25, 1996, the Company issued
200,000 shares of its common stock for a total consideration of
$4,000.00 to total of two investors. During September 1996, the
Company issued approximately 726,000 for consulting services
rendered to the Company valued at $246,090. These shares were
issued to a total of 14 individuals. These issuances were made in
reliance upon an exemption from registration pursuant to Section
4(2) of the Securities Act.
On February 12, 1997, the Company issued approximately 27,773
shares of its common stock in exchange for $15,000 and an
additional 1,054,275 shares of common stock were issued at $.10
per share for consulting services performed, and 2,000,000 shares
of its common stock were issued at $.63 per share for a licensing
agreement for its current product offering. On February 24, 1997,
the Company issued 14,546 shares of its common stock for a
consideration of $8,000.00. On June 5, 1997 the Company issued
400,000 shares of its common stock for a consideration of
$8,000.00. All issuances for cash were made in reliance upon an
exemption from registration pursuant to Rule 504 of Regulation D.
The issuances for services rendered to the Company were issued in
reliance upon an exemption from registration pursuant to Section
4(2) of Securities Act.
During January 1998, the Company issued 3,500,000 shares of its
common stock to 8 individuals valued at $.63 per share. During
March 1998, the Company issued an additional 2,000,000 shares of
its common stock to 5 individuals for payment of services valued
at $.63 per share. These issuances of stock were made pursuant to
an exemption from registration provided by Rule 504 of Regulation
D. During April 1998, the Company issued an additional 120,010
shares of its common stock at $.63 per share for payment of
consulting services. During September 1998, the Company issued
40,000 shares of its common stock to one individual at $.63 per
share for consulting services and an additional 6,000,000 shares
of its common stock in payment of a loan at $.25 per share to
KenMar Trust Company, which directed its shares be issued to the
Coleman Family Trust. These issuances were made in reliance upon
an exemption from registration pursuant to Section 4(2) of the
Securities Act. On June 10, 1998, the Company sold a total of
2,500,000 shares of common stock for a total consideration of
$250,000.00 to a total of five individuals, which relied upon an
exemption from registration pursuant to Rule 504 of Regulation D.
During October 1998, the Company issued 375,000 shares of its
common stock for consulting services rendered to the Company,
including legal services, to 4 individuals, pursuant to exemption
provided by section 4(2) of the Securities Act of 1933, as
amended.
amended.
During March 1999, the Company sold a total of 2,000,000 shares
of common stock to one individual for a total consideration of
$500,000. During June and July of 1999, a total of 439,576 shares
of Series B Preferred Stock were sold for total consideration of
$879,152, pursuant to exemption provided by section 4(2) of the
Securities Act of 1933, as amended.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 100,000,000 shares of Common Stock, $0.001 par value per
share, of which 28,957,605 were issued and outstanding as of May
27, 1999. The shares are non-assessable, without pre-emptive
rights, and do not carry cumulative voting rights. Holders of
common shares are entitled to one vote for each share on all
matters to be voted on by the stockholders. The shares are fully
paid, non-assessable, without pre-emptive rights, and do not
carry cumulative voting rights. Holders of common shares are
entitled to share ratably in dividends, if any, as may be
declared by the Company from time-to-time, from funds legally
available. In the event of a liquidation, dissolution, or winding
up of the Company, the holders of shares of common stock are
entitled to share on a pro-rata basis all assets remaining after
payment in full of all liabilities.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of preferred stock, $0.001 par value per
share. The Company's Board of Directors has the authority,
without action by the shareholders, to issue all or any portion
of the authorized but unissued preferred stock in one or more
series and to determine the voting rights, preferences as to
dividends and liquidation, conversion rights, and other rights of
such series. The preferred stock, if and when issued, may carry
rights superior to those of common stock; however no preferred
stock may be issued with rights equal or senior to the preferred
stock without the consent of a majority of the holders of then-
outstanding preferred stock.
The Company issued a total of 439,576 shares of Preferred Stock
designated as Series B Preferred Stock in 1999. Series A
preferred stock is a non-convertible voting stock, in which the
holders shall be entitled to have 100 votes for each share held.
This Series B has no voting rights, the shares cannot be
transferred, sold, pledged, encumbered or given away for a period
of one year following the acquisition of said shares. The rights,
preferences, privileges and restrictions for Series C will be set
by the Board at a future time. On October 9, 1999, the articles
were amended to provide for an increase of common shares to
100,000,000 and 50,000,000 preferred. The Company has classified
1,000,000 shares as Series "A", 2,000,000 as Series "B" and
47,000,000 as Series "C". No rights or other terms have been set
for Series "C" preferred stock.
The Company considers it desirable to have preferred stock
available to provide increased flexibility in structuring
possible futureacquisitions and financings, and in meeting
corporate needs which may arise. If opportunities arise that
would make the issuance of preferred stock desirable, either
through public offering or private placements, the provisions for
preferred stock in the Company's Certificate of Incorporation
would avoid the possible delay and expense of a shareholder's
meeting, except as may be required by law or regulatory
authorities. Issuance of the preferred stock could result,
however, in a series of securities outstanding that will have
certain preferences with respect to dividends and liquidation
over the common stock which would result in dilution of the
income per share and net book value of the common stock. Issuance
of additional common stock pursuant to any conversion right which
may be attached to the terms of any series of preferred stock may
also result in dilution of the net income per share and the net
book value of the common stock.
The issuance of preferred stock could have the effect of making
it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. Further, certain
provisions of Nevada law could delay or make more difficult
amerger, tender offer, or proxy contest involving the Company.
While such provisions are intended to enable the Board of
Directors to maximize shareholder value, they may have the effect
of discouraging takeovers which could be in the best interests of
certain shareholders. There is no assurance that such provisions
will not have an adverse effect on the market value of the
Company's stock in the future.
Shares Eligible for Future Sale
As of May 27, 1999, of the 28,957,605 common shares issued and
outstanding shares, 17,700,004 are subject to resale restrictions
and, unless registered under the Securities Act of 1933 (the
"Act") or exempted under another provision of the Act, will be
ineligible for sale in the public market. Sales may be made after
two years from their acquisition in accordance with Rule 144
promulgated under the Act.
In general, Rule 144 permits a person (or persons whose shares
are aggregated) who has beneficially owned shares that were
acquired privately (either directly from the Company or from an
Affiliate of the Company) for at least two years, or who is an
Affiliate of the Company, to sell within any three-month period,
a number of such shares that does not exceed the greater of 1% of
the then-outstanding shares of the Company's Common Stock
(approximately 289,576 as of May 27, 1999) or the average weekly
trading volume in the Company's common stock during the four
calendar weeks immediately preceding such sale. Sales under Rule
144 are also subject to certain manner of sale provisions, notice
requirements, and the availability of current public information
about the Company. A person (or persons whose shares are
aggregated) who is not deemed to have been an Affiliate at any
time during the 90 days preceding a sale, and who has
beneficially owned shares for at least three years, is entitled
to sell all such shares under Rule 144 without regard to the
volume limitations, current public information requirements,
manner of sale provisions, or notice requirements. Sales of
substantial amounts of the Common Stock of the Company in the
public market could affect prevailing market prices adversely.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts, or omissions
not amounting to intentional misconduct, fraud or a knowing
violation of the law, since provisions have been made in the
Articles of incorporation and By-laws limiting such liability.
The Articles of Incorporation and By-laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
ITEM 13. FINANCIAL STATEMENTS.
The financial statements and supplemental data required by this
Item 13 follow the index of financial statements appearing at
Item 15 of this Form 10-SB.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not Applicable.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Report of Independent Auditors, Jones, Jensen &
Company, dated July 20, 1999.
Balance Sheet as of June 30, 1999 (unaudited) and
December 31, 1998.
Statement of Operation for the years ended December 31,
1998 and December 31, 1997, for the six-month period
ended June 30, 1999 (unaudited), and for the period
from inception through June 30, 1999 (unaudited).
Statement of Stockholders' Equity.
Statement of Cash Flows for the years ended December
31, 1998 and December 31, 1997, for the six-month
period ended June 30, 1999 (unaudited), and for the
period from inception through June 30, 1999
(unaudited).
Notes to Audited Financial Statements
Balance Sheet as of September 30, 1999 and December 31,
1998
Statement of Operation for the nine months ended
September 30, 1999 and September 30, 1998, and for
the period from inception through September 30,
1999.
Statement of Stockholders' Equity
Statement of Cash Flows for the nine months ended
September 30, 1999 and September 30, 1998, and for
the period from inception through September 30,
1999.
Notes to Financial Statements
EXHIBITS
3.1AArticles of Incorporation
3.1BAmended Articles of Incorporation
3.2 By-Laws
10.1 International Licensing and Consulting Agreement
10.2 COAST Development Quotation
10.3 Amendment to Consulting Agreement
10.4 Lease Agreement
RESTATED
ARTICLES OF INCORPORATION
OF
Q-COM CORP.
On the 31st day of March 1995, pursuant to the Nevada
Revised Statutes 78.320 and other applicable Nevada Revised
Statutes, a Special Meeting of Shareholders representing a
majority of the holders was called. Whereas, there being
shares validly issued and outstanding and entitled to vote,
with a total voting power of 1,000,000, shareholders voted
either by proxy or In person 800,000 shares FOR,
representing 80.00 % being a majority and 0 shares AGAINST,
to RESTATE THE ARTICLES OF INCORPORATION OF Q-COM CORP.
Therefore, the Corporation does by these presents
Restate its Articles of Incorporation as follows:
FIRST: Name.
The name of the corporation is DRINK WORLD, INC.. (the
"Corporation").
SECOND: Registered Office and Agent.
The address of the registered office of the Corporation
in the State of Nevada is 3566 So. Polaris Ave., #4A, Las
Vegas, NV. 89103, in the City of Las Vegas, County of
Clark. The name and address of the Corporation's registered
agent in the State of Nevada is All Corporate Services, at
said address, until such time as another agent is duly
authorized and appointed by the Corporation.
THIRD: Purpose and Business.
The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may now or
hereafter be organized under the Nevada Revised Statutes of
the State of Nevada, including, but not limited to the
following:
(a) The Corporation may at any time exercise such rights,
privileges and powers, when not inconsistent with the purposes
and object for which this Corporation is organized;
(b) The Corporation shall have power to have succession by its
corporate name in perpetuity, or until dissolved and its affairs
would up according to law-,
(c) The Corporation shall have power to sue and be sued in any
court of law or equity-,
(d) The Corporation shall have power to make contracts;
(e) The Corporation shall have power to hold, purchase and
convey real and personal estate and to mortgage or lease any such
real and personal estate with its franchises. The power to hold
real and personal estate shall include the power to take the same
by devise or bequest in the State of Nevada, or in any other
state, territory or country;
(f) The Corporation shall have power to appoint such officers
and agents as the affairs of the Corporation shall require and
allow them suitable compensation;
(g) The Corporation shall have power to make bylaws not
inconsistent with the constitution or laws of the United States,
or of the State of Nevada, for the management, regulation and
government of its affairs and property, the transfer of its
stock, the transaction of its business and the calling and
holding of meetings of stockholders;
(h) The Corporation shall have the power to wind up and dissolve
itself. or be wound up or dissolved;
(i) The Corporation shall have the power to adopt and use a
common seal or stamp, or to not use such seal or stamp and if one
is used, to alter the same. The use of a seal or stamp by the
Corporation an any corporate documents is not necessary. The
Corporation may use a seal or stamp, if it desires, but such use
or non-use shall not in any way affect the legality of the
document; The Corporation shall have the power to borrow money
and contract debts when necessary for the transaction of its
business, or for the exercise of its corporate rights, privileges
or franchises, or for any other lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of
exchange, debentures and other obligations and evidence of
indebtedness, payable at a specified time or times, or payable
upon the happening of a specified event or events, whether
secured by mortgage, pledge or otherwise, or unsecured, for money
borrowed, or in payment for property purchased, or acquired, or
for another lawful object;
(j) The Corporation shall have the power to guarantee, purchase,
hold, sell, assign, transfer, mortgage, pledge or otherwise
dispose of the shares of the capital stock of, or any bonds,
securities or evidence of indebtedness created by any other
corporation or corporations of the State of Nevada, or any other
state, or government and, while the owner of such stock, bonds,
securities or evidence of indebtedness, to exercise all the
rights, powers and privileges of ownership, including the right
to vote, if any:
(k) The Corporation shall have the power to purchase, hold, sell
and transfer shares of Its own capital stock and use therefor its
capital, capital surplus, surplus or other property or fund;
(l) The Corporation shall have the power to conduct business,
have one or more offices and hold, purchase, mortgage and convey
real and personal property in the State of Nevada and in any of
the several states, territories, possessions and dependencies of
the United States, the District of Columbia and any foreign
country;
(m) The Corporation shall have the power to do all and
everything necessary and proper for the accomplishment of the
objects enumerated in its articles of Incorporation, or any
amendments thereof, or necessary or incidental to the protection
and benefit of the Corporation and, in general, to carry on any
lawful business necessary or incidental to the attainment of the
purposes of the Corporation, whether or not such business is
similar n nature to the purposes set forth in the articles of
Incorporation of the Corporation, or any amendment thereof-,
(n) The Corporation shall have the power to make donations for
the public welfare or for charitable. scientific or educational
purpose;
(o) The Corporation shall have the power to enter partnerships,
general or limited, or joint ventures, in connection with any
lawful activities.
FOURTH: Capital Stock.
1) Classes and Number of Shares. The total number of shares of
all classes of stock, which the Corporation shall have authority
to issue is Sixty Million (60,000,000). consisting of Fifty
Million (50,000,000) shares of Common Stock, par value of $0.001
per share ( the "Common Stock") and Ten Million (10,000,000)
shares of Preferred Stock, which have a par value of $0.001 per
share (the "Preferred Stock").
2) Powers and Rights of Common Stock
a) Preemptive Right. No shareholders of the Corporation holding
common stock shall have any preemptive or other right to
subscribe for any additional un-issued or treasury shares of
stock or for other securities of any class, or for rights,
warrants or options to purchase stock, or for scrip, or for
securities of any kind convertible into stock or carrying stock
purchase warrants or privileges unless so authorized by the
Corporation;
b) Voting Rights and Powers. With respect to all matters upon
which stockholders are entitled to vote or to which stockholders
are entitled to give consent, the holders of the outstanding
shares of the Common Stock shall be entitled to cast thereon one
1 vote in person or by proxy for each share of the Common Stock
standing In his name.
c) Dividends and Distributions.
(i) Cash Dividends. Subject to the rights of holders of
Preferred Stock, holders of Common Stock shall be entitled to
receive such cash dividends as may be declared thereon by the
Board of Directors from time to time out of assets or funds of
the Corporation legally available therefor;
(ii) Other Dividends and Distributions. The Board of Directors
may issue shares of the Common Stock in the form of a
distribution or distributions pursuant to a stock dividend or
split-up of the shares of the Common Stock;
(iii) Other Rights. Except as otherwise required by the
Nevada Revised Statutes and as may otherwise be provided in
these Restated Articles of Incorporation, each share of the
Common Stock shall have Identical powers, preferences and
rights, including rights in liquidation;
3) Preferred Stock. The powers, preferences, rights,
qualifications, limitations and restrictions pertaining to the
Preferred Stock, or any series thereof, shall be such as may be
fixed, from time to time, by the Board of Directors in Its sale
discretion, authority to do so being hereby expressly vested in
such Board.
4) Issuance of the Common Stock and the Preferred Stock. The
Board of Directors of the Corporation may from time to time
authorize by resolution the issuance any or ail shares of the
Common Stock and the Preferred Stock herein authorized in
accordance with the terms and conditions set forth in these
Restated Articles of Incorporation for such purposes. In such
amounts, to such persons, corporations, or entities, for such
consideration and in the case of the Preferred Stock, in one or
more series, all as the Board of Directors in Its discretion may
determine and without any vote or other action by the
stockholders. except as otherwise required by law. The Board of
Directors, from time to time, also may authorize, by resolution,
options, warrants and other rights convertible into Common or
Preferred stock (collectively "securities.") The securities must
be issued for such consideration, including cash, property, or
services, as the Board of Directors may deem appropriate, subject
to the requirement that the value of such consideration be no
less than the par value of the shares issued. Any shares issued
for which the consideration so fixed has been paid or delivered
shall be fully paid stock and the holder of such shares shall not
be liable for any further call or assessment or any other payment
thereon, provided that the actual value of such consideration is
not less than the par value of the shares so issued. The Board of
Directors may issue shares of the Common Stock in the form of a
distribution or distributions pursuant to a stock dividend or
split-up of the shares of the Common Stock only to the then
holders of the outstanding shares of the Common Stock.
5. Cumulative Voting. Except as otherwise required by
applicable law, there shall be no cumulative voting an any
matter brought to a vote of stockholders of the
Corporation.
FIFTH: Adoption of Bylaws.
In the furtherance and not in limitation of the powers
conferred by statute and subject to Article Sixth hereof,
the Board of Directors is expressly authorized to adopt,
repeal, rescind, after or amend in any respect the Bylaws
of the Corporation ( the "Bylaws").
SIXTH: Shareholder Amendment of Bylaws.
Notwithstanding Article Fifth hereof, the Bylaws may
also be adopted, repealed, rescinded, altered or amended in
any respect by the stockholders of the Corporation, but
only by the affirmative vote of the holders of not less
than seventy-five percent (75%) of the voting power of all
outstanding shares of voting stock, regardless of class and
voting together as a single voting class.
SEVENTH: Board of Directors.
The business and affairs of the Corporation shall be
managed by and under the direction of the Board of
Directors. Except as may otherwise be provided pursuant to
Section 4 of Article Fourth hereof in connection with
rights to elect additional directors under specified
circumstances, which may be granted to the holders of any
class or series of Preferred Stock, the exact number of
directors of the Corporation shall be determined from time
to time by a Bylaw or amendment thereto, providing that the
number of directors shall not be reduced to less than two
(2). The directors holding office at the time of the filing
of these Restated Articles of Incorporation shall continue
as directors until the next annual meeting and/or until
their successors are duly chosen.
EIGHTH: Term of Board of Directors.
Except as otherwise required by applicable law, each
director shall serve for a term ending on the date of the
third Annual Meeting of Stockholders of the Corporation
(the "Annual Meeting") following the Annual Meeting at
which such director was elected. All directors, shall have
equal standing.
Notwithstanding the foregoing provisions of this
Article Eighth each director shall serve until his
successor is elected and qualified or until his death,
resignation or removal; no decrease In the authorized
number of directors shall shorten the term at any incumbent
director; and additional directors, elected pursuant to
Section 4 of Article Fourth hereof in connection with
rights to elect such additional directors under specified
circumstances, which may be granted to the holders of any
class or series of Preferred Stock, shall not be included
in any class, but shall serve for such term or terms and
pursuant to such other provisions as are specified in the
resolution of the Board of Directors establishing such
class or series.
NINTH: Vacancies on Board of Directors.
Except as may otherwise be provided pursuant to Section
4 of Article Fourth hereof in connection with rights to
elect additional directors under specified circumstances,
which may be granted to the holders of any class or series
of Preferred Stock, newly created directorships resulting
from any increase in the number of directors, or any
vacancies on the Board of Directors resulting from death,
resignation, removal or other causes, shall be filled
solely by the affirmative vote of a majority of the
remaining directors then in office even though less than a
quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office
far the remainder of the full term of directors in which
the new directorship was created or the vacancy occurred
and until such director's successor shall have been elected
and qualified or until such director's death, resignation
or removal, whichever first occurs.
TENTH: Removal of Directors.
Except as may otherwise be provided pursuant to Section
4 of Article Fourth hereof in connection with rights to
elect additional directors under specified circumstances,
which may be granted to the holders of any class or series
of Preferred Stock, any director may be removed from office
only for cause and only by the affirmative vote of the
holders of not less than seventy-five percent (75%) of the
voting power of all outstanding shares of voting stock
entitled to vote in connection with the election of such
director, provided, however, that where such removal is
approved by a majority of the Directors, the affirmative
vote of a majority of the voting power of all outstanding
shares of voting stock entitled to vote in connection with
the election of such director shall be required for
approval of such removal. Failure of an incumbent director
to be nominated to serve an additional term of office shall
not be deemed a removal from office requiring any
stockholder vote.
ELEVENTH: Stockholder Action.
Any action required or permitted to be taken by the
stockholders of the Corporation must be effective at a duly
called Annual Meeting or at a special meeting of
stockholders of the Corporation, unless such action
requiring or permitting stockholder approval is approved by
a majority of the Directors, in which case such action may
be authorized or taken by the written consent of the
holders of outstanding shares of Voting Stock having not
less than the minimum voting power that would be necessary
to authorize or take such action at a meeting of
stockholders at which all shares entitled to vote thereon
were present and voted, provided all other requirements of
applicable law and these Articles have been satisfied.
TWELFTH: Special Stockholder Meeting.
Special meetings of the stockholders of the Corporation
for any purpose or purposes may be called at any time by a
majority of the Board of Directors or by the Chairman of
the Board or the President. Special meetings may not be
called by any other person or persons. Each special meeting
shall be held at such date and time as is requested by the
person or persons calling the meeting, within the limits
fixed by law.
THIRTEENTH: Location of Stockholder Meetings.
Meetings of stockholders of the Corporation may be held
within or without the State of Nevada, as the Bylaws may
provide. The books of the Corporation may be kept (subject
to any provision of the Nevada Revised Statutes) outside
the State of Nevada at such place or places as may be
designated from time to time by the Board of Directors or
in the Bylaws.
FOURTEENTH: Private Property of Stockholders.
The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent
whatever and the stockholders shall not be personally
liable for the payment of the corporation's debts.
FIFTEENTH: Stockholder Appraisal Rights In Business
Combinations.
To the maximum extent permissible under the Nevada
Revised Statutes of the State of Nevada, the stockholders
of the Corporation shall be entitled to the statutory
appraisal rights provided therein, with respect to any
Business Combination involving the Corporation and any
stockholder (or any affiliate or associate of any
stockholder), which requires the affirmative vote of the
Corporation's stockholders.
SIXTEENTH: Other Amendments.
The Corporation reserves the right to adopt, repeal,
rescind, alter or amend in any respect any provision
contained in these Restated Articles of Incorporation in
the manner now or hereafter prescribed by applicable law
and all rights conferred on stockholders herein are granted
subject to this reservation.
SEVENTEENTH: Term of Existence.
The Corporation is to have perpetual existence.
EIGHTEENTH: Liability of Directors.
No director of this Corporation shall have personal
liability to the Corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a director
or officers Involving any act or omission of any such
director or officer. The foregoing provision shall not
eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good
faith or, which involve intentional misconduct or a knowing
violation of law, (iii) under applicable Sections of the
Nevada Revised Statutes. (iv) the payment of dividends in
violation of Section 78.300 of the Nevada Revised Statues
or, (v) for any transaction from which the director derived
an improper personal benefit. Any repeal or modification of
this Article by the stockholders of the Corporation shall
be prospective only and shall not adversely affect any
limitation an the personal liability of a director or
officer of the Corporation for acts or omissions prior to
such repeal or modification.
NINETEENTH: Name and Address of Incorporator.
The name and address of the incorporator of the
Corporation is: Tim P. Shissler, 3504 Willowdale Ave.,
Sparks, NV. 89413.
I, KENNY GREEN, President, Secretary and Treasurer of
Q-Com Corp., do hereby swear and affirm that the Restated
Articles of Incorporation as contained herein are true and
correct as adopted by a majority of shareholders On March
31, 1995. Dated this 7th day of April, 1995
BY:/s/ Kenny Green,
President, Secretary and
Treasurer
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
DRINK WORLD, INC.
On the 12th day of July 1995, pursuant to the Nevada Revised
Statutes 78.320 and other applicable Nevada Revised Statutes, a
Special Meeting of Shareholders representing a majority of the
holders was called. Whereas, there being 2,750,000 common shares
validly issued and outstanding and entitled to vote, shareholders
voted either by proxy or in person 1,782,000 shares FOR,
representing 64.8% being a majority and 0 shares AGAINST, to
AMEND THE ARTICLES OF INCORPORATION OF DRINK WORLD, INC.
Therefore, the Corporation does by these presents Amend its
Articles of Incorporation as follows:
The name of the corporation is changed to AIMRITE HOLDINGS
CORPORATION.
I, KENNY GREEN, President and Secretary of Drink World,
Inc., do hereby swear and affirm that the Certificate of
Amendment as contained herein is true and correct as adopted by a
majority of shareholders on July 12th, 1995. Dated this 20th day
of July 1995.
BY: /s/ Kenny Green
KENNY GREEN, PRESIDENT, SECRETARY
BYLAWS OF
Q-COM CORP.
Article 1.
Office
The Board of Directors; shall designate and the Corporation shall
maintain a principal office. The location of the principal office
may be changed by the Board of Directors. The Corporation also
may have offices in such other places ac the Board may from time
to time designate. The location of the Initial principal office
of the Corporation shall be designated by resolution.
Article II
Shareholders Meetings
1. Annual Meetings
The annual meeting of the shareholders of the Corporation shall
be held at such place within or without the State of Nevada as
shall be set forth in compliance with these Bylaws. The meeting
shall be hold on the third Tuesday of June of each year. If such
day is a legal holiday, the meeting shall be on the next
business. day. This meeting shall be for the election of
Directors and for the transaction of such other business as may
property come before it
2. Special Meetings
Special meetings of shareholders, other than those regulated by
statute, may be called by the President upon written request of
the holders of 60% or more of the outstanding shares entitled to
vote at such special meeting. Written notice of such meeting
stating the place, the date and hour of the meeting, the purpose
or purposes for which it is called, and the name of the person by
whom or at whose direction the meeting is called shall be given.
3. Notice of Shareholders, Meetings
The Secretary shall give written notice stating the place, day,
and hour of the meeting and In the case of a special meeting, the
purpose or purposes for which the meeting is called, which shall
be delivered not less than ten or more than fifty days before the
date of the meeting, either personally or by mail to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder
at his address as it appears on the books of the Corporation,
with postage thereon prepaid. Attendance at the meeting shall
constitute a waiver of notice thereof.
4. Place of Meeting
The Board of Directors may designate any place, either within or
without the State of Nevada, as the place of meeting for any
annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled
to vote at a meeting may designate any place, either within or
without the State of Nevada, as the place for the holding of such
meeting. If no designation is made, or if a special meeting is
otherwise called, the place of meeting shall be the principal
office of the Corporation.
5. Record Date
The Board of Directors may fix a date not less than ten nor more
than fifty days prior to any meeting as the record date for the
purpose of determining shareholders entitled to notice of and to
vote at such meetings of the shareholders, The transfer books may
be closed by the Board of Directors for a stated period not to
exceed fifty days for the purpose of determining shareholders
entitled to receive payment of any dividend, or in order to make
a determination of shareholders for any other purpose.
6. 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 shareholders. If less than a majority of
the outstanding shares are represented at a meeting a majority of
the shares so represented may adjourn the meeting from time to
time without further notice. At a meeting resumed after any such
adjournment 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,
7. Voting
A holder of an outstanding share, entitled to vote at a mooing,
may vote at such meeting in person or by proxy. Except as may
otherwise be provided in the currently filed Articles of
incorporation, every shareholder shall be entitled to one vote
for each share standing in his name on the record of
shareholders. Except as herein or in the currently filed Articles
of Incorporation otherwise provided, all corporate action shall
be determined by a majority of the vote's cast at a meeting of
shareholders by the holders of shares entitled to vote thereon.
8. Proxies
At all meetings of shareholders, a shareholder may vote In person
or by proxy executed in writing by the shareholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the
Secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.
9. Informal Action by Shareholders
Any action required to be taken at a meeting of the shareholders.
may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by a majority of the
shareholders entitled to vote with respect to the subject matter
thereof.
Article Ill.
Board Of Directors
1. General Powers
The business and affairs of the Corporation shall be managed by
its Board of Directors The Board of Directors may adopt such
rules and regulations for the conduct of their meetings and the
management of the Corporation as they appropriate under the
circumstances. The Board shall have authority to authorize
changes In the Corporation's capital structure.
2. Number, Tenure and Qualification
The number of Directors of the Corporation shall be a number
between one and nine, as the Directors may by resolution
determine from time to time. Each of the Directors shall hold
office until the next annual meeting of shareholders and until
his successor shall have been elected and qualified.
3. Regular Meetings
A regular meeting of the Board of Directors shall be held without
other notice than by this Bylaw, immediately after and, at the
same place as the annual meeting of shareholders. The Board of
Directors may provide,. by resolution, the time and place for the
holding of additional regular meetings without other notice than
this resolution.
4. Special Meetings
Special meetings of the Board of Directors may be called by order
of the Chairman of the Board or the President. The Secretary
shall give notice of the time, place and purpose or purposes of
each special meeting by mailing the same at least two days before
the meeting or by telephone, telegraphing or telecopying the same
at least one day before the meeting to each Director. Meeting of
the Board of Directors may be held by telephone conference call.
5. Quorum
A majority of the members of the Board of Directors shall
constitute a quorum for the transaction of business, but less
than a quorum may adjourn any meeting from time to time until a
quorum shall be present whereupon the meeting may be held, as.
adjourned. without further notice. At any meeting at which every
Director shall be present, even though without any formal notice,
any business may be transacted.
6. Manner of Acting
At all meetings of the Board of Directors, each Director shall
have one vote. The act of a majority of Directors present at a
meeting shall be the act of the full Board of Directors, provided
that a quorum is present.
7. Vacancies
A vacancy in the Board of Directors shall be deemed to exist In
the case of death, resignation. or removal of any Director, or if
the authorized number of Directors is increased, or if the
shareholders fail, at any meeting of the shareholders, at which
any Director is to be elected, to elect the full authorized
number of Director to be elected at that meeting.
8. Removals
Directors may be removed, at any lime, by a vote of the
shareholders holding a majority of the shares outstanding and
entitled in vote. Such vacancy shall be filled by the Directors
then in office. though less than a quorum, to hold office until
the next annual meeting or until his successor is duly elected
and qualified, except that any directorship to be filled by
election by the shareholders at the meeting at which the Director
is removed, No reduction of the authorized number of Directors
shall have the effect of removing any Director prior to the
expiration of his term of office.
9. Resignation
A Director may resign at any time by delivering written.
notification thereof to the President or Secretary of the
Corporation. A resignation shall become effective upon its
acceptance by the Board of Directors; provided, however. that if
the Board of Directors has not acted thereon within ten days from
the date of its delivery, the resignation shall be deemed
accepted.
10. Presumption of Assent
A Director of the Corporation who is present at a meeting of The
Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action(s) taken
unless his dissent shall be placed in the minutes of the meeting
or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the
adjournment thereof or shall toward such dissent by registered
mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply
to a Director who voted in favor of such action.
11. Compensation
By resolution of the Board of Directors, the Directors may be
paid their expenses, if any, of attendance at each meeting of the
Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the Corporation
in any other capacity and receiving compensation therefor.
12. Emergency Power
When, due to a national disaster or death, a majority of the
Directors are incapacitated or otherwise unable to attend the
meetings and function as Directors, the remaining members of the
Board of Directors shall have all the powers necessary to
function as a complete Board, and for the purpose of doing
business and filling vacancies shall constitute a quorum, until
such time as all Directors can attend or vacancies can be filled
pursuant to these Bylaws.
13. Chairman
The Board of Directors may elect from its own number a Chairman
of the Board, who shall preside at all meetings of the Board of
Directors, and shall perform such other duties as may be
prescribed from time to time by the Board of Directors, The
Chairman may by appointment fill any vacancies on the Board of
Directors.
Article IV.
Officers
1. Number
The Officers of the Corporation shall be a President, one or more
Vice Presidents, and a Secretary Treasurer, each of whom shall be
elected by a majority of the Board of Directors. Such other
Officers and assistant Officers as may be deemed necessary may be
elected or appointed by the Board of Directors. In its
discretion, the Board of Directors, may leave unfilled for any
such period as it may determine any office except those of
President and Secretary, Any two or more offices may be held by
the same person. Officers may or may not be Directors or
shareholders of the Corporation.
2. Election and Term of Office
The Officers of the Corporation to be elected by the Board of
Directors shall be elected annually by the Board of Directors at
the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of Officers
shall not be held at such meeting, such election shall be held as
soon thereafter as convenient. Each Officer shall hold office
until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided.
3. Resignations
Any Officer may resign at any time by delivering a written
resignation either to the President or to the Secretary. Unless
otherwise specified therein, such resignation shall take effect
upon delivery.
4. Removal
Any Officer or agent may be removed by the Board of Directors
whenever in its judgment the best interests of the Corporation
will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so
removed. Election or appointment of an Officer or agent shall not
of itself create contract rights Any such removal shall require a
majority vote of the Board of Directors, exclusive of the Officer
in question if he is also a Director.
5. Vacancies
A vacancy in any office because of death. resignation, removal,
disqualification or otherwise, or if a new office shall be
created, may be filled by the Board of Directors for the
unexpired portion of the term.
6. President
The President shall be the chief executive and administrative
Officer of the Corporation. He shall preside at all meetings of
the stockholders and, in the absence of the Chairman of the
Board, at meetings of the Board of Directors. He shall exercise
such duties as customarily pertain to the office of President and
shall have general and active supervision over the property,
business, and affairs of the Corporation and over its several
Officers, agents, or employees other than those appointed by the
Board of Directors, He may sign. execute and deliver in the name
of the Corporation powers of attorney, contracts, bonds and other
obligations, and shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the
Bylaws-
7. Vice President
The Vice President shall have such powers and perform such duties
as may be assigned to him by the Board of Directors or the
President, In the absence or disability of the President, the
Vice President designated by the Board or the President shall
perform the duties and exercise the powers of the President. A
Vice President may sign and execute contracts and other
obligations pertaining to the regular course of his duties,
8. Secretary
The Secretary shall keep the minutes of all meetings of the
stockholders and of the Board of Directors and to the extent
ordered by the Board of Directors or the President, the minutes
of meetings of all committees. He shall cause notice to be given
of meetings of stockholders, of the Board of Directors, and of
any committee appointed by the Board. He shall have custody of
the corporate seal and general charge of the records, documents
and papers of the Corporation not pertaining to the performance
of the duties vested in other Officers, which shall at all
reasonable times be open to the examination of any Directors. He
may sign or execute contracts with the President or a Vice
President thereunto authorized In the name of the Corporation and
affix the seal of the Corporation thereto He shall perform such
other duties as may be prescribed from time to time by the Board
of Directors or by the Bylaws.
9. Treasurer
The Treasurer shall have general custody of the collection and
disbursement of funds of the Corporation. He shall endorse on
behalf of the Corporation for collection checks, notes and other
obligations, and shall deposit the same to the credit of the
Corporation in such bank or banks or depositories as the Board of
Directors may designate. He may sign, with the President or such
other persons as may be designated for the purpose of the Board
of Directors, all bills of exchange or promissory notes of the
Corporation. He shall enter or cause to be entered regularly in
the books of the Corporation full and accurate account of all
monies received and paid by him on account of the Corporation;
shall at all reasonable times exhibit his books and accounts to
any Director of the Corporation upon application at the office of
the Corporation during business hours; and, whenever required by
the Board of Directors or the President, shall render a statement
of his accounts He shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the
Bylaws.
10. Other Officers
Other Officers shall perform such duties and shall have such
powers as may be assigned to them by the Board of Directors.
11. Salaries
The salaries or other compensation of the Officers of the
Corporation shall be fixed from time to time by the Board of
Directors. except that the Board of Directors may delegate to any
person or group of persons. the power to fix the salaries or
other compensation of any subordinate Officers or agents No
Officer shall be prevented from receiving any such salary or
compensation by reason of the fact that he is also a Director of
the Corporation.
12. Surety Bonds
In case the Board of Directors shall so require, any Officer or
agent of the Corporation shall execute to the Corporation a bond
in such sums and with such surely or sureties, as the Board of
Directors may direct, conditioned upon the faithful performance
of his duties to the Corporation, including responsibility for
negligence and for the accounting for all property, monies or
securities of the Corporation, which may come into his hands.
Article V.
Contracts, Loans. Checks And Deposits
1. Contracts
The Board of Directors may authorize any Officer or Officers,
agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the
Corporation and such authority may be general or confined to
specific instances.
2. Loans
No loan or advance shall be contracted on behalf of the
Corporation, no negotiable paper or other evidence of its
obligation under any loan or advance shall be issued in its name,
and no property of the Corporation shall be mortgaged, pledged,
hypothecated or transferred as security for the payment of any
loan, advance, indebtedness or liability of the Corporation
unless and except as authorized by the Board of Directors. Any
:such authorization may be general or confined to specific
instances.
3. Deposits
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation in
such banks, trust companies, or other depositories as. the Board
of Directors may select, or as may be selected by an Officer or
agent of the Corporation authorized to do so by the Board of
Directors.
4. Checks and Drafts
All notes, drafts, acceptances, checks, endorsements and evidence
of indebtedness of the Corporation shall be signed by such
Officer or Officers or such agent or agents of the Corporation
and in such manner as the Board of Directors from time to time
may determine. Endorsements for deposits to the credit of the
Corporation in any of its duly authorized depositories shall be
made in such manner as the Board of Directors may from time to
time determine.
5. Bonds and Debentures
Every bond or debenture issued by the Corporation shall be in the
form of an appropriate legal writing, which shall be signed by
the President or Vice President and by the Treasurer or by the
Secretary, and sealed with the seal of ft Corporation. The seal
may be facsimile, engraved or printed. Where such bond or
debenture is authenticated with the manual signature of an
authorized officer of the Corporation or other trustee designated
by the indenture of trust or other agreement under which such
security Is Issued, the signature of any of the Corporation's
Officers named thereon may be facsimile. In case any Officer who
signed, or whose facsimile signature has been used on any such
bond or debenture, shall cease to be an Officer of the
Corporation for any reason before the same has been delivered by
the Corporation, such bond o debenture may nevertheless be
adopted by the Corporation and issued and delivered as though the
person who signed it or whose facsimile signature has been used
thereon had not ceased to be such Officer.
Article VI
Capital Stock
1. Certificate of Share
The shares of the Corporation shall be represented by
certificates prepared by the Board of Directors and signed by the
President. The signatures of such Officers upon a certificate may
be facsimiles if the certificate is countersigned by a transfer
agent or registered by a registrar other than the Corporation
itself or one of its employees. All certificates for shares shall
be consecutively numbered or otherwise identified, The name and
address of the person to whom the shares represented thereby are
issued, with the number of shares and date of Issue, shall be
entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be
canceled except that in case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may
prescribe.
2. Transfer of Shares
Transfer of shares of the Corporation shall be made only on the
stock transfer books of the Corporation by the holder of record
thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the
Secretary of the Corporation, and on surrender for cancellation
of the certificate for such shares. The person in whose name
shares stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes,
3. Transfer Agent and Registrar
The Board of Directors of shall have the power to appoint one or
more transfer agents and registrars. for the transfer and
registration of certificates of stock of any class, and may
require that stock certificates shall be countersigned and
registered by one or more of such transfer agents and registrars,
4. Lost or Destroyed Certificates
The Corporation may issue a new certificate to replace any
certificate theretofore issued by it alleged to have been lost or
destroyed. The Board of Directors may require the owner of such a
certificate or his legal representative to give the Corporation a
bond in such sum and with such sureties as the Board of Directors
may direct to indemnity the Corporation as transfer agents and
registrars, if any, against claims. that may be made on account
of the issuance of such now certificates. A new certificate may
be issued without requiring any bond.
5. Consideration for Shares
The capital stock of the Corporation shall be Issued for such
Consideration as shall be fixed from time to time by the Board of
Directors. In the absence of fraud, the determination of the
Board of Directors as to the value of any property or services
received in full or partial payment at shares shall be
conclusive.
6. Registered Shareholders.
The Corporation shall he entitled to treat the holder of record
of any share or shares of stock as the holder thereof, In fact,
and shall not be bound to recognize any equitable or other claim
to or on behalf of this Corporation to any and all of the rights
and powers incident to the ownership of such stock at any such
meeting and shall have power and authority to execute and deliver
proxies and consents on behalf of this Corporation in connection
with the exercise by this Corporation of the rights and powers
incident to the ownership of such stock. The Board of Directors,
from time to time. may confer like powers upon any other person
or persons,
Article VII
Indemnification
No Officer or Director shall be personally liable for any
obligations of the Corporation or for any duties or obligations
arising out of any acts or conduct of said Officer or Director
performed for or on behalf of the Corporation. The Corporation
shall and does hereby indemnify and hold harmless each person and
his heirs and administrators who shall serve at any time
hereafter as a Director or Officer of the Corporation from and
against any and all claims, judgments and liabilities to which
such persons shall become subject by reason of his having
heretofore or hereafter been a Director or Officer of the
Corporation, or by reason of any action alleged to have
heretofore or hereafter taken or omitted to have been taken by
him as such Director or Officer, and shall reimburse each such
person for all legal and other expenses reasonably incurred by
him in connection with any such claim or liability, including
power to defend such persons from all suits or claims as provided
for under the provisions of the Nevada Corporate statutes:
provided, however, that no such persons shall be indemnified
against, or be reimbursed for, any expense incurred in connection
with any claim or liability arising out of his own negligence or
willful misconduct The rights accruing to any person under the
foregoing provisions of this section shall not exclude any other
right to which he may lawfully be entitled, nor shall anything
herein contained restrict the right of the Corporation to
indemnify or reimburse such person in any proper case even though
not specifically herein provided for. The Corporation, its
Directors. Officers, employees and agents shall be fully
protected in taking any action or making any payment. or In
refusing so to do in reliance upon the advice of counsel.
Article VIII.
Notice
Whenever any notice is required to be given to any shareholder or
Director of the Corporation under the provisions of the Articles
of Incorporation, or under the provisions of the Nevada Corporate
statutes, 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. Attendance at any meeting shall constitute a waiver of
notice of such meetings, except where attendance is for Me
express purpose of objecting to the holding of that meeting.
Article IX.
Amendments
These Bylaws may be altered, amended, repealed. or new Bylaws
adopted by a majority of the entire Board of Directors at any
regular or special meeting. Any Bylaw adopted by the Board may be
repealed or changed by the action of the shareholders.
Article X.
Fiscal Year
The fiscal year of the Corporation shall be fixed and may be
varied by resolution of the Board of Directors.
Article XI.
Dividends
The Board of Directors may at any regular or special meeting, as
they deem advisable, declare dividends payable out of the surplus
of the Corporation.
Article XII.
Corporate Seal
The seal of the Corporation shall be in the form of a circle and
shall bear the name of the Corporation and the year of
incorporation per sample affixed hereto.
Date: September 14, 1988
/s/ Lawrence E. Materanek II
Lawrence E. Materanek II, Secretary
INTERNATIONAL LICENSING AND CONSULTING AGREEMENT
This International Licensing Agreement (hereinafter called
"Agreement') is entered into and made as of the date last written
herein between KENMAR Company Trust (hereinafter called "KENMAR")
and AimRite Holdings Corporation (hereinafter called "AimRite
Holdings") and also hereinafter individually referred to as
"party" or "Party" or collectively referred to as the parties" or
"Parties" is made with reference to the following facts:
WHEREAS both KENMAR and AimRite Holdings believe that their
combined efforts in the development, production and sale of a
Computer Optimized Adaptive Suspension Technology including the
Setflex Air Suspension System based on certain proprietary
information, suspension technology, confidential information,
trade secrets, documentation, copyrights, trademarks, tradenames,
documentation, patents and pending patents held by KENMAR would
be in the best interests of both Parties; and
WHEREAS AimRite Holdings is desirous of utilizing the
services of certain consultants who are under contract to KENMAR
in order to assist it in the fulfillment of its obligations under
this agreement.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Definitions
a. The Suspension Technology The term "The Suspension
Technology" as used herein shall mean the hardware designs,
control algorithms, proprietary information, inventions
(patentable or unpatentable), ideas, methods, data, trade
secrets, confidential information, copyrights, trademarks,
tradenames, patents and patents pending owned by or which are or
hereafter owned, developed or obtained by KENMAR and/or its
consultants relating to the following patents: #4,722,548,
#4,634,142, #4,651,838, #4,677,263 #5,529,152 and any subsequent
patents or patents pending derived therefrom.
b. Customer The term "customer" shall mean those third parties,
whether individual, corporate or otherwise that purchase any
product manufactured by AimRite Holdings using the technology
either directly, through an OEM Agreement or sublicense.
c. Price. The term " Price" shall mean the price charged by
AimRite Holdings for the products manufactured or caused to be
manufactured, distributed or sold by it using the technology
under this agreement, sublicense or any O.E.M. agreement.
d. Sale. The term "sale" as used herein shall mean any contract
or agreement, written, electronic or oral by which a customer
obtains the possession or use of a product manufactured by
AimRite Holdings using the suspension technology licensed herein.
This term shall include any payments received by AimRite on
account of any O.E.M. agreements and/or sublicenses:
e. Original Equipment Manufacturer's Agreements. The term
"Original Equipment Manufacturer's Agreements" or O.E.M.
Agreements means those agreements entered into from time to time
by AimRite Holdings which allow AimRite Holdings to offer the
products using the technology for manufacture, distribution and
sale to customers as part of a package at a price which is
competitive to that offered through AimRite Holdings' own
distribution network.
f. Trademark. The term "trademark" shall mean the acronym
"COAST" the words "SETFLEX" , Setflex Air Suspension and any and
all symbols, stylized logos, trademarks, trade names, slogans or
service marks whether or not copyrighted, service marked or
trademarked, of any kind associated with the suspension
technology, including but not limited to the term "Computer
Optimized Adaptive Suspension Technology" from which the acronym
is derived and any and all other such trademarks, as defined
herein, which are developed by KENMAR and/or its consultants.
g. Confidential Information. The term "confidential
information" shall mean all information obtained by or provided
to AimRite Holdings by KENMAR and/ or its consultants during the
course of this agreement with relation to the development and
sale of the suspension technology.
2. Grant of License
a. KENMAR hereby appoints AimRite Holdings as its non-exclusive
master licensee for the manufacture, sales and distribution of
products derived from the suspension technology for the entire
world subject to its faithful performance of the terms of this
agreement. AimRite Holdings understands and agrees that no
exclusive license is created or intended by this agreement and
that KENMAR has the right to engage in similar agreements with
other master licensees for the same geographical area which may
be contemplated by the parties to this agreement as well as make
direct sales of products derived from the suspension technology.
b. Original Equipment Manufacturers Agreements and Sublicenses.
AimRite Holdings is authorized to enter into O.E.M. Agreements
and sublicenses with customers, if necessary to facilitate the
performance of its duties under this agreement. Such sublicenses,
shall be subject to the approval of KENMAR.
c. Use of Name During the term of this agreement, AimRite
Holdings shall be authorized to use the trademarks, as defined in
this agreement in its advertising and sales material subject to
the approval of KENMAR. The parties agree that KENMAR owns all
the rights to the trademarks and any derivatives thereof
throughout the world..
d. Direct Sales by KENMAR. KENMAR retains the right to make
direct sales to customers, including multi-national corporations,
governmental agencies and governments whom it has directly
contacted at such prices and under such circumstances as it, in
its sole discretion, shall deem to be in the best interests of
KENMAR.
3. Payment
a. Payment Amount. For the grant of the licensing rights herein
AimRite Holdings shall transfer to KENMAR within 10 days of the
signing of this agreement one million seven hundred thousand
(1,700,000) shares of stock in AimRite Systems International and
two million (2,000,000) shares of stock in AimRite Holdings. As
and for further consideration for the grant of the license
herein, for each sale as defined in Paragraph I (d) herein,
KENMAR shall be entitled to receive eight percent (8%) of the
AimRite Holdings price as defined in Paragraph I (c).
b. Sales Tax AimRite Holdings shall be responsible for the
collection and payment of any applicable sales tax.
c. Remittance of funds All payments received from the sales
shall be remitted to KENMAR or the assignees named in Paragraph
3(g) hereof within 30 days of the receipt of funds from the
customer by AimRite Holdings. This right to payment shall survive
the termination of this agreement.
d. Payment for Underpayment Any payment found to be due to
KENMAR and/or the assignees named in Paragraph 3(g) hereof
pursuant to any review or audit conducted pursuant to Paragraphs
4 (d) shall be paid immediately by AimRite Holdings plus ten per
cent (10%) per annum from the date such payment was due.
e. No Offsets All sums payable by one party to the other or the
assignees named in Paragraph 3(g) under the terms of this
agreement shall be paid without offsets, setoff; or adjustments
of any kind.
f. Past Due Payments Any past due payments owing from one party
to the other or the assignees named in Paragraph 3(g) hereof
shall accrue interest at the rate of ten percent per annum until
paid.
g. Assignment KENMAR hereby irrevocably assigns two percent
(2%) of the total payments due to it under Paragraph 3 (a) hereof
to James Hamilton. KENMAR further hereby irrevocably assigns two
percent (2%) of the total payments due to it under Paragraph 3(a)
hereof to Lonnie Woods. It is the intent of this paragraph that
the payments due to James Hamilton and Lonnie Woods pursuant to
this assignment shall be calculated in the same manner as the
payments due KENMAR under Paragraph 3 (a) and thereafter applied
as a reduction of the amount due KENMAR by AimRite Holdings so
that the amounts due James Hamilton and Lonnie Woods are based on
the term "sale" as defined in Paragraph l(d). It is the intent of
this calculation that KENMAR receive a net of four percent (4%)
and James Hamilton and Lonnie Woods two percent (2%) each out of
the total of the eight percent (8%) called for in Paragraph 3(a).
h. Consultants AimRite Holdings shall pay to KENMAR a monthly
consulting fee plus costs for the use of consulting services of
Lonnie Woods and James Hamilton or for such other or additional
consultants as KENMAR shall, in its sole and absolute discretion,
deem necessary and appropriate to assist AimRite Holdings in the
fulfillment of its obligations under Paragraph 4 hereof as set
forth in paragraph 5 hereof. AimRite Holdings agrees to pay for
such costs and services as billed for by KENMAR.
4. Obligations of AimRite Holdings
a. Manufacturing, Distributing and Sales. AimRite Holdings
shall diligently work to develop, manufacture, distribute and
sell products based the technology.
b. Distributorships and Manufacturing Sublicenses. AimRite
Holdings shall exercise its best efforts, if it deems necessary
and appropriate, to seek and obtain agreements, including
sublicenses, for the manufacture, distribution and sale of
products based on the technology. Such agreements are subject to
the review and approval of KENMAR.
c. Authority AimRite shall have no right, power or authority to
bind KENMAR to any agreement without the written consent of and
acceptance by KENMAR.
d. Supervision and Marketing. AimRite Holdings shall diligently
supervise and monitor the performance of all sublicensees and
distributors who are parties to agreements obtained by it for the
manufacture and/or distribution of products based on the
suspension technology. Other duties shall include, but not be
limited, to:
(i) Providing regular updates to KENMAR of the significant sales
and accomplishments of AimRite Holdings with reference to the
development, manufacturing and sales of the suspension
technology.
(ii) Receiving and responding to all support related questions
regarding the suspension technology from customers.
e. Records. Maintain full, clear and accurate records with
respect to all sales and make such records available at AimRite
Holdings' cost to KENMAR and/or those parties to whom KENMAR has
assigned part of the royalty payable hereunder pursuant to
Paragraph 3(g), upon reasonable request but not later than one
week after such request, at the offices of KENMAR. AimRite
Holdings further agrees to allow such auditors and accountants as
may be employed by KENMAR and/or those parties to whom KENMAR has
assigned part of the royalty payable hereunder pursuant to
Paragraph 3(g) access to its books and records relating to sales
as defined in this Agreement. If the amount found due and owing
to KENMAR under this Agreement is more than 25% of the actual
amount paid, then AimRite Holdings shall pay KENMAR's actual
costs in performing the review of the records, including but not
limited to, such professional fees and costs as are incurred by
KENMAR..
f. Reports AimRite Holdings shall provide a quarterly marketing
report for KENMAR describing AimRite Holdings' activities during
the prior period with reference to the fulfillment of its
obligations under this agreement.
g. Payment to Assignees AimRite Holdings shall pay the sums
which have been assigned to Lonnie Woods and James Hamilton
pursuant to Paragraph 3(g ) of this agreement directly to those
individuals named therein and provide a report thereof to KENMAR.
It is specifically agreed that James Hamilton and Lonnie Woods
are intended third-party beneficiaries of this agreement to the
extent of the assignments set forth in Paragraph 3(g) and, to
that extent, may enforce those rights directly against AimRite
Holdings.
h. No Modification or Reverse Engineering. AimRite Holdings
will not modify, reverse engineer, decompile or enhance the
software associated with the suspension technology without
KENMAR's prior written consent. KENMAR shall own all proprietary
rights in any such modifications or enhancements and AimRite
Holdings hereby transfers and assigns all proprietary rights,
including patent, copyright and trade secret rights to any such
modifications or enhancements to KENMAR.
i. Copyright and Patent Notice AimRite Holdings agrees to place
a copyright, trademark and patent notices identifying KENMAR as
the copyright, trademark and/or patent owner on such copies of
the suspension technology where such notice does not already
appear. Such notices shall also appear in any of AimRite
Holdings' advertisements and promotional material.
5. Obligations of KENNLAR
a. Consulting Services KENMAR shall provide the services of
such consultants as agreed upon herein to assist AimRite Holdings
in the fulfillment of its obligations under Paragraph 4 hereof
and as follows. The payment for such consultants is set forth in
Paragraph 3(h). KENMAR will, at the request of AimRite Holdings,
provide its consultants to reasonably personally assist in the
closing of major potential sales by distributors. Reasonable
personal assistance shall include reasonable telephonic support
from the United States. In the event KENMAR shall send a
consultant traveling for the purpose of assistance to AimRite
Holdings under the terms of this agreement AimRite Holdings shall
provide transportation, meals and lodging for the consultant. All
transportation costs shall be paid by AimRite Holdings in
advance.
b. Right of First Refusal In the event that KENMAR or its
consultants shall develop new or additional technology based on
or related to the suspension technology licensed herein, KENMAR
shall first offer such new or additional technology to AimRite
Holdings under the same terms and conditions of this agreement so
long as AimRite is, in the sole and absolute opinion of KENMAR,
in compliance with the terms of this agreement.
6. Non-Circumvention
Both Parties agree that, during the term of this agreement
and thereafter, that neither party will, either directly or
indirectly, entertain, engage or participate in any activity
designed to circumvent the terms of this agreement or the rights
accruing to the parties after termination of this agreement by
engaging in dealings or conduct the object of which would be to
deprive either party of their expectations under this Agreement.
Neither party shall directly or indirectly, entertain, engage or
participate in any attempt by any heir, successors, assign of
any' entity to circumvent this agreement nor shall any party to
this Agreement engage in the dealings prohibited by this
paragraph with any entity known or suspected by either party to
have been established for the purpose of circumventing the
Agreement. This Paragraph shall not apply if KENMAR exercises its
rights under Paragraphs 2(a) and 2(d) if this agreement.
7. Termination
a. In General. This agreement is deemed to have commenced on
the date this agreement is signed and shall remain in effect
thereafter for twenty years from the date of the first sale of
the suspension technology or the term of the last to expire of
any patents or pending patent rights licensed to AimRite Holdings
under this agreement or pursuant to the exercise of any right of
first refusal provided for this agreement, whichever is longer.
Either party may terminate this agreement within thirty (30) days
prior written notice based on any of the following:
(i) The other party's failure to comply with any term or
obligation set forth in this agreement within thirty (30) days
after written notification of such failure.
(ii) Mutual agreement of the parties.
b. Rights and Duties Upon Termination. In the event of
termination of this agreement both parties and the assignees
named in Paragraph 3(g) shall have the rights and obligations set
forth in Paragraphs 2 and 3 of this Agreement until such time as
the last unit of the suspension technology licensed hereunder is
sold by either AimRite Holdings directly, under any O.E.M.
agreement or a sublicense. Payments to KENMAR for the services of
consultants pursuant to Paragraph 3(h) shall be immediately due
and payable. AimRite Holdings shall immediately return all
confidential information to KENMAR. The provisions of Paragraph
4(h) shall also survive the termination of this agreement.
8. Relationship of the Parties
Neither AimRite Holdings nor KENMAR (including its
consultants) are authorized to obligate the other party other
than as stated in this Agreement. This Agreement does not create
a joint venture, partnership or association. The relationship of
the parties shall be as principal to principal. AimRite Holdings
shall not obtain or claim any right, title or interest in any
work product, patent, pending patent, writings, ideas or concepts
either written, electronic or oral from any consultant
contractually obligated to KENMAR who services are provided to
AimRite Holdings under this agreement and specifically
acknowledges that all such work product, patent, pending patent,
writings, ideas or concepts either written, electronic or oral
are the exclusive property of KENMAR.
9. Indemnification
a. By KENM4R . KENMAR shall indemnify and hold harmless AimRite
Holdings against any and all liability, suits, claims. losses,
damages and judgments, and shall pay all costs (including
reasonable attorneys fees) and damages to the extent that such
liability, costs or damages arise from a claim that the
suspension technology infringes on any third party's United
States patent or copyright. KENMAR may, at its option, defend or
settle such action, or any part thereof brought against AimRite
Holdings arising from a claim that such infringement, as
described herein, has occurred. KENMAR's obligations under this
section are conditioned on being given (i) Prompt notice in
writing of such claim by AimRite Holdings and (ii) the right to
control and direct the investigation, defense and settlement of
each such claim. The provisions of this section shall survive any
termination of this agreement
b. By AimRite Holdings. AimRite Holdings shall indemnify and
hold harmless KENMAR against any and all liability, suits,
claims. losses, damages and judgments, and shall pay all costs
(including reasonable attorneys fees) and damages to the extent
that such liability, costs or damages arise from a claim that the
suspension technology was the proximate result of any non-patent
infringement damages by any third party. AimRite Holdings may, at
its option, defend or settle such action, or any part thereof
brought against KENMAR arising from that a claim for damages, as
described herein, has occurred. AimRite Holdings' obligations
under this section are conditioned on being given (i) Prompt
notice in writing of such claim by KENMAR and (ii) the right to
control and direct the investigation, defense and settlement of
each such claim. The provisions of this section shall survive any
termination of this agreement.
10. General Provisions
a. Assignment. Neither KENMAR nor AimRite Holdings Owner will
assign any of the rights or obligations under this agreement
without the prior written consent of the other party.
b. Notices All notices under this agreement to be sent by
certified mail, return receipt requested, to the address below or
to any other address to which the parties may, from time top
time, designate:
KENMAR:
AimRite Holdings:
c. Integration and Amendment This written Agreement sets forth
the entire understanding of the parties with respect to the
subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations with respect to the
subject matter hereof. Neither party to this Agreement (nor its
officers, agents, employees, representatives or attorneys of or
for any party) has made any statement or representation to any
other party regarding any fact relied upon in this Agreement, and
each party does not rely on any statement, representation or
promise of any other party (or any officer, agent employee,
representative or attorney for the other party) in executing this
Agreement except as expressly stated in this Agreement. Any
amendments to this Agreement must be in writing and signed by
both parties.
d. Investigation Each party to this Agreement has made such
investigation of the facts pertaining to this Agreement and all
the matters pertaining thereto as it deems necessary.
e. Review and Ratification Each party or responsible officer
thereof has read this Agreement, including each and every
provision thereof, and understands the contents thereof Each
party represents that the shareholders of each party has
consented either in writing or at a meeting of shareholders duly
held, to the transactions contemplated hereby.
f. Construction Each party has cooperated in the drafting and
preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not be construed against
any party.
g. Terms Each term of this Agreement is contractual and not
merely a recital.
h. Legal Advice Each Party has received independent legal
advice from its respective attorneys with regard to the making of
this Agreement and each and every term hereof
i. Consideration Both parties acknowledge that they have
received equal, valuable and legally sufficient consideration in
return for the obligations and benefits given under this
Agreement.
j. Governing Law This Agreement shall be deemed to have been
executed and delivered in the State of Nevada and shall be
governed by and interpreted with the Laws of the State of Nevada
except those laws relating to choice of law. The parties hereby
agree that any dispute regarding the interpretation or validity
of this Agreement will be subject to the exclusive jurisdiction
of the Nevada State Courts in and for Clark County, Nevada and to
the personal and exclusive jurisdiction and venue of this court.
The parties agree that the prevailing side in any such dispute
shall be entitled to reasonable attorney's fees in enforcing this
Agreement.
k. Waiver. Failure by either party to enforce, at any time or
for any period of time any of the provisions of this agreement
shall not be construed as a waiver of such provisions and shall
in no way effect a party's right to later enforce such
provisions.
l. Severability. If any part of this Agreement is determined by
any court or tribunal of competent jurisdiction to be wholly or
partially unenforceable for any reason, such unenforceability
shall not affect any other part of this agreement.
m. Remedies. All rights conferred under this Agreement or by
any other instrument or law shall be cumulative and may be
exercised singularly or concurrently. Each party agree that any
breach of this agreement would cause irreparable damage to the
other parties to this agreement and that, in the event of such
breach, the remaining party to this agreement shall have, in
addition to any and all remedies at law, the right to an
injunction, specific performance or such other equitable relief
to prevent the violation of such party's obligations under this
agreement.
n. Good Faith and Fair Dealing All implied in law covenants of
Good Faith and Fair dealing shall be incorporated by this
reference into this agreement.
o. Future Benefits This Agreement is binding upon and shall
inure to the benefit of the parties, their heirs and successors
in interest whether individual, or corporate.
p. Time. Time is of the essence in this agreement.
q. Execution by Facsimile This Agreement may be executed in
counterparts and by facsimile signature. When each party has
signed and delivered at least one such counterpart, each
counterpart shall be deemed an original and, when taken together
with other signed counterparts, shall constitute one agreement
which shall be binding on all parties. No counterpart shall be
effective until all of the parties here have executed and
exchanged an executed counterpart hereof
AGREED:
KENMAR COMPANY TRUST AIMRITE HOLDINGS
CORPORATION
Dated: Feb 25, 1997 Dated: Feb 25, 1997
By: By:
/s/ Kenneth P. Coleman (T) /s/ Kenneth P.
Coleman
Trustee President
March 5, 1998
Jim Hamilton
Aimrite Holdings Corporation
225 Stevens Avenue, Suite 104
Solana Beach, CA 92075
RE: COAST DEVELOPMENT QUOTATION
Dear Jim:
Enclosed is a quotation for the development of the Computer
Optimized Adaptive Suspension Technology Suspension Control
Subsystem (COAST) which Logic Innovations, Inc. (LII) will
develop for AimRite Holdings Corporation.
The COAST will be according to the features and specifications
specified in the following documents:
Computer Optimized Adaptive Suspension Technology (COAST)
Statement of Work, AimRite Holdings Corporation Revision B,
February 26, 1998.
Computer Optimized Adaptive Suspension Technology (COAST),
Airspring Microprocessor Control Subsystem, COAST II
Specification, Kenmar Company Trust, Revision - December 22,
1997.
Computer Optimized Adaptive Suspension Technology (COAST),
Microprocessor Control Subsystem, Specification, Kenmar Company
Trust, Revision D, January 4, 1997.
This quotation includes the detailed specifications, design,
fabrication, test and documentation of the COAST product. This
quotation will detail the basic features, deliverables, schedule
and fees for the COAST project.
This quotation assumes a COAST product as specified herein. This
quotation is subject to change based upon a substantial change to
the COAST features or deliverables described herein.
This effort has been quoted on a time and materials basis.
This quotation contains information proprietary to Logic
Innovation, Inc. (LII). It has been provided to AimRite for the
evaluation of LII as a supplier for the COAST project. This
document and its contents are not to be distributed outside of
AimRite for any reason.
DELIVERABLES
LII will specify, design, fabricate and test the COAST product
according to the terms of this agreement. All COAST deliverable
documentation will be presented in a project notebook. Final
documentation will be delivered in hardcopy and on electronic
media in Microsoft Word 6.0.
DOCUMENTATION
1. COAST Specification. This document will be a detailed low
level description of the COAST product's hardware and software
features, architecture, a block diagram, estimated PCB area
estimated costs, and proposed implementation.
2. Hardware and Software Theories of Operation. This document
will include a detailed description of the design operation,
configuration information, logic operation, etc. for all hardware
and software developed. Both text and diagrams will be provided
for this deliverable.
HARDWARE
3. PCB schematic designs provided In OrCAD schematic form. The
B size drawings will include functional notes and labeling of off
page connections.
4. Detailed System Block Diagram.
5. Bill of Material (BOM) including full manufacturer part
number.
6. State Diagrams for all state machines.
7. Timing Diagrams. Timing Diagrams will be provided as
required to verify the COAST design.
8. Worst case AC and DC loading analyses and power consumption
calculations.
9. Tabulations of timing requirements (worst case) for the
COAST product.
10. CAD Placement Diagram (for AimRite approval before layout).
11. Parts Procurement. LII will procure all components for two
COAST assemblies. This effort is for the prototype (first two
units) pass only.
12. PCB CAD Layout. LII will perform the PCB CAD layout on the
PADs PCB system. LII will deliver a full archive database of the
CAD layout as well, as an assembly drawing and drill drawing.
This effort is for the prototype (first) pass only.
13. PCB Fabrication and Assembly. LII will fabricate and
assemble two sets of prototype COAST PCBs. This effort is for the
prototype (first two units) pass only.
14. Design Reviews: LII will provide an internal design review,
as will as a design with AimRite at each major milestone.
15. Product Debug: LII will test the prototype hardware at LII
facilities. Debug completion will be determined by the successful
testing of the COAST by the AimRite approved acceptance test
environment.
16. Integration and Test: LII will integrate and test the COAST
product with the AimRite provided Rolling chassis (Probably a
Suburban).
17. Design Corrections: As a result of the debug process, LII
will provide AimRite with an updated schematic which reflects all
problems found during debug of the prototypes. IN addition, a
detailed list of etch cuts, drills and wire adds needed to make
the product fully functional will also be provided.
18. Warranty: LII will diagnose and repair circuit problems
caused by LII for up to three months (90 days) after debug is
complete. After this time, we will be happy to perform these
services at our hourly rate.
19. Design Reviews: LII will provide an internal design review,
as well as a design reviews with AimRite at each major milestone.
The latter review is to analyze the COAST module's features,
implementation, timing and circuitry.
20. SOFTWARE
All LII generated software will be provided in both `C', `C++'
source and binary code forms. The following will be provided.
21. Diagnostics. LII will provide rudimentary diagnostics to
perform a power on and under command diagnostic test of the COAST
system.
22. Application software. LII will provide any operating system
porting (if required) and all application software required to
perform the functionality and algorithms specified in the
statement of work and reference documents.
DEVELOPMENT TOOLS
23. LII plans to use OrCAD for the PCB schematic design, VHDL
for FPGA design (if required), Model Technology for VHDL
simulation, Exemplar Logic retargeting software to convert the
VHDL FPGA design into the appropriate netlist format, NeoCAD
tools for the FPGA layout and routing, PADs-PCB for PCB layout,
Timing Designer by Chronology for the timing analysis, and
Microsoft Word 6.0 for all documentation. AimRite must approve
the proposed development tools before any design work can begin.
LII will proceed with the specification process without such
approval; however, AimRite must provide either approval of the
proposed development tools or an alternative list of tools no
later than one week after project start. A failure by AimRite to
object to the development tools may affect the project cost or
schedule.
STATUS MEETINGS
24. LII will participate with AimRite in a weekly status meeting
regarding the COAST status, progress, and plans.
AIMRITE RESPONSIBILITIES
AimRite will be responsible for the following items for the COAST
project.
1. Specification input/approval. Detailed product
specifications will be prepared as a deliverable for this
project. Input and approval of the specification is the
responsibility of AimRite. No design work can start until the
design specifications have been approved by AimRite. Any changes
made to the specification after design effort has commenced will
be individually analyzed for cost and scheduled effects.
2. COAST mechanical, pneumatic, electromechanical devices. This
quotation assumes that AimRite will provide all mechanical,
pneumatic, and electromechanical devices required for the COAST
product. LII will be providing the electronic hardware, software
and components only.
3. Installation of the COAST system in the rolling chassis
(Suburban). LII can provide this effort; however, it has not been
included in this quotation.
4. Second pass of any COAST deliverables. This quotation covers
the first pass (revision A) deliverables only.
5. Additional development costs. LII has provided an estimate
only of the anticipated COAST development costs. All such effort
will be billed on a time and material basis. Should the finished
COAST product require additional time, effort or costs, the fees
and schedule will be adjusted accordingly.
6. Travel costs to AimRite facilities. It is not anticipated
that LII personnel will be required to travel outside of San
Diego for the COAST development; however, should AimRite
specifically request that LII personnel travel outside of San
Diego, all airfare, travel costs, lodging, and related expenses
are the responsibility of AimRite.
SCHEDULE
After receipt of purchase order and project scheduling (estimated
at from 0 to 2 weeks before the project can commence), the
following schedule will apply.
<TABLE>
<S> <C> <C>
TASK DURATION COMPLETE
WEEK #
1. Project Start. 0 0
2. COAST Detailed Design 6 6
Specifications.
3. COAST Hardware Design 6 12
4. COAST Software Design 12 18
5. COAST PCB CAD Layout, Fabrication, 4 16
and Assembly.
6. COAST Debug Test 4 20
7. COAST Integration and Test on 4 24
Rolling Chassis
Documentation Complete 1 25
</TABLE>
The above schedules reflect the time to generate deliverables.
The time required for AimRite to provide input, and to approve or
review deliverables is not included.
FEES
The development fees for the described COAST project follow.
These fees reflect an estimate only. LII will submit bills weekly
for the hourly effort expended in the prior week. The hourly rate
is $110.00 per hour for hardware and software design engineers
for effort completed in San Diego.
<TABLE>
<S> <C>
Hardware Design Engineer x 24 man-weeks x 40 $ 105,600.00
hours/week x $ 110.00 =
Software Design Engineer x 26 man-weeks x 40 $
hours/week x $ 110.00 = 114,400.00
PCB Layout, PCB Fabrication, Parts Procurement, PCB $
Assembly 25,800.00
( 3 PCBs: CCM, REM, Control Panel) =
Total = $ 245,800.00
</TABLE>
PAYMENT SCHEDULE
The payment schedule is not indicative of effort expended at any
point in this project. Premature cancellation of this agreement
will result in charges based upon actual incurred expenses or
hours expended to the date of cancellation.
TERMS
Payments terms are net 30 days after invoicing. Invoices unpaid
for over 30 days will accrue interest at a 1.5% per month rate.
If a dispute between any party to this agreement arises out of or
is related to the terms of this agreement, and such dispute
cannot be resolved within thirty (30) days of written notice to
the other party or parties, the parties agree to immediate, final
and binding arbitration under the auspices of the American
Arbitration Association (AAA) or any agreed upon Arbiter or
established arbitration body. The costs of the proceedings shall
be shared equally by the parties. Unless otherwise agreed upon,
the place of arbitration shall be in San Diego, California. The
decision of the arbiter shall be final and binding on all
parties. The prevailing party in arbitration or litigation of a
dispute shall be entitled to reimbursement of all actual costs of
litigation including reasonable attorney fees, court costs,
expert witness fees, discovery costs, interest at the maximum
legal rate upon the judgment, any post judgment costs of
enforcing the judgment, or such other costs as the Arbitrator or
court may award in addition to any compensatory or punitive
damages available to the prevailing.
Additional effort beyond the scope of this quotation or as is
specifically requested by AimRite will be billed at the specified
rates for the engineering resources employed. Additional and out
of pocket costs will be billed at actual costs plus 35%.
This quotation is valid for 30 days. If you accept this quote
please sign below and return to Logic Innovations, Inc.
Should you have any questions or if you require any clarification
to this quotation, please do not hesitate to call us. Thank you.
Sincerely,
/s/ Frank J. Creede
President
Logic Innovations, Inc.
Accepted: /s/ Kenneth P. Coleman For: AimRite Holdings
Corporation
Name 225 Stevens Avenue, Suite 104
Solana Beach, CA 92075
President
Title
March 30, 1998
Date
["Only Accepted with certain Amendment to Consulting Agreement"]
/s/KPC
AMENDMENT TO CONSULTING AGREEMENT
This Amendment to Consulting Agreement ("Agreement") is
entered into and made as of the date of last written herein
between AIMRITE HOLDINGS CORPORATION ("Client") and LOGIC
INNOVATIONS INC. ("Consultant") with reference to the following
facts:
WHEREAS Client and Consultant entered into a consulting
agreement entitled COAST DEVELOPMENT QUOTATION dated March 5,
1998 and;
WHEREAS Client is the holder of an international license
from the KENMAR Company Trust for the development, manufacturer,
sale and distribution of products derived from the a Computer
Optimized Adaptive Suspension Technology System (COAST) based on
certain proprietary information, suspension technology,
confidential information, trade secrets, documentation,
copyrights, trademarks, tradenames, documentation, patents and
patents pending and;
WHEREAS the development of certain portions of the COAST
system is the subject of the consulting agreement and;
WHEREAS Client and Consultant wish to further define their
rights and obligations under the consulting agreement;
IT IS THEREFORE AGREED TO AMEND THE CONSULTING AGREEMENT AS
FOLLOWS AS FOLLOWS:
1. Confidential Information
Consultant shall hold in trust for Client and shall not
disclose to any non-party to the consulting agreement, any
confidential information of client. Confidential Information is
information which relates to Client's research, development,
trade secrets and business affairs, but does not include
information which is generally known or easily ascertainable by
non-parties of ordinary skill in computer systems design and
programming and does not include any information already known by
Consultant prior to February 24, 1998, the date of the non-
disclosure agreement between Client and Consultant. Consultant
hereby acknowledges that since February 24, 1998 it has and
during the performance of the consulting agreement may receive
confidential client information and therefore Consultant hereby
confirms that all such information relating to the client's
business will be kept confidential by Consultant except to the
extent that such information is required to be divulged to the
Consultant's clerical or support staff or associates in order to
enable the Consultant to perform Consultant's obligations under
the Consulting Agreement. All employees of Consultant who are
involved in the design or production of any system called for
under the consulting agreement will sign a confidentiality
agreement with consultant which will ensure that employee and/or
consultant confidentiality for a period of three years after
leaving employment with Consultant. Client specifically
acknowledges that Consultant is working with other clients in the
research and development of products in numerous fields and that
Consultant is not bound to confidentiality of any particular
technique or design merely by engaging in technical development
of said technique or design for Client. Nothing in this Agreement
is intended to, in any way, restrict Consultant's ability to
conduct business freely with any other clients in any business or
technical area.
2. Staffing and Relationship
Consultant is and independent contractor and neither
Consultant nor Consultant's staff is or shall be deemed to be
employed by Client. Client is hereby contracting with Consultant
for the services in the consulting agreement and Consultant
reserves the right to determine the method, manner and means by
which the services will be performed. Consultant shall take
appropriate measures to insure that Consultant's staff is
competent and they do not breach Section 1 on this Agreement.
Each of the parties hereto agrees that, except with the other
party's written approval, solicit or offer employment to the
other party's staff or employees engaged in any efforts under the
consulting agreement. In the event that Consultant ceases
business operations during the period of this agreement, Client,
at its option, may offer employment to any of Consultant's
employees.
3. Use of Work Product
Except as those rights, if any, assigned to Client
under the consulting agreement, Consultant grants to Client fully
paid-up right and license to disclose, sublicense, use, modify,
copy, make and sell without restriction anything disclosed to
Client or developed under the consulting agreement specifically
for Client.
Consultant agrees to and does hereby assign to Client
all rights to all trade secrets and inventions, whether or not
patentable, which have been in the past, or are in the future,
conceived or reduced to practice solely or jointly by Consultant
or its employees or consultants, at any time, whether or not
during normal working hours, during the term of the consulting
agreement and are within the scope of services provided for in
the consulting agreement. Rights to inventions as used in this
paragraph include all worldwide rights to patent applications,
patents, including rights under all international conventions
relating to the intellectual property rights.
Consultant agrees to and does hereby assign to Client
all rights to all worldwide copyrights and other forms of
intellectual property rights to computer programs, data,
documentation and other works of authorship which have been in
the past, or are in the future, jointly or solely authored by
Consultant or its employees or consultants, at any time, whether
or not during normal working hours, during the term of the
consulting agreement and are within the scope of services
provided for in the consulting agreement and which relate to the
COAST features and specifications set forth in the consulting
agreement.
Consultant shall, however, retain an irrevocable non-
exclusive license to use in its business computer programs of
general application in designing systems, providing that such
license shall exclude any computer program which implements or is
designed using algorithm, computer program or design of a
suspension system with either is disclosed by Client to
Consultant or is created, designed or developed for a suspension
system by consultant for Client under the consulting agreement,
during the term of the consulting agreement and which are within
the scope of the services provided for in the consulting
agreement and which relate to the COAST system.
Consultant agrees that Consultant and Consultant's
employees and consultants will cooperate with client and will
sign all rightful papers requested by Client or its attorneys to
make application for, obtain and enforce in the name of Client,
or its assignees or licensees, all rights to patents, copyrights
and the intellectual property rights which are assigned or are to
be assigned to Client under his Section 3.
Consultant represents and warrants that each of
Consultant's employees and consultants who provides services
related to the consulting agreement or the COAST system has
signed or will sign a written agreement assigning to Consultant
all rights assigned or to be assigned to Client and agreeing to
cooperate with Client to perfect and secure all rights assigned
to Client all as provided in this Section 3 and that the name and
signature of each such employee and consultant appears below or
will be affixed confirming such agreements
4. Additional General Terms
a. Assignment
Neither party will assign any rights or
obligations under this agreement without the prior written
consent of the other party.
b. Notices
All notices required to be sent under this
agreement shall be sent by certified mail, return receipt
requested, to the addresses below or to any other address to
which the parties may, from time to time, designate:
CLIENT: AimRite Holdings Corporation, 225 Stevens Ave #104,
Solana Beach, CA 92075
CONSULTANT: Logic Innovations Inc., 6205 Lusk Blvd. San Diego
92121-2731
c. Integration and Amendment
This written agreement sets forth the entire
understanding of the parties with respect to the subject matter
of this agreement and supersedes all prior agreements,
understandings and negotiations with respect to the subject
matter hereof. Neither party to this agreement (nor its officers,
agents, employees, representatives or attorneys of or for any
party) has made any statement to any other party regarding any
fact relied on in this agreement, and each party does not rely on
any statement, representation or promise of any other party (or
any officer, agent, employees, representative, or attorney for
the other party) in executing this agreement except as expressly
stated in this agreement. Any amendments to this agreement must
be in writing and signed by both parties.
d. Investigation
Each party to this agreement has made such
investigation fo the facts pertaining to this agreement and all
the matters pertaining thereto as it deems necessary.
e. Review and Ratification
Each party or responsible officer thereof has read
this agreement, including each and every provision thereof, and
understands the contents thereof. Each party represents that the
board of directors of each party has consented either in writing
or at a meeting duly held, to the transactions contemplated
hereby.
f. Construction
Each party has cooperated in the drafting and
preparation of this agreement. Hence, in any construction to be
made of this agreement, the same shall not be construed against
any party.
g. Terms
Each term of this agreement is contractual and not
merely a recital.
h. Legal Advice
Each party has received independent legal advice
from its respective attorneys with regard to the making of this
agreement and each and every term thereof.
i. Consideration
Both Parties acknowledge that they have received
equal, valuable and legally sufficient consideration in return
for the obligations and befits given under this agreement.
j. Governing Law
This agreement shall be deemed to have been
executed and delivered in the State of California and shall be
governed by and interpreted with the laws of the State of
California except those laws relating to choice of law. The
parties agree that any dispute regarding the interpretation of
validity of this agreement will be subject to the exclusive
jurisdiction of the California State Courts for San Diego County,
California and to the personal and exclusive jurisdiction of that
Court. The parties agree that the prevailing side in any such
dispute shall be entitled to reasonable attorney's fees in
enforcing this agreement.
k. Waiver
Failure of either party to enforce, at any time or
for any period of time any of the provisions of this agreement
shall not be construed as a waiver of such provisions and shall
in no way effect a party's right to later enforce such
provisions.
l. Severability
If any part of this agreement is determined by any
court or tribunal of competent jurisdiction to be wholly or
partially unenforceable for any reason, such unenforceability
shall not affect any other part of this agreement.
m. Good Faith and Fair Dealing
All implied in law covenants of good faith and
fair dealing are hereby incorporated into this agreement by this
reference.
n. Future Benefits
This agreement is binding upon and shall inure to
the benefit of the parties, their heirs and successors in
interest whether individual, corporate or otherwise.
o. Time
Time is of the essence in this agreement.
AGREED:
AIMRITE HOLDINGS CORPORATION
BY:
ITS:
LOGIC INNOVATIONS INC.
BY:
ITS:
Consultants and employees
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
AimRite Holdings Corporation
By: /s/ Mary Kay Koldeway-Coleman
Mary Kay Koldeway-Coleman,
Interim President/Secretary
Date March 10, 2000
